Residential Closing Best Practices Requirements by Amanda Barritt
2016 saw the CFPB regulations and Best Practices requirements move into high gear with respect to financed residential
2016 saw the CFPB regulations and Best Practices requirements move into high gear with respect to financed residential…
On August 24, 2016, the Fourth District Court of Appeal issued an opinion in Ober v. Town of Lauderdale-by-the-Sea, No. 4D14-4597, 2016 WL 4468134 (Fla. 4th DCA August 24, 2016) that is likely to have broad implications on Florida’s foreclosure process and negatively impact investor interests in distressed real estate. Moving forward, from a land use perspective, the case should also serve as a cautionary tale and reminder about the importance of a prospective buyer’s due diligence.
The genesis of the case began on November 26, 2007, when a lis pendens was recorded on a property as part of a foreclosure proceeding against a homeowner. Thereafter, a bank obtained a final judgment of foreclosure on the property in September of 2008. Several years following the final judgment, a real estate investor, Ober, purchased the property on September 27, 2012 at a judicial sale.
The crux of the case revolved around seven (7) separate code enforcement liens that had been recorded on the property by the Town between the dates of July 13, 2009 and October 27, 2011, all stemming from violations that occurred after the final judgment was entered. Finally, in 2013 the Town began to impose three more liens on the property in relation to the earlier violations.
In an attempt to strike the liens against his property, Ober filed an action to quiet title in civil court. In response, the Town filed counterclaims to foreclose the ten (10) liens, which were later approved by the trial court in its final judgment that was entered against Ober.
On May 20, 2009, President Obama signed into law the Protecting Tenants at Foreclosure Act of 2009 (the “Act”). The Act was created during the height of the foreclosure crisis as a temporary measure to protect tenants who entered into a lease without realizing a property was in foreclosure. The Act provided that lenders and third-party purchasers who took title to a property at a foreclosure sale must provide a tenant with a minimum of 90 days’ notice, prior to seeking a writ of possession and evicting the tenant.
Sunset Provision of the Act
The Act was scheduled to expire on December 31, 2012, but the Dodd-Frank Wall Street Reform and Consumer Protection Act extended the sunset provision to December 31, 2014. There was much speculation within the legal community regarding whether the Act would be extended again. On November 21, 2013, the Senate introduced Bill 1761, titled “Permanently Protecting Tenants at Foreclosure Act of 2013,” which sought to indefinitely extend the protections afforded under the original Act, as well as provide tenants with a private right of action against lenders and third-party purchasers who failed to comply with the Act. However, Senate Bill 1761 never progressed forward, and the Act expired on December 31, 2014.
What Happens After the Sunset?