Appeals Court Victory for Our Investor Client!
We are proud to announce that we secured an appellate victory for our client, Loft Concepts, Inc. (“LCI”), in an opinion released on May 25, 2016 by the Fourth Court of Appeals located in San Antonio, Texas. The case involved a post-foreclosure eviction that worked its way through three (3) levels of courts — all of whom sided with us and our client.
LCI — a real estate investment firm that holds a portfolio of rental properties — purchased a San Antonio single family residence from a bank through an online auction. The bank had previously foreclosed on the property. The bank recovered title to the home through a Trustee’s Sale following the former owners’ default in making their mortgage payments. Despite the bank’s foreclosure, the previous owners refused to vacate.
LCI purchased the property with the former owners in place, but immediately demanded that they vacate. When they refused, LCI was forced to file an eviction suit against the former owners in Justice Court. LCI won the eviction suit, and was awarded exclusive possession of the property. However, the owners appealed the case to the Bexar County Court at Law.
We handled the trial of the eviction appeal, and defeated the former owners’ claims that LCI’s purchase was invalid due to alleged irregularities in the bank’s foreclosure of the property. Following trial of the eviction appeal, the County Court awarded LCI possession of the property, together with costs and attorneys’ fees. Undaunted by their two losses in trial courts, the former owners appealed again — this time to the Fourth Court of Appeals. Through their lawyer, the former owners demanded payment from LCI to vacate and abandon their appeals, but those demands were refused in favor of court determination.
We submitted an extensive brief on LCI’s behalf, and argued that procedural defects in foreclosure proceedings (assuming they exist at all) have no bearing on the exclusive right of possession afforded to third-party purchasers at or following foreclosure. Our arguments were grounded in the “tenant-at-sufferance” clauses contained in most Deeds of Trust executed by borrowers under mortgage loans. These clauses — which borrowers agree to when they borrow money to purchase real estate — typically provide that, following foreclosure sales, borrowers/former owners are tenants-at-sufferance, and no longer maintain any legal right to occupy the property.
The Fourth Court agreed with our analysis, in an opinion whose implications will assist all of our clients who purchase properties at (or following) foreclosure. If you are in need of a serious attorney experienced with handling post-foreclosure eviction cases, we can help.