Reversing the lower court's grant of summary judgment, the Illinois Appellate Court, First District, recently ruled that the lower court lacked jurisdiction over eviction proceedings under the Illinois Forcible Entry and Detainer Act where the tenant of foreclosed property had a valid written lease still in force at the time of the filing of the eviction action.
In so ruling, the Court did not address the eviction plaintiff's argument that, under the federal Protecting Tenants at Foreclosure Act of 2009, it was allowed to evict the tenant due to the tenant's failure to respond with proof of a bona fide lease within 90 days of the eviction plaintiff's notice.
A copy of the opinion is available at: http://www.illinoiscourts.gov/Opinions/AppellateCourt/2013/1stDistrict/1121361.pdf
Following a foreclosure action involving residential property, plaintiff loan servicer ("Servicer") became the owner of the subject property and sent a notice to vacate and demand for possession ("Notice") under the federal Protecting Tenants at Foreclosure Act, 12 U.S.C. § 5220 Note ("PTFA") to defendant tenant ("Tenant"), who was not a party to the foreclosure proceedings. The Notice stated that Tenant would have to surrender possession of the property to Servicer unless Tenant provided a copy of her written lease to Servicer's attorney within 90 days of the notice, as required by the PTFA. Tenant supposedly provided copies of her written lease to both Servicer's attorney and its real estate agent.
More than 90 days after the Notice, but prior to the expiration of Tenant's lease, Servicer brought a forcible entry and detainer action ("eviction action") against Tenant under the Illinois Forcible Entry and Detainer Act in order to gain possession of the property. Servicer subsequently moved for summary judgment, arguing that no genuine issue of material fact existed. In response, Tenant moved for summary judgment and dismissal of the action, arguing that she was protected under the PTFA and that Servicer lacked authority to file the eviction action prior to the expiration of her lease.
The lower court granted summary judgment in favor of Servicer, noting in part that Tenant had supposedly failed to provide proof of the lease within the 90-day period, and that the PTFA did not specify whether a mortgagee must wait until after the expiration of the lease to begin eviction proceedings. Tenant filed a motion to reconsider, which the lower court denied despite, among other things, Tenant's inclusion of a copy of the lease with her filings. Tenant appealed.
The Appellate Court reversed, ruling that the lower court lacked jurisdiction over the eviction action in light of the lease giving Tenant the right to possess the premises at the time the eviction action was filed.
As you may recall, the Illinois Forcible Entry and Detainer Act allows a party to file an eviction action against a lessee "[w]hen any lessee . . . holds possession without right after the termination of the lease or tenancy by its own limitation, condition or terms, or by notice to quit or otherwise." 735 ILCS 5/9-102(a)(4). See also Protecting Tenants at Foreclosure Act of 2009, codified at 12 U.S.C. § 5220 Note (requiring surrender of possession unless occupant provides evidence of preexisting tenancy within 90 days of notice).
Pointing out that a final foreclosure order does not automatically terminate a lease that is subordinate to the mortgage, the Appellate Court stressed that tenants of foreclosed properties may be removed only through properly filed eviction proceedings or unless they were made parties to the foreclosure proceedings. See Agribank FCB v. Rodel Farms, Inc., 251 Ill. App. 3d 1050, 1055 (1993).
Thus, because the tenant was not made a party to the foreclosure proceeding, and because the tenant's lease was still in force when Servicer filed its eviction action, the Appellate Court ruled that Servicer failed to comply with the Illinois Forcible Entry and Detainer Act's strict jurisdictional requirements by filing its eviction complaint prematurely.
Accordingly, the Appellate Court reversed, concluding that there was no jurisdiction over the eviction action due to Servicer's filing of its eviction action prior to the expiration of Tenant's lease.
Ralph T. Wutscher
McGinnis Wutscher Beiramee LLP
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Chicago, Illinois 60602
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