Need help here

[Jschmuck2]

Right:

A very close friend of mine rents a 2br condo. He makes his rent check out to a property mgmt company every month, who (I assume) in turn takes their cut and gives the rest to the owner of the condo.

Today my buddy gets a call from the property manager telling him that the condo is being foreclosed upon. I've been reading up about it online quite a bit and here's what I've learned.

- Your lease is still valid right up until the bank takes the condo back or it is purchased by someone else at auction.

- Therefore, you have to keep paying your rent, as you are still under the terms of a valid lease.

- Once the bank (or whomever) takes possession of the property, they have to issue you a 30 day notice before they can evict you.

I'm not asking for legal advice online, as I understand that attorneys cannot give it. I am, however, asking for legal "tidbits," let's call them.

Has anyone been in a similar situation? Essentially a case of a property owner not using their tenant's rent money to pay the mortgage? It hardly seems fair that my friend has to pick up and move now because some douchenozzle decided to default on a loan but from what I've read, he really doesn't seem to have any other choice.

 

[Jschmuck2]

 

[alkemyst]

what do you want someone to do, wave a wand and puff it's back to normal?

Your friend got the bad end of a deal he should bail out of now.

It's like knowing your are getting laid off in a month but waiting until it really happens before you go look for a job.

 

[pstylesss]

Life isn't fair... what exactly do you want from us?

 

[waggy]

wow that sucks.

guess his choices are stay where he is and pay rent until he gets kicked out.

stay where he is and not pay rent (not a good idea)

look for a new place to live.

 

[olds]

He needs to start looking for a new place right away. Hopefully, he has the deposit money saved up.

 

[Jschmuck2]

Originally posted by: ZeroIQ
Life isn't fair... what exactly do you want from us?

It was a test to see if there were any discompassionate jagoffs on this board.

Congrats, you pass!

 

[Playmaker]

This situation wasn't at least indirectly addressed in the lease agreement?

 

[Jschmuck2]

Originally posted by: Playmaker
This situation wasn't at least indirectly addressed in the lease agreement?

No and I'd think you'd find that it's not in most leases, sadly.

 

[MaxDepth]

Clark Howard can help!

I heard something similiar from his radio program. I think you can contact the bank directly and find out who will own the property, bank or buyer, and negotiate to keep the terms of the lease after the foreclosure.

If it is in NYC and it is a rent controlled building then the new owner has to abide by the terms of the lease. (They cannot jack the rental fee up.)

 

[kranky]

OP, are you from Pittsburgh? That's the only place I've ever heard the term "jagoff" used.

From what I know of these situations, the renter is indeed screwed from the standpoint of having to pay rent until the foreclosure happens, and then not knowing whether he'll have to move or not. In some cases the new owner is OK with letting the renter stay on, but the problem is you almost can't wait around to find out, because the new owner might want to occupy the condo.

However, I have heard of cases where the renter moved out before the foreclosure and dared the owner to do anything about it. I guess the theory is that under the circumstances the owner is going to be more worried about the foreclosure than chasing down a renter.

I have heard of other cases where the renter refused to vacate after the foreclosure (this is a game of chicken, and works better in states where a forcible eviction takes a long time). The new owner sometimes will offer a cash incentive to the renter to move out if it looks like things are going to drag out for months.

 

[Jschmuck2]

Originally posted by: kranky
OP, are you from Pittsburgh? That's the only place I've ever heard the term "jagoff" used.

From what I know of these situations, the renter is indeed screwed from the standpoint of having to pay rent until the foreclosure happens, and then not knowing whether he'll have to move or not. In some cases the new owner is OK with letting the renter stay on, but the problem is you almost can't wait around to find out, because the new owner might want to occupy the condo.

However, I have heard of cases where the renter moved out before the foreclosure and dared the owner to do anything about it. I guess the theory is that under the circumstances the owner is going to be more worried about the foreclosure than chasing down a renter.

I have heard of other cases where the renter refused to vacate after the foreclosure (this is a game of chicken, and works better in states where a forcible eviction takes a long time). The new owner sometimes will offer a cash incentive to the renter to move out if it looks like things are going to drag out for months.

No, this is in CA but I like to sample all of the geographical delights of the insult bush

 

[Gooberlx2]

How long is left on the lease? 30 days eviction notice really should be plenty to find and setup new living arrangements. The other option, of course, would be to call and ask the management company to be released from the lease due to the circumstances, and possibly refunded his deposit.

 

[tefleming]

Originally posted by: Gooberlx2
How long is left on the lease? 30 days eviction notice really should be plenty to find and setup new living arrangements. The other option, of course, would be to call and ask the management company to be released from the lease due to the circumstances, and possibly refunded his deposit.

Hopefully the Mgmt Co has his deposit (and not the owner who is facing foreclosure).

There was an article on CNN about people losing deposits in these types of situations.

 

[AgaBoogaBoo]

Call the bank and purchase the condo?

 

[allisolm]

Originally posted by: Jschmuck2
Has anyone been in a similar situation? Essentially a case of a property owner not using their tenant's rent money to pay the mortgage?

I don't know of any law that says the property owner has to use their tenant's rent money to pay their own mortgage. The two are entirely separate contracts. Which still sucks for your friend.

