Defenses to Commercial Foreclosure

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Learning that a lender wants to foreclose on your commercial property is very scary. If the lender is successful in foreclosing on the property, it will not only greatly impact your business, but your family, too. Fortunately, there are many valid defenses to commercial foreclosures in Florida, but you must act quickly and work with a commercial foreclosure defense lawyer. An experienced lawyer will understand the common foreclosure defenses to raise during every step of the process.

 

Failure to Comply with Pre-Suit Letter Requirements

Many commercial mortgages require the lender to send a pre-suit letter before filing the foreclosure complaint. This letter may be sent once you are 30 days behind on your mortgage payments. The letter will notify you that you have failed to comply with the terms and conditions of the mortgage, also known as defaulting on the loan.

The letter must inform you of how you can bring your loan back into good standing. Pre-suit letters must also be addressed and mailed to the business. When there is a personal guarantee involved, a copy of the letter must be addressed and mailed to you, as well. If the lender does not comply with these pre-suit letter requirements, that can serve as a defense to foreclosure.

Improper Service

Once the lender has filed the complaint with the clerk of the court, they will attempt to serve you personally, as well as your business. Your business should have already designated a registered agent that can accept service.

The individual service will occur when the process server gives you the complaint. This can happen at either your home or at your business. The server may also choose substitution service, which means they have given the complaint to a relative who lives in your home. Service by publication is another option in which the complaint is published in a county newspaper.

Lenders often attempt service by publication because it does not give you a chance to defend yourself against the complaint. In order to do this though, lenders must take due diligence and attempt to serve you personally. When they do not, this can serve as a foreclosure defense. Additionally, when the lender tries service by substitution, they must ensure that the person they serve with the complaint has the authority to accept it. When they do not, that can also provide a foreclosure defense. Lastly, you must also be served personally. Leaving the complaint at your front door or in your mailbox is not legal.

Affidavit in Opposition to the Motion

In most cases, the lender will file a motion for summary judgment. This is invaluable to the lender because it will allow them to secure a sale date, which saves them time and money by avoiding a trial. Witness testimony is prohibited at summary judgment hearings, and evidence is only presented through the pleadings that have been filed with the court. Lenders typically argue at this point that there are no questions about the facts and law of the case.

An affidavit in opposition to the motion can provide a defense at this point. An affidavit will question the facts of the case and can prevent the summary judgment from proceeding. This is crucial because if the lender is awarded a summary judgment they can not only sell your property but also seize business assets and attempt to collect personally on the debt still owed.

While the affidavit in opposition to the motion will raise questions about the facts of a case, an answer and affirmative defenses can raise questions about the law. This can also prevent a summary judgment from proceeding.

Mediation

During mediation, you, the lender, as well as attorneys for both sides, will meet with a mediator. A mediator is a neutral and objective third party who will attempt to resolve the dispute. Mediators only try to foster compromise and they do not provide legal advice. It is for this reason that it is important to work with a bankruptcy attorney who will ensure your rights are upheld and that any agreement reached is fair.

During mediation, your lawyer will negotiate with the lender to reduce the total amount you owe, and to create a reasonable payment plan. This will allow you to keep the property and avoid foreclosure.

Defenses Against 24-Hour Eviction

If you cannot defend against the foreclosure and the lender wins their case, the property will be auctioned. Ownership of the property is transferred through a certificate of title, after which the new owner will file for a writ of possession. Often, business owners do not know about the writ of possession until they are given 24 hours’ notice to evict the property.

This is very troubling for business owners. 24 hours is not a lot of time to move everything off the property, and that eviction notice includes weekends and holidays, meaning there is little that can be done to stop it. Still, it is important to work with a bankruptcy lawyer at this point. A Florida foreclosure defense lawyer can contact the new owner to negotiate an extension on the time to vacate the premises, a short payoff, or cash for keys. Although these will not help you keep the property, they can make the transfer easier and give you the time you need to vacate the premises.

Our Florida Commercial Foreclosure Defense Lawyers Can Help You

Losing your commercial property to foreclosure can be devastating for you and your business, but it is important to remember that there are defenses nearly every step of the way. If you are in fear of foreclosure, our Fort Lauderdale commercial foreclosure defense lawyers are here to help.

At Loan Lawyers, we understand the defenses that are available in commercial foreclosure cases and we will use them effectively to give you the best chance of remaining on the property. We also have the necessary experience to negotiate with the lender to secure an agreement that is fair and reasonable. When you need help with a commercial foreclosure, call us at (954) 807-1361 or contact us online to schedule a free consultation.

Our Fort Lauderdale foreclosure defense lawyers have helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.