28 Misc. 3d 328 903 N.Y.S.2d 667

[903 NYS2d 667]

Bank of America, N.A., Successor by Merger to BA Mortgage, LLC, Successor by Merger to Nationbanc Mortgage Corporation, Petitioner, v Jacob Owens et al., Respondents.

City Court of Rochester,

May 5, 2010

*329APPEARANCES OF COUNSEL

Steven J. Baum, P.C. {John A. Belluscio of counsel), for petitioner.

OPINION OF THE COURT

Ellen M. Yacknin, J.

Introduction

Petitioner in this summary eviction proceeding is a national bank that assumed ownership of rental property following a foreclosure action. As the successor property owner, the bank seeks an order of eviction against the tenants who reside in the property. This case raises the novel issue of whether the successor property owner bank, which is statutorily required to provide bona fide tenants at least 90 days’ advance notice prior to seeking their eviction, can nonetheless evict the tenants before 90 days have elapsed if the tenants do not provide information demanded by the bank before then.

Factual and Procedural Background

Petitioner Bank of America, N.A., acquired ownership of the rental property at 84 West High Terrace in Rochester, New York on January 4, 2010 following a foreclosure action against the defaulting property owner. Respondents Jacob Owens, Patricia Owens, Salina Owens, LaSean Roberts, and John Doe allegedly reside at the property, apparently having rented from the former property owner.

On January 9, 2010 petitioner purportedly sent a “90 Day Notice to Vacate,” dated January 6, 2010, to respondents.1 This notice advised respondents to vacate the property within 90 days, and that if they failed to do so, eviction proceedings would be commenced against them. In addition, the notice directed each respondent to fill out and return an attached question*330naire asking for information about the nature of his or her tenancy. The notice also stated: “If the undersigned’s attorneys do not receive the requested information within five (5) days, we will assume that you are not a bona fide tenant and we will proceed with an eviction action without delay, in accordance with the laws of the State of New York.” (Jan. 6, 2010 notice, at 2.)

Respondents did not return the requested questionnaires. For that reason, on January 28, 2010, petitioner’s attorney served a 10-day “Notice to Quit Premises” on respondents.2 On February 11, 2010 petitioner filed a notice of petition for judgment and “Warrant of Eviction” pursuant to Real Property Actions and Proceedings Law § 713 (5). The petition was served on all respondents by substitute service on February 15, 2010.

Petitioner’s attorney appeared in court on February 24, 2010, the action’s return date. No respondent appeared. On that date, the court expressed its concern about whether respondents had received sufficient 90 days’ advance notice under the federal Protecting Tenants at Foreclosure Act of 2009 (PTFA) (Pub L 111-22, div A, tit VII, §§ 701-704, 123 US Stat 1660 [May 20, 2009]).3 For that reason, the case was adjourned to February 26, 2010 for further proceedings.

On that date, petitioner’s attorney acknowledged that the PTFA applied to respondents in this action,4 and that petitioner had brought an eviction proceeding against respondents before *33190 days had elapsed following the initial notice to vacate. Petitioner’s attorney maintained, however, that because respondents failed to return the completed questionnaires that were demanded in the first notice, petitioner was entitled to commence an eviction action against respondents before the statutory 90 days’ notice period had expired.

Legal Analysis

As petitioner acknowledges, the Protecting Tenants at Foreclosure Act applies to the parties in this action.5 The PTFA provides that all “bona fide tenants” residing in foreclosed residential real property are entitled to at least 90 days’ advance notice of their obligation to vacate the premises before they can be evicted. (See PTFA § 702 [a].)6 Under the Act, a person is a “bona fide” tenant if: (1) neither the mortgagor nor his or her family member is the tenant; and (2) the tenancy was the result of an arm’s length transaction; and (3) the monthly rent (unless it is subsidized rent) is not substantially less than the property’s fair market rent. (See PTFA § 702 [b].)