 

[Xavier434]

Originally posted by: AgaBoogaBoo
Call the bank and purchase the condo?

To be honest, this is your friend's best shot at continuing to live there. Otherwise, unless an attorney is able to dig up something to work with here, the easiest and cheapest thing for your friend to do is to move. Even if an attorney does find something to work with, I doubt that it will result in your friend being able to remain in that condo. At best, he will be awarded with a small settlement of some kind. I feel bad for him.

 

[Jschmuck2]

Originally posted by: allisolm

Originally posted by: Jschmuck2
Has anyone been in a similar situation? Essentially a case of a property owner not using their tenant's rent money to pay the mortgage?

I don't know of any law that says the property owner has to use their tenant's rent money to pay their own mortgage. The two are entirely separate contracts. Which still sucks for your friend.

There isn't, unfortunately. They could and very well may have used that money to buy a new pool or what have you.

 

[dullard]

CNN has been running sob-stories on this very subject all week. I've seen at least 2 of those articles. Here is one of them. Try searching their website for the rest. From the link:

Charles Nelson has paid about $30,000 in rent since moving into a spacious four-bedroom home in August. He was stunned when a real estate agent knocked on his door recently and said the home was in foreclosure.

Charles Nelson paid $30,000 in rent, yet he faces eviction because his landlord is getting foreclosed upon. His landlord had not paid the mortgage since he moved in and the bank is now demanding the house back. Nelson will also lose his $7,700 security deposit.
...
Foreclosure laws are governed state by state, and there is not much renters can do when their landlords get foreclosed on. There is no guarantee of being allowed to stay in the homes or ways to get their security deposits back.

"There is very little in the way of protections for tenants," said Nadine Cohen, an attorney for Greater Boston Legal Services, which represents low-income people in Boston. "Many times, the tenants don't even know their buildings are being foreclosed."

Cohen said some states in the Northeast have begun introducing legislation to protect renters from being evicted. A U.S. congressional bill that would have addressed the issue has been held up in conference committee.

 

[Beattie]

Originally posted by: Jschmuck2

Originally posted by: allisolm

Originally posted by: Jschmuck2
Has anyone been in a similar situation? Essentially a case of a property owner not using their tenant's rent money to pay the mortgage?

I don't know of any law that says the property owner has to use their tenant's rent money to pay their own mortgage. The two are entirely separate contracts. Which still sucks for your friend.

There isn't, unfortunately. They could and very well may have used that money to buy a new pool or what have you.

Uhh, of course. And you can spend your money on a new pool instead of paying your own mortgage just the same. Your friend has no rights to tell someone else what to with their money.

 

[Injury]

Best your friend can do is keep a close watch on the situation. Can't hurt to try talking to the landlord/management company, but if they foreclose you can bet the deposit won't come back without going to court over it.

Is it in the realm of possibility (financially) for your friend to buy the place from the owner either before it forecloses or from the bank? You may still luck out and someone could buy before it forecloses.

 

[timswim78]

What a terrible situation to be in. This run in the housing market created loads of shitty wannabe landlords.

Thanks Carlton Sheets and Robert Kiyosaki

In what state does your friend live?

 

[Jschmuck2]

Originally posted by: Beattie

Originally posted by: Jschmuck2

Originally posted by: allisolm

Originally posted by: Jschmuck2
Has anyone been in a similar situation? Essentially a case of a property owner not using their tenant's rent money to pay the mortgage?

I don't know of any law that says the property owner has to use their tenant's rent money to pay their own mortgage. The two are entirely separate contracts. Which still sucks for your friend.

There isn't, unfortunately. They could and very well may have used that money to buy a new pool or what have you.

Uhh, of course. And you can spend your money on a new pool instead of paying your own mortgage just the same. Your friend has no rights to tell someone else what to with their money.

What a lovely person you must be in life.

 

[Injury]

Originally posted by: Jschmuck2

Originally posted by: Beattie

Originally posted by: Jschmuck2

Originally posted by: allisolm

Originally posted by: Jschmuck2
Has anyone been in a similar situation? Essentially a case of a property owner not using their tenant's rent money to pay the mortgage?

I don't know of any law that says the property owner has to use their tenant's rent money to pay their own mortgage. The two are entirely separate contracts. Which still sucks for your friend.

There isn't, unfortunately. They could and very well may have used that money to buy a new pool or what have you.

Uhh, of course. And you can spend your money on a new pool instead of paying your own mortgage just the same. Your friend has no rights to tell someone else what to with their money.

What a lovely person you must be in life.

Well it's not like he's lying or being a dick or anything. Just because someone is in a position where they have to be responsible with money by no means implies that they are capable of doing so. *cough*Enron*cough*

 

[AlienCraft]

Originally posted by: allisolm

Originally posted by: Jschmuck2
Has anyone been in a similar situation? Essentially a case of a property owner not using their tenant's rent money to pay the mortgage?

I don't know of any law that says the property owner has to use their tenant's rent money to pay their own mortgage. The two are entirely separate contracts. Which still sucks for your friend.

This is why I would ask for a credit check on the landlord before committing to a house or condo rental in these times. Anyone who balks at that doesn't get to run my credit or cash my checks.
This is one's only hope of insight as to the financial solvency of that prospective landlord.
Of course they can always screw up after the inital check, but who can prevent chance?