Leases / Foreclosure
Monday, September 18, 2017
BRE DDR BR Whittword CA v. Farmers & Merchants Bank of Long Beach
Cal.App. 2nd Dist. (B272168) 8/29/17
After a shopping center tenant defaulted on a loan secured by a deed of trust, the lender foreclosed and took possession of the premises, then transferred the leasehold interest to a third party. The third party then surrendered the premises and the landlord filed suit against the lender to enforce the lease obligations. The court reversed a grant of summary adjudication for the landlord, holding that the lender was obligated to pay rent during the time of possession, but was not otherwise bound by the terms of the lease because acquiring the leasehold estate by foreclosure did not constitute an express agreement to assume the obligations of the lease.