this is just horrible [tenant evicted after landlord loses property in foreclosure]

The BBQ Pit
41

So what? The point is that if the landlord wants you out, then you are out. Sure it can take a while. Just like it will take a while to get rid of the woman in the article, if she decides to put up a fight.

My experience is different. I’ve been booted 3 times from rental property simply because the landlord wanted to use the property for some other purpose. (I was always a good tenant.) On a fourth occasion, the new landlord did essentially the same thing by hitting me (and all the other tenants) with big rent increases. That’s a risk you take when you rent.

Again, that’s a natural risk associated with renting. You don’t own the place.

For the record, her security deposit was only $1900. The new owner has already offered her $1000. I have a feeling that she could get a good deal more than $1900 if she negotiates with the landlord.

Umm . . . the landlord already has grounds for eviction. So of course she will lose in housing court. However, she can easily hold up the landlord for a few months and – in effect – get her money back and then some. And the landlord knows that too, which is why it’s a virtual certainty that she can cut a reasonable deal with the landlord.

As mentioned above, I’ve been booted numerous times from rental property and each time I worked out a reasonable deal with the landlord without a lot of trouble. It never even got to litigation.

In order to save the trouble and expense of formally evicting her.

That’s true, but having to move out a couple months early is not such a terrible thing. It’s already late March, and no housing court judge is going to prevent her kids from finishing school this year.

42

Wow Anaamika, I can only assume you are intentionally mischaracterizing my position, because you would have to intentionally do so to be that far off.

The article does not present a lightning strike situation. It presents a situation where something totally normal and reasonably foreseeable happens to a person that chose to take the risk of that happening in a business transaction.

It’s like the OP posted an article where someone without an employment contract in an at-will state got laid off. Well, so what? That can happen. If someone thinks it’s such a bad thing then they can take steps to reduce the risk (ie, have an employment contract or start their own business).

Again, none of the above applies to the $6000 or other legal rights she has.

43

Yes you fucking troll having $6,000 stolen was clearly a legitimate business transaction.

44

What does the bank even do with the property? They tend not to be in the real estate management business AFAIK.

45

How about you read just a little further past the part you quoted, smart guy.

46

She got cheated by a crook. There are such things as contracts (and yes, a lease is a contract), and you generally expect to get what you paid for. She is out all that money and has shit for it. It’s the property owner’s fault and he should be sued for breach of contract, or jailed.

And you’re an asshole.

47

Putting aside my personal feelings for the situation, it would seem to me that the increasing frequency of stories like this could cause a further loss of confidence in the real estate (rental) market and it’s already in bad shape. So, to me, it doesn’t sound too good from a cold-hearted capitalist POV, either.

48

Yeah, except the lost money is a direct result of the “forseeable” bullshit surrounding having a house foreclosed out from under one when one is under a lease agreement.

Frankly, legally speaking I’d support laws so that either leases and other obligations should transfer with property ownership, or landlords should be only permitted to rent out property they own outright, and do not have mortgaged, or landlords should be required to disclose aspects of the property title (such as mortgages or liens) and their finances that may be pursuant to a potential premature termination of an otherwise-fine lease agreement.

49

As Ann Richards said, some people are born on third base and spend their whole lives thinking they hit a triple.

50

I was posting well after my bedtime and not thinking this through. The issue I addressed was whether it should be a crime for a landlord to accept rent once the landlord is in default on the mortgage.

Yes, the landlord’s duty to pay the mortgage is wholly independent from the tenant’s duty to pay rent. A problem with making this proposed law is that a landlord might default on the mortgage due to a temporary financial setback and may have the right and ability to redeem the mortgage so long as the tenant keeps paying rent. However, if the landlord is barred from collecting rent once in default on the mortgage, then the proposed law could essentially force an otherwise redeemable situation into a foreclosure.

On the other hand, I can see where it sucks to be a tenant paying rent to a landlord who is intentionally defaulting on a mortgage, allowing foreclosure, ultimately probably forcing a tenant out post-foreclosure. While that does indeed suck, so long as the landlord is the owner and the tenant is in possession, the landlord is entitled to rent regardless of the landlord’s performance of his independent duty to pay the mortgage.

The problems seem to arise in situations when a tenant has insufficient notice of the foreclosure proceeding and sometimes tenants don’t know who the owner is. If the tenant has no notice of foreclosure, then the tenant could end up paying rent to the former landlord even though the landlord is no longer the owner. Also, the tenant could pay a full month’s rent to the landlord on the 1st of the month only to find out later there is a foreclosure scheduled for the 6th day of the month.

It seems the law should not criminalize a landlord’s right to collect rent; rather, the law should focus on providing actual notice of foreclosure proceedings to tenants, allowing tenants to plan and pay rent accordingly. Perhaps the law should state that a mortgage holder must serve all of foreclosure notices to the subject property and the landlord.

