Landlord on road to BK

[catleg]

Boy, this is pretty edgy. I don't know what I'd do in this situation. I take it you're out of work, and have some rental condos that you know you're eventually going to lose but why not collect some rental income in the meantime?

I think what I'd do is tell the tenants the situation and that you're reducing the rent to give them an allowance to cover their subsequent moving costs.

Of course if they had any brains, they'd immediately stop paying rent, cause what are you going to do, evict them?

This would be a great case study for an ethics class.

[dingdong]

Hey,OP, what state are you in?

I have some direct experience with your situation.

I was a tenant in a FC property that the LL Bk'd on.

Just be aware that some states have laws on rent skimming (collecting rent while not paying the mortgage)

Signing a lease while in FC w/o disclosure of the FC may get you into some hot water in civil court as well.

Many states have reacted to the FC crisis by writing law that protects tenants.

California has rent skimming laws, I believe Oregon does as well.

You may have already informed your other tenant of the FC, but if you haven't I would highly recommend doing it.

It is not fun not knowing when/if/where you may have to go because of a LL financial mess.
If you have already informed them, kudos to you for being honest.

If you are in one of the states that typically has cash for keys offers on foreclosures, you might want to inform your tenants that an offer may be looming from the bank. Disclosing the FC is the absolute right thing to do.

Even though you are in BK, your lender will probably file a motion for relief from stay to move forward with FC, so don't count on knowing an absolute date certain for eviction for your tenants.

[tknj99]

Hey DingDong,
Im in Florida. I leased both properties before I was in any state of foreclosure as i was still trying to negotiate with the banks and sending them all the paperwork they needed. However, I dropped the ball by not responding to all of their calls, and I received a card in my mailbox on Monday from a process server saying that I need to call them immediately. From my reading on this website and consulting my attorney, I decided not to call and instead let them find me. I also went on my counties public records and found that Chase has initiated foreclosure suits on me.
So.. havent been served yet. but will inform both tenants to not pay anymore after this month on advice of attorney. That will allow the next 6 months to have no rental income.. It will be a big drain on me with still paying all the maintenence fees on all 4 properties, but luckily i have 20k from a recent sale that I will use to cushion this period. As well as a few k to do some needed home repairs.

Thx

[shabam]

Are you allowed to exempt that sort of cash in Florida?

[JRScott]

Not per sey shabam but if he uses it in his home then yes ....florida has unlimted exemption for homestead. But as he says he'll need to use a lot of it for taxes, maint fees etc up to and through the filing process. Probably by the time he has to file he'll have used up most of it on legitimate expenses.

[shabam]

Yep I see. Wouldn't want them to go through it all and then have the trustee say thank you for the nice present.