US Financial, LP v. McLitus
Facts: A buyer purchases a home occupied by the owner at a foreclosure sale. The buyer immediately serves the owner a three-day notice to quit before recording the transfer of ownership. The prior owner refuses to vacate and the buyer attempts to regain possession under an unlawful detainer (UD) action.
Claim: The prior owner seeks to retain possession of the property, claiming the notice to quit and subsequent UD action are invalid since the buyer was not the owner of record for the property when they served the notice to quit, as they had not yet perfected title.
Counter claim: The buyer claims the notice to quit is valid since the buyer only needs to perfect the sale before serving a notice to quit, not the title.
Holding: A California court of appeals holds the notice to quit and subsequent UD action are invalid since the buyer recorded the deed after serving the notice to quit, and thus had not yet perfected title. [US Financial, LP v. McLitus (November 30, 2016) _CA4th_]
Editor’s Note — In Dr. Leevil, LLC v. Westlake Health Care Center, a more recent case with an almost identical fact situation, a higher court issued a contrary ruling. The court in Dr. Leevil, LLC held the buyer of a foreclosed property need only possess the property before serving a three-day notice to quit, and does not need to perfect title prior to serving the notice.
