Buying property through foreclosure can be a lucrative endeavor, but obtaining possession can be challenging when an occupant refuses to leave.  The only lawful way to resolve this problem is by successfully prosecuting an eviction lawsuit against the occupant and then obtaining a writ of restitution directing the sheriff to forcibly remove the occupant from the property.  In Arizona, the procedure involves different rules, depending on whether the existing occupant is a former owner or the former owner’s tenant.  Here is a synopsis of Arizona law on this subject. 

Notice Required for Former Owner 

If the previous owner is still in possession of the property after foreclosure, he or she may be removed by the filing of a forcible detainer action under A.R.S. 12-1173.01.  After foreclosure the former owner becomes an unauthorized occupant subject to eviction under this statute. 

The procedure begins by serving the former owner with a 5 Day Notice to Vacate.  If the former owner remains at the premises after the five-day period expires, the new owner must file and prosecute an eviction lawsuit against the former owner and obtain a Writ of Restitution from the court.  The Writ authorizes the sheriff to forcibly remove the former owner from the premises (see below). 

Notice Required for Former Tenant 

Unlike homeowners who have some indication that a foreclosure is coming, renters are not typically aware that their landlords are behind on mortgage payments and are often caught off guard by a foreclosure. For this reason, federal law has been enacted protecting these tenants.  Specifically, the Protecting Tenants at Foreclosure Act” (PTFA) was signed into law in 2009 and became permanent in May 2018. The PTFA is the only federal protection for renters living in foreclosed properties.  It enables renters of foreclosed properties to remain in their homes for at least 90 days or for the term of their lease, whichever is longer.  

If the property is purchased by someone who will occupy the property, the buyer can terminate the lease with 90 days’ notice even if the tenant’s lease extends beyond 90 days after foreclosure.  Additionally, tenants with Section 8 Voucher assistance have protections allowing them to retain their Section 8 lease and requiring the successor in interest to assume the housing assistance payment contract associated with their lease. 

The Eviction Process 

Once the applicable notice expires, the usual process for forcible detainer action applies.  The new owner must obtain a court judgment for possession of the property. The new owner can also ask for a money judgment against the former owner. Five days after the judgment is entered the plaintiff can apply for a writ of restitution.  The writ directs the sheriff to remove the occupant(s) from the property. Once they are removed the new property owner can take physical possession of the property. 

The locks can be changed upon execution of the writ. The former occupants are not allowed to return to the property for any reason after execution of the writ. If they do, they will be considered criminal trespassers and can be arrested. A.R.S. § 12-1178(D). 

It is also important to check the local rules and procedures for your county governing enforcement of the writ of restitution.  For example, in Maricopa County, a property owner is required to move the former owner’s belongings from the property before the Maricopa County Sheriff’s Office will execute the writ of restitution. The new property owner accomplishes this by hiring licensed and bonded movers.  The property owner must also pay for one month’s storage at an insured storage facility.   The occupants are responsible for retrieving their property within 30 days.  

Cash for Keys Transaction 

The new owner is free to negotiate a “cash-for-keys” agreement with the occupants. In this scenario the occupants are paid an agreed-upon sum of money for vacating the property on a specified date.   

Please contact Lynx Legal at 888-441-2355 or [email protected] with any questions regarding the above or if you need to start a case. Our experienced professionals are standing by to assist in any way we can.