Tenant evicted even though she pays rent on time

[JARNJ3]

These folks appear to be collateral damage as a result of this weak economy.

Any ideas\suggestions how renters could protect themselves? I know that they sell renter's insurance for the contents of the rental unit - but I wonder if they could sell some type of insurance against your landlord going into foreclosure? I know some landlords can order credit reports on prospective leasees - I wonder if the leasee could order on a potential landlord?

So glad we own our own home now - but we rented for years. This hits very close to home.

http://www.cnn.com/2009/US/03/23/landlord.foreclosure/index.html

By Sheila Steffen and Deb Feyerick
CNN's American Morning

ROOSEVELT, New York (CNN) -- When Lisa Brown moved into her rental house on Long Island last summer with her three daughters, she says, it felt like a new beginning.


Lisa Brown has to move out of her rental house because it is facing foreclosure

After living in apartments, the spacious house got her attention immediately. "It was bigger than what I had lived in," she says. Brown was also won over by the neighborhood with its tidy homes and good school district. "I wanted to come here, and I wanted to see my kids graduate from this school district."

But they hardly had a chance. Instead, fighting back tears, she says, "I have to get out."

Brown and her family are being evicted not because of anything they did, but because her landlord defaulted on the mortgage and the house fell into foreclosure. The house was recently sold at auction.

The bad news came just seven months after Brown had moved in. A real estate broker came to the door and handed her an eviction notice, telling her she had 30 days to vacate. "I was hysterical, I was like, what do you mean?"


The broker explained that the landlord no longer owns the property and that the lease was no longer valid. Brown had no idea the house was in foreclosure. As a tenant, she always paid her rent on time, and she assumed the rent was going toward the mortgage.

"I didn't see there was a problem," she said. "You know, I'm paying rent, and she's putting it toward her mortgage, I didn't see the problem."

Unfortunately, Brown is not the only tenant caught off guard. According to the Center for Housing Policy, nearly 20 percent of all foreclosures are on rental properties, and tenants' rights in such situations are minimal.

 

[rabx5]

I wonder if there is a way she can work with the company and rent from them?

 

[Mickey'snewestfan]

Do they definitely not have rights?

I got kicked out a house for similar reasons, but I'd been there for more than a year and so was on month to month -- no protection there.

However, my understanding is that in my area if you sell a house that's rented the new owners have to let the tenant stay the duration of the lease -- seems like that would be the same if the bank reposesses.

At least it seems like it should be.

 

[Qtips4Mick]

Sadly, that is why I never rented a private home. If the man had sold it they could have to move also. You are at the mercy of the owner. I saw her interviewed on TV. She will need to get another apartment.

 

[ajk912]

That's so sad. I always worried that would happen to us when we were renting a private house.

 

[ktulu]

These folks appear to be collateral damage as a result of this weak economy.

Any ideas\suggestions how renters could protect themselves?

Don't unpack and keep U-Haul's phone number in your cell phone.

 

[JARNJ3]

Don't unpack and keep U-Haul's phone number in your cell phone.

Well that seems like very helpful advice.....

 

[ktulu]

Well that seems like very helpful advice.....

No problem

 

[bsnyder]

What does this mean:

"CNN tried to reach the owner, who lives upstairs, for comment, but her phone was disconnected, and no one answered the door.

I thought this was a rental house, not an apartment building?

 

[manning]

Is there a lease involved??

I believe the lease has to be honored by the new party while in force.

 

[bsnyder]

Is there a lease involved??

I believe the lease has to be honored by the new party while in force.

No, the renter has very little recourse. It's one of the disadvantages of renting.

But in this current economic climate, I think most banks are delighted if the foreclosed property already has a paying tenant. Unless the rent is way below market rates.

 

[djm99]

I saw on CNN this summer that in some parts of Georgia a sheriff refused to evict renters like that. It was many evictions like that. I think this home is a duplex.

 

[bsnyder]

I think this home is a duplex.

Does it say that anywhere - I couldn't find it in the article, and the video on the CNN website kept getting hung up.

 

[djm99]

Does it say that anywhere - I couldn't find it in the article, and the video on the CNN website kept getting hung up.

No it didn't but they look like duplexes and considering that the owner lives upstairs I assumed. I could be wrong of course.

 

[MoniqueU]

my old neighbors in the process of a divorce are doing this to their tenants now, well rather the cheating lying scum is He made sure he bought himself a new bigger house up the street, rented out the old one but hasn't paid a payment on the house since last august. The bank tried to work with him and he didnt get the paperwork in on time and then got ticked off at the bank. So it is just a matter of time for these poor renters that went to all that trouble to move in. I almost feel like leaving an anonymous note on their door that their landlord is not making the house payments but I think he would figure it came from his soon to be ex and he is a very rageful individual and vindictive too, it could cause her all sorts of problems she doesn't need on top of everything else.

 

[ROIE01581]

i was renting a condo and it was sold for back taxes. I had a lease and I was given 60 days to move. A lawyer purchased it and I had to move. He sold it within the 60 days.

As a renter you have no right lease or not. If the owner you signed with sells or loses the property you have to get out if the new owners want you out. I even lost my deposit.

 

[NotUrsula]

About the only helpful thing is to get a local law passed that says that the occupants of the property must be notified if foreclosure proceedings are filed; that is -- notice being hand-delivered to the door, and giving the occupants the name of the mortgage holder. That prevents ugly surprises from new owners.

If you know this information, sometimes you can be in a position to try to negotiate with the mortgage holder to assume the mortgage.

 

[manning]

Live and learn. I never had a lease so didn't know so:

Most renters will lose their leases upon foreclosure. The rule in most states is that if the mortgage was recorded before the lease was signed, a foreclosure will wipe out the lease (this rule is known as "first in time, first in right"). Because most leases last no longer than a year, it's all too common for the mortgage to predate the lease and destroy it upon foreclosure.

 

[powellrj]

This happened to my DDILs cousin. They didn't learn until the sheriff came to the door to evict them. Luckily they were given a week to find a place and move, but it was such a mess. What makes it even worse was they were renting from another relative.

 

[cybrkitn]

What does this mean:



I thought this was a rental house, not an apartment building?

It could have been a two-family home. Ten years ago DH and I had rented the upstairs of a two-family home. Our landlords didn't live on the property, they rented out the main floor to another tenant.