Petitioner contends that the questionnaire it sent to respondents was intended to help petitioner determine whether respondents were bona fide tenants under the PTFA. The solicitation of written information from the tenants of a foreclosed property to help the successor property owner comply with the PTFA is not unreasonable. For example, if petitioner learned from a completed questionnaire that a tenant had nine months remaining on a 12-month lease, petitioner could not evict the tenant until the lease term expired. (See PTFA § 702 [a] [2] [A].)

*332The solicitation of information, however, was not the sole function of petitioner’s questionnaire. Instead, petitioner used respondents’ failure to respond to the questionnaire as a device to bring an eviction action against respondents well before the expiration of the PTFA’s 90 days’ notice period. Petitioner accomplished this goal by directing respondents to respond to its questionnaire within five days of receiving its notice to vacate. Petitioner argues that when respondents failed to respond to the questionnaire, it was entitled to “assume” that respondents were not bona fide tenants under the PTFA. Therefore, according to petitioner, it was entitled to commence eviction proceedings against respondents 33 days after their receipt of the notice to vacate.

Petitioner commenced eviction proceedings against respondents prior to expiration of the PTFA’s statutory 90 days’ notice period solely because they failed to respond to petitioner’s questionnaire. Doing so violates both the intent and plain language of the PTFA for several reasons.

First, in determining whether the PTFA entitles a successor owner to impose its own prerequisites on tenants before providing them with 90 days’ advance notice prior to their eviction, it is essential to determine congressional intent in adopting the PTFA. In this regard, the New York Court of Appeals has emphasized:

“In matters of statutory and regulatory interpretation, we have repeatedly recognized that legislative intent is the great and controlling principle, and the proper judicial function is to discern and apply the will of the [enactors]. Generally, inquiry must be made of the spirit and purpose of the legislation, which requires examination of the statutory context of the provisions as well as its legislative history.’ ” (Matter of ATM One v Landaverde, 2 NY3d 472, 476-477 [2004] [citations omitted].)7

Moreover, a statute must be construed to avoid objectionable results. (See ATM One v Landaverde, 2 NY3d at 477.)

*333Congress’ unequivocal intent in enacting the PTFA was to protect tenants in foreclosed rental properties against abrupt evictions; it was not intended to help the properties’ successor owners obtain swift possession. As explained by the United States Department of Housing and Urban Development, prior to the PTFA’s adoption, “it [had] bec[o]me increasingly evident that . . . tenants residing in residential properties were also victims of the foreclosure crisis. . . . The objective of these new tenant protections is to ensure that tenants receive appropriate notice of foreclosure and are not abruptly displaced.” (74 Fed Reg 30106.) Similarly, following the PTFA’s passage, Senator Christopher Dodd, one of the legislation’s drafters, declared:

“[F]or too long, tenants have been the innocent victims of the foreclosure crisis. Countless tenants across the country have been forced to leave their homes simply because their landlords were unable to pay their mortgages ....
“This new law protects tenants facing evictions due to foreclosure by ensuring that they can remain in their homes for the length of the lease or, at the least, receive sufficient notice and time to relocate their families and lives to a new home.” (155 Cong Rec S8978-01 [Aug. 6, 2009].)

To interpret the PTFA to allow successor property owners to require bona fide tenants to forfeit their right to the Act’s advance notice protections unless the tenants respond to the property owners’ questionnaires would lead to the objectionable result that bona fide tenants could be evicted without receiving the benefit of the PTFA’s 90 days’ advance notice safeguards. Therefore, to effectuate the PTFA’s legislative intent of preventing sudden and disruptive evictions of tenants residing in foreclosed properties, the Act’s advance notice provisions cannot be construed to permit successor property owners to take measures to circumvent those provisions.

Second, the PTFA’s plain language imposes an advance notice requirement only on successor property owners. The PTFA neither imposes any preconditions on tenants nor authorizes successor owners to impose any preconditions on tenants as a prerequisite to tenants’ receipt of the PTFA’s 90 days’ advance notice.

