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News & Press: Court Cases

Foreclosure

Tuesday, March 21, 2017  
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Dr. Leevil, LLC v. Westlake Health Care Center

  1. Where a lease that had recorded before a deed of trust contained both an automatic subordination clause and permissible subordination clause with a nondisturbance provision, the court held that the ambiguity is to be interpreted against the drafter of the lease, which in this case was the tenant under the lease. Accordingly, the foreclosure of the deed of trust wiped out the lease where the foreclosing lender never invoked the permissible subordination clause.

  2. The court also held that a Notice to Quit by the purchaser at the trustee's sale could be served before the trustee's deed was recorded because C.C.P. Section 1161a(b)(3) only requires that title be perfected before a tenant "may be removed" from the property, and a tenant is not "removed" by the service of a Notice to Quit. In this case the trustee's deed was recorded before the unlawful detainer action was filed.

Cal.App 2nd Dist. (B266931) 3/7/17

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