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Roger, Lawyer
Category: Real Estate Law
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Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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We are a tenant in a commercial building going to Trustee Sale

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We are a tenant in a commercial building going to Trustee Sale in Arizona 12-28-11, but we don't know what our rights are. Can the new owner or the bank lock us out of our business?

Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney here to assist you.


Unfortunately, commercial tenants have very limited rights when a landlord files bankruptcy unless the lease contains a non-disturbance agreement between the tenant, the landlord and the landlord's lender that says in the event of default by the landlord (borrower), the lease will not be disturbed. Assuming there is no such provision in your lease, once the property is foreclosed, the lender can proceed with evicting you from the property.


However, most lenders are willing to allow the lease to continue because it generates income and also keeps the commercial property open, occupied, active, etc., which makes it easier to sell the property to a new investor/buyer.


I would recommend that you contact the lender before the foreclosure and ask what its intentions are, if you can agree to stay and pay rent, etc. This will give you the peace of mind to move forward as you won't have to guess what is going to happen post-foreclosure.

Customer: replied 5 years ago.
There is no such clause in our lease, so it is conceivable that the Trustee sale could trigger an eviction. If so, what are the time elements involved? How long does it take?

Yes, if you don't have such an agreement, the lender/new owner can institute an eviction action as soon as it purchases the property at foreclosure. If this occurs, the eviction will take 30-60 days to get to court, and the judge would generally give you 10-30 days after the eviction hearing to vacate.


However, if you want to stay, my experience is that the lender or purchaser would likely want you to stay and continue paying rent.

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