Today’s case is Steed v. FNMA, 301 Ga. App. 801 (2009). Steed owned a rental property, which was a “duplex”, until the Federal National Mortgage Association (“Fannie Mae”) purchased the property at foreclosure following Steed’s default under his mortgage. Steed lived in the downstairs unit and rented out the upstairs unit. After Fannie Mae took possession of the upstairs unit, Steed, claiming that he had been wrongfully evicted from the upstairs and downstairs units, sued Fannie Mae.
Regarding the upstairs unit, the question is whether Steed was a tenant at sufferance or an intruder. If he was a tenant at sufferance, Fannie Mae was required to file a dispossessory action and obtain a writ of possession. If he was an intruder, Fannie Mae was not required to file a dispossessory action before locking Steed out of the premises.
Steed alleged that when Fannie Mae changed the locks on the upstairs unit, he was in possession of that unit as a tenant at sufferance. However, the dispossessory was unnecessary because he was not the occupant of the upstairs unit – he rented it to someone else. By definition, renting the property to someone else means Steed, as landlord, parted with possession of that property. He was therefore an intruder with respect to that property, not a tenant at sufferance. The fact that he lived downstairs was irrelevant.
The bottom line, as stated by the Court, is that “if a former owner is not in possession of the property at the time of the foreclosure sale or subsequently goes out of possession, but then later reenters the property aware that a foreclosure sale has already taken place, the former owner is a mere intruder, and the legal title holder is not required to follow the dispossessory procedures”.