McAllister Garfield’s commercial foreclosure attorneys offer high-quality representation in and out of court. Established in 2009, the firm has assisted landlords and lenders seeking payment, enforcing judgments, and foreclosing on real and personal property.
Our commercial eviction lawyers have represented all types of creditors such as banks and nontraditional banking clients including hedge funds, private equity, and private lenders, vendors, debt purchasers, and landlords.
The firm handles all manner of collection and creditors’ rights matters such as:
- bankruptcy (e.g., relief from stay, adequate protection, cash collateral, appointment of a trustee or examiner, reclamation, assumption/rejection of executory contracts, and involuntary bankruptcy cases)
- charging orders
- cognovit judgments
- court-ordered asset sales
- enforcement of mechanic’s liens
- fraudulent transfers
- including receiverships
- post-judgment enforcement (writs of garnishment and execution)
- prejudgment attachment
- private and public sales of personal property
- public trustee and judicial foreclosures
We also defend creditors in preference, fraudulent transfer, lender liability, and other matters.
What Happens During an Eviction?
Foreclosure is the process in which a bank or creditor repossesses property from a borrower who failed to settle mortgage or lease payments.
Judicial vs. Nonjudicial Commercial Foreclosures
There are two main types of commercial foreclosures: judicial and non-judicial.
Judicial foreclosures are processed through the court system. It begins when a lender sues a borrower seeking a judgment of foreclosure and order for sale.
On the other hand, a nonjudicial foreclosure, or power of sale foreclosure, is an out-of-court process. In this scenario, the lender may proceed nonjudicially as long as the loan documents carry a power of sale clause and state foreclosure law allows it.
The process for both judicial and nonjudicial commercial foreclosures starts when the borrower defaults on the mortgage. A default occurs when the borrower falls behind on his mortgage payments or fails to comply with one more contractual terms
When a borrower defaults, the lender may invoke its rights to call due the pending balance on the loan. The lender must send a notice commonly called a breach letter, indicating the reasons for default. In the letter, the borrower is informed of its remaining balances, penalties, and the required fee to reinstate the loan. Borrowers usually have 30 days to settle missed payments and rehabilitate the loan, but it depends on the conditions of the mortgage. If the borrower misses the deadline, the lender may proceed with foreclosure.
Whether you’re a landlord or tenant facing foreclosure, consulting with an attorney can help you understand your rights and obligations under the law.
Possible Defenses for Lenders
Typically, the most cost-effective commercial foreclosure defenses for a creditor include:
- Negotiation of a pay down of debt
- Release of the creditor’s collateral
- Restructure of indebtedness
If negotiations fail to provide acceptable results, we pursue our clients’ judicial and statutory rights by initiating proceedings in state and federal courts.
Our knowledgeable attorneys have successfully defended both small and large-scale commercial foreclosures in Colorado, California, Michigan, and Oregon. We understand the intricacies of the law, leveraging our technical skills to protect your interests. Our team will guide you every step of the way to ensure that you are able to collect what is owed to you.
Tenants’ Rights After Foreclosure
If you are a commercial tenant with a landlord in foreclosure, know that your rights are dictated by the terms of the lease and the date on which the lease was signed.
Most commercial leases consist of a subordination, non-disturbance, and attornment agreement (SNDA). Under an SNDA:
- The tenant agrees to subordinate its interest in the lease to any lender making a loan secured by the commercial property;
- The tenant agrees to recognize the new owner of the commercial property as its landlord;
- and the new owner of the said property agrees not to disrupt the tenant’s possession of the property as long as the tenant pays rent and adheres to the terms of the lease.
An SNDA assures tenants that their rights to their premises will be preserved in the event of a foreclosure. SNDA provisions indicate the obligations of tenants, lenders, and property owners in case a default occurs. They also state the distribution of insurance proceeds should instances of casualty or condemnation occur.
This is why it’s imperative for a tenant to carefully assess the entire lease prior to signing. If a tenant unknowingly accepts unfriendly SNDA terms, this may end up forfeiting his essential rights if a property foreclosure takes place.
A thorough review of SNDA terms is even more crucial should a new lender take over and implement aggressive tactics. Lenders who become landlords will do everything they can to maintain as much capital as possible. This can involve increasing rent, disregarding rental abatement periods, nullifying tenant improvement allowances and in some cases, eviction.
As a tenant, there are several ways you can protect your interests and continue your daily activities even in the face of a foreclosure.
If you wish to make an investment in the premises or retain the property due to its strategic location, it’s best to develop a non-disturbance agreement once a lease is executed. This type of agreement establishes a direct contractual relationship between tenant and lender. It ensures that the lender will not disrupt the tenant’s occupation of the leased premises.
Most leases feature a “covenant of quiet enjoyment.” Cases where eviction occurred due to the landlord’s failure to settle mortgage payments can be brought to court. By pursuing litigation, tenants can recover economic losses such as:
- Apartment searching costs
- Application fees
- Moving expenses
- Other reasonable costs associated with relocating
- The difference between your new and old rent
By consulting with an attorney, you can put yourself in a better position to regain losses. Our team can inform you of your rights as a tenant and offer the best solutions for your situation.
Talk to a Commercial Foreclosure Lawyer Today
At McAllister Garfield, we relentlessly pursue rights and remedies through efficient litigation and post-judgment actions. Our lawyers possess extensive negotiation skills and legal knowledge needed to secure agreements that are fair and reasonable.
As part of our commitment to achieving your goals, we deliver custom solutions with the focused experience of a boutique firm. Our team understands the complexities of commercial foreclosure cases which is why we’re dedicated to delivering a swift and seamless experience no matter the situation.