Dr. Leevil, LLC v. Westlake Health Care Center

A purchaser at a foreclosure sale need not perfect its title in the property by recording a trustee’s deed upon sale before serving the occupant(s) with a notice to quit, so long as title is perfected before the ensuing unlawful detainer action is filed and served.  Disagreeing with U.S. Financial, L.P. v. McLitus (2016) 6 Cal.App.Supp. 1, this decision holds that a purchaser at a foreclosure sale need not perfect its title in the property by recording a trustee’s deed upon sale before serving the occupant(s) with a notice to quit.  So long as title is perfected before the unlawful detainer action is filed and served, the plaintiff is entitled to an unlawful detainer judgment under CCP 1161a(b)(3).  The decision also holds that a lease entered into before the foreclosed deed of trust is extinguished by the foreclosure under the lease’s automatic subrogation clause even though the lease also contained a permissible subrogation clause with a non-disturbance provision.  The latter would have preserved the lease as against the foreclosure but for the existence of the automatic subrogation clause.

California Court of Appeal, Second District, Division 6 (Tangeman, J.); March 7, 2017; 2017 WL 895808

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