The Bank of New York Mellon v. De Meo – 5/3/2011
Arizona Court of Appeals Division One Holds that Federal Law Requires New Owners of Foreclosed Real Property to Give a 90-Day Notice that Tenants Must Vacate, Not Merely a 90-Day Delay Before Filing a Forcible Entry and Detainer Action.
Patricia De Meo was a month-to-month tenant in a property acquired by Bank of New York Mellon in a trustee sale. The Bank sent De Meo a notice to vacate the property within five days pursuant to Arizona statute, A.R.S. §§ 12-1173 and 12-1173.01, on August 19, 2009. The Bank filed a forcible entry and detainer complaint on November 24, 2009.
De Meo defended the complaint by arguing that the 5-day notice was inadequate under section 702 of the Protecting Tenants at Foreclosure Act of 2009 (“PTFA”), codified at 12 U.S.C. § 5220. The PTFA requires that tenants in a foreclosed property must be given notice to vacate the property “at least 90 days before the effective date of such notice.” De Meo argued that the 5-day notice did not comply with this requirement even though she had received notice 97 days before the Bank filed the FED complaint. The trial court recognized that the PTFA requirements were unclear but granted immediate possession of the property to the Bank. De Meo appealed.
The Court of Appeals reversed. The Court first disposed of the Bank’s argument that the appeal was moot because De Meo no longer resided at the property. The Court held that this case was both “an issue of great public importance” and “an issue capable of repetition yet evading review,” two exceptions to the mootness rule.
The Court went on to reject the Bank’s argument that the PTFA requires only that tenants be notified 90 days before the successor owner takes action to force the tenant to vacate. Such a construction conflicts with both the express language of the PTFA and the legislative intent, which is to give tenants sufficient notice and time to relocate to a new home. The notice provided to De Meo could be taken to mean that she had only five days to vacate the property, which violates PTFA because she had no way of knowing that the Bank would wait a full 90 days before taking legal action.
Judge Weisberg authored the opinion; Judges Kessler and Johnsen concurred.