Anybody rent out their property after discharge but before foreclosure?
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yes. what is your question? -
1. Did you notify the renters that the house would be going in to foreclosure?
2. Did you set a term for the lease or was it month to month?
3. Did you require a security deposit?
4. Did you have to reduce your monthly payments to comparables in your area to attract a renter?
5. Are your renters still there and/or has the property been foreclosed on?Comment
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brokeded, here is a link I found very useful ....
This part is particularly relevant:
"Suing in Small Claims Court
A lease-holding tenant who has to move out so that new owners may move in might consider suing their former landlord in small claims court. Here's how it works.
After signing a lease, the landlord is legally bound to deliver the rental for the entire lease term. In legalese, this duty is known as the "covenant of quiet enjoyment." A landlord who defaults on a mortgage, which sets in motion the loss of the lease, violates this covenant, and the tenant can sue for the damages it causes.
Small claims court is a perfect place to bring such a lawsuit. The tenant can sue the original landlord for moving and apartment-searching costs, application fees, and the difference, if any, between the new rent for a comparable rental and the rent under the old lease. Though the former owner is probably not flush with money, the awards in these cases won't be very much, and the court judgment and award will stay on the books for many years. A persistent tenant can probably collect what's owed eventually."
So it sounds like the safest bet is to rent month to month, for your own protection.Comment
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Thank you Strawberry! That clears up some of my questions.
My thought was this...advertise a short-term lease with possibly cheaper than comparable rents in the area and cheaper security deposit to possibly find a tenant faster instead of having to compete with other houses in the area. I'm not planning to look for someone for a long term commitment here although it would be nice if it worked out that way. Let them know up front that the house will eventually be foreclosed on, hence the cheaper rent. Maybe do a 3 month lease with month to month after that or maybe month to month is best
I knew about the 90 day clause and the new owner moving in clause. My concern is if I can legally write that into the lease to keep a disgruntled renter from taking me to court. Two houses down from is renting for $1250 for 2150sq ft. Mine is over 2300 brick with a 6 ft privacy fence. I figured I could still maintain the yard as a bonus and be able to keep an eye on the place.
Say...aren't you moving down here?
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Yes, Brokeded, hubby is already there working. Can you pm me with your city? He is working in Pineville, and we are considering either something near there, or up near Huntersville. Our granddaughters are going to be near Statesville, and we were looking halfway in between. Then I figured out we would spend less in gas if we lived near Pineville and drove an hour to visit them once a week. But what about your county's rental expense for Schedule J? That's why I am going to Meck county, because they have a $1177 rental allowance. I am looking to spend exactly what you will be asking, $1250.
Oh, I just realized that is not what you will be asking, I'm an idiot.Last edited by StrawberrySu; 06-29-2011, 09:41 AM.Comment
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Sent you a PM, I think? Something screwy going on.Comment
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nope didn't get it! I have sent so many pms on here that never went through!Comment
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(1) Yes. We also listed the tenants in our BK paperwork so they received the notice like all creditors. Prior to receiving that letter we sent our own letter letting them know our intentions to file and what it means to them.
(2) We were already in a month-to-month lease at that point. But I would recommend that route just to keep options open.
(3) They were already renting from us and had a deposit on file with the management company. I would recommend a security deposit. Helps to keep people honest no matter how honest they initially seem.
(4) Our renter was already in place. But after we filed, her husband left her (on Christmas eave no less!) and she wanted to stay. Since we already filed, stopped paying the mortgage and expect it to foreclose we told the management company to offer her below market rate – certainly no more than she could easily afford. This way she can stay in the house she likes cheaper than renting somewhere else and save some money. We signed her up for a month to month lease. Someone is going to ask what we are doing with the rental income and the answer is we are keeping it in a separate account and expect to turn it over to the Trustee or bank. Our intentions are not to keep the money and offered this as a solution to help the renter out and provide employment to the management company.
(5) Here we are a year later and we still have the renter and the property. We received two letters so far from the bank, one talking about foreclosure and our options, the other telling us we have to come up with a large amount of money to keep the home. We told the management company that when we have a firm foreclosure date we would let them know so everyone can make their plans.