Petitioner’s requirement that bona fide tenants fill out and submit questionnaires as a prerequisite to the tenants’ receipt of 90 days’ advance notice to vacate a foreclosed rental property *334imposes an obligation on bona fide tenants that is neither required nor authorized by the PTFA. Stated differently, by requiring bona fide tenants to respond to its questionnaire within five days of its demand to do so or face eviction proceedings prior to the expiration of 90 days, petitioner has imposed its own notice requirement on bona fide tenants that is neither authorized nor contemplated by the PTFA as a prerequisite to tenants’ receipt of the Act’s safeguards.

Third, petitioner’s five-day demand for information improperly shifts the burden of demonstrating a tenant’s entitlement to 90 days’ advance notice from a successor property owner to a bona fide tenant. Petitioner correctly observes that under the PTFA, only bona fide tenants are entitled to at least 90 days’ advance notice to vacate. But the PTFA does not require bona fide tenants to prove their status before they are entitled to receive 90 days’ advance notice to vacate from a successor property owner. Instead, the successor owner carries the burden of demonstrating that a resident of a foreclosed property is not a bona fide tenant in order to permit the successor owner to short-circuit the PTFA’s 90 days’ notice requirement. (See First Natl. Bank of Chicago v Silver, 73 AD3d 162, 165-170 [2d Dept 2010]; W54-7 LLC v Schick, 14 Misc 3d 49, 50 [App Term, 1st Dept 2006].)

To place the initial burden of producing evidence of bona fide tenancy status on the tenant would be to turn the PTFA’s goal of protecting tenants in foreclosed properties on its head. Such a requirement would impose a burden on tenants that is neither expressly nor tacitly authorized by the legislation. Conversely, to place the burden on a successor owner to demonstrate that a property resident is not a bona fide tenant is not unduly burdensome. The definition of a bona fide tenant is exceedingly broad. Other than the mortgagor’s family members, of whom the successor owner should be aware, the vast majority of residents in foreclosed properties qualify as bona fide tenants. Thus, it is reasonable to presume that a resident of a foreclosed property is a bona fide tenant unless the successor owner demonstrates otherwise.8

*335As a result, if a successor property owner has credible evidence that a resident of foreclosed property is not a bona fide tenant, the successor owner is free to bring an eviction proceeding against the resident without providing the 90 days’ advance notice mandated by the PTFA. The successor owner may have credible evidence, for instance, that the resident is the mortgag- or’s spouse or parent, or that the resident rented the property from the prior owner for $1 a month. Evidence of either situation would obviate a successor owner’s obligation, to provide a resident with 90 days’ advance notice prior to the commencement of eviction proceedings.

On the other hand, a tenant’s failure to respond to a successor owner’s request for information about the tenant’s status is not credible evidence that a resident is not a bona fide tenant. To the contrary, a tenant’s failure to respond to a demand for information about his or her status demonstrates merely that the tenant failed to respond. Accordingly, absent independent credible evidence that he or she is not a bona fide tenant, a respondent’s failure to reply to petitioner’s five-day demand for information does not entitle petitioner to evade its 90 days’ notice obligations under the PTFA.

Conclusion

For the reasons discussed above, petitioner’s failure to give respondents at least 90 days’ advance notice before commencing eviction proceedings against them violates respondents’ rights under the federal Protecting Tenants at Foreclosure Act of 2009. Accordingly, petitioner’s petition for a warrant of eviction against respondents is dismissed.9

Bank of America, N.A. v. Owens
28 Misc. 3d 328 903 N.Y.S.2d 667

Case Details

Name
Bank of America, N.A. v. Owens
Decision Date
May 5, 2010
Citations

28 Misc. 3d 328

903 N.Y.S.2d 667

Jurisdiction
New York

References

Referencing

Nothing yet... Still searching!

Referenced By

Nothing yet... Still searching!