As far as the rental contract goes typically what happens in a foreclosure is the bank takes over the contract and then when it expires they have the renters move out and sell the home. Banks have so many homes on the market they don’t have an issue with letting the lease run out before selling it. We had a different property foreclose before we filed and the bank simply contacted the management company and told them where to send the check – completely transparent to the renters. Now if the banks would have worked with us on the foreclosure we may not have needed to file, but that does not matter now.Comment
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Not trying to be rude, but if YOU were the kind of tenant who is planning to pay the rent on time, take care of the premises, etc, would YOU agree to rent from a person that you know is insolvent and letting the house go to foreclosure? I sure as hell would not, no matter how good a deal it seems, and if I was planning to rent from a private owner, you bet I'd pull the ownership records and verify that the property is not in foreclosure.
Of course, I would never rent anything where the landlord doesn't pay the utilities, because that is my "insurance" against absurdly high utility bills due to grossly inefficient heating and air conditioning equipment, un-insulated walls and ceilings, unreasonably drafty doors and windows, etc. So therefore, the only thing I would rent is an apartment in an apartment complex, and those don't come with foreclosure worries. Even in the unlikely event that an apartment complex is foreclosed upon, the existing tenants are not affected.Comment
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I rarely see a place for rent with utilities included, especially houses. And when I do see that I figure it means the landlord is gonna be pretty stingy with the utilities. I personally would never again live in an apartment with noise all around .... ugh! Give me the peace and quiet of a home. I would consider a condo or townhome with one connecting wall if I couldn't find anything else. So to each his own.Originally posted by bcohen View Post
Your comment about the OP did seem kind of rude to me. I thought the general theme of this board is we are all in the same boat, be it rowboat or yacht. Just because someone is letting their house go into foreclosure (in today's economy especially) doesn't mean they are not a good person. Doesn't mean they wouldn't be a good landlord for the time they have left. There is probably not a single person on the board who wasn't raised to believe real estate doesn't depreciate like this all across America. Maybe if you lived next to a nuclear plant that had a leak, you could expect this. It's like we ALL live next to a nuclear plant. It's like telling someone "Well, just because aliens have never invaded Earth so far, doesn't mean you shouldn't plan on it to happen at some time, then your property will be worthless".
Also, there are many people out there on the other side of the coin, who are looking for places to rent. It is difficult to get anyone to consider renting to you when you are behind on your mortgage. So according to your scenario we would be better off to have a great deal more homeless people. And how does it help to have a house sit empty? Doesn't help the bank, because now they have a property vulnerable to break in, theft and vandalism. If homeowners stay in their property during the process it allows them to save for the future, and keep the property safe. As well as recoup some of their remodeling dollars, and not want to destroy the place when they leave. If they have a renter instead, this can also help in this process. It helps the neighbors, many of whom are friends, and maybe softens the blow of the eventual foreclosure not to have a blighted property next door, and worry about who it will draw in. I see nothing wrong with what the OP is doing, and I see a whole lot right with what he/she is doing. Sorry if this doesn't make a great deal of sense, my brain is tired.Comment
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^ what she said^
nicely put
Keep On Smilin'Comment
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What I was trying to say is that a reasonable person looking to rent would want the protection of a long-term lease (at least a year) and not a month-to-month "you might have to move at the drop of a hat" type arrangement. Now if you want to let a friend stay there for free, or for a nominal cost, then that's ok as they're getting what they're paying for.
Also, after the experience my sister had living in a small 1-bedroom apartment and getting $200+ electric bills in the summer (due to the building's poor insulation and old, inefficient equipment) I have decided to only live in apartment complexes where the utilities are included. Such apartment complexes normally provide modern energy efficient appliances and use a recirculating boiler/chiller system for the heat and air conditioning, which works very well and uses very little electricity.
And you're right that very few single-family homes would include the utilities, and certainly not ones that are rented out by a private owner. However, that's ok, because I would never live in one, because the rent people charge is often as high (or in some cases higher) than the monthly cost to own such a property. Especially in this market where housing costs have come down, but a lot of people are stuck with "legacy mortgages" taken out when the market was sailing high. Of course right now, my credit is shot to sh*t and I don't have the money to buy a house and maybe never will, but then I'd rather live in an apartment than pay someone's mortgage and then some--plus deal with high utility bills--just to live in a house that I don't own.Comment
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B, I get your point BUT
Many here have learned the hard way that getting into one of those complexes often requires credit ratings that are better than lots of us can offer
Keep On Smilin'Comment
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