I understand that a mortgage holder must post a notice of foreclosure on the door at the premises and landlords sometime steal the notices. The law could require the mortgage holder to mail the notices in addition to posting and could also require the holder to make reasonably diligent efforts to provide actual notice to any residents before being allowed to simply post a notice.

I think the mortgage holder must record documents with the county before a foreclosure. The law could mandate the county mail any recorded foreclosure docs to the subject property.

I believe in California, you can’t have a foreclosure sale without at least 90 days notice. Also, a tenant must have 60 days notice to vacate post-foreclosure. With strong notice provisions, a tenant ideally will have 150 days notice of a potential eviction.

Forcing landlords to put security deposits in escrow also sounds like a good idea. How does that work? When a landlord claims the deposit post-tenancy, does the landlord have to submit a claim to the escrow holder to get the money?

51

Yea that perfectly addressed the deposit not being returned. If her followers are any indication Ayn Rand sure had her head up her ass.

52

I just read the article in the OP. It seems a huge problem was a lack of foreclosure notice to the tenant. The article also mentions taking on a new tenant while foreclosure is pending.

That’s just evil.

The landlord pockets a security deposit and a couple of month’s rent from the new tenant. The tenant takes possession after all the foreclosure notices have been served. The landlord knows all along the property will be foreclosed in short order. It’s the landlord’s last ditch cash grab on his way out the door. The landlord knows the tenant will be left with nothing but the right to sue the landlord, who is probably judgment proof anyway. The tenant in the article sounds like she didn’t even know the foreclosure had happened until after the fact. Evil.

53

Not a bad idea.

What about bankers that get a lower price for property by offering it to the tenant, rather then putting it up for auction?
THEY should be fired for not properly managing their shareholders assets.

54

It probably varies by state. My experience in Chicago was that upon leaving the apartment, after any discussion/dispute regarding cleaning or repairs was settled, I was presented with a check for my security deposit and the interest it had accumulated while in escrow. If there were damages to be paid, that amount was deducted from the security deposit and there was a formal statement involved regarding the amount in escrow, what damages were being paid for and the amount, and the net money coming back to the tenant (me).

As my dealings with landlords were pretty civil and involved discussion and negotiation rather than conflict I never moved to the “resolve real dispute” phase. However, if the two parties can’t resolve differences on their own it could wind up with lawyers, in arbitration, or even in court. It is clear, however, that a landlord can’t legally hold onto the security deposit without making some claim of damages.

This is, however, a situation where mileage will vary considerably depending on where you are.

55

I’m pretty sure Ayn Rand didn’t advocate fraud, theft or breaking contracts (unless the contracts were unethical).
Also she didn’t lose $5700. That probably would be broker fees(1 month), security depositand last month’s rent by my calculations:

"Brown was paying $1,900 a month in rent. She had also paid $5,700 for a security deposit and broker fees to secure the house. "

$1900 Broker fee
$1900 Last months rent
$1900 Deposit

$5,700

So she should probably get back the $3,800. Her deposit and lastmonths rent (or just not pay the last month). The broker fee stays with the broker.

56

I am not intentionally mischaracterizing your position, I assure you. It’s not something I ever do. I apologize if it came off that way. I’ll admit my reaction to you is a combination of your responses from other threads.

I’m not going to argue you point by point. That way lies insanity. But I completely disagree with you that it is a forseeable eventuality. There are many aspects to renting. Having the ground swept out from under you when you have been following all of your obligations isn’t right.

Your comments about being laid off in various threads are really what make me feel that you are a prince, and have never known how the common people have to live. You very much have the atttitude of “let them eat cake”.

57

If it were me, I would be very very tempted to go to that shitstain’s home and get my deposit back, one way or another. I have trouble imagining that what he did was legal. I know it was highly dishonest and unethical.

58

Bolding mine, I was just about to comment on the broker, who is the 3rd character in all of this. If anyone should be expected to go down to the sub-basement at the clerk’s office and check up on the owner’s mortgage then it’s the real estate broker, he (or she) is the person who in theory is managing this real estate transaction. Yes I know he’s not legally required to give a shit, but maybe he should be. For all the money that brokers skim off the top you’d think they could actually add some value to the metro-NYC rental market.

59

The tenant and reporters Sheila Steffen & Deb Feyerick

…Omitted a big part of the equation. That part of south central Nassau County has been slammed with huge annual increases in property taxes. That’s to be expected in an area where many teachers, police and sanitation workers earn 6 figure salaries and its patronage filled CSEA gov’t employees get paid to do nothing. I live 10 miles from there - and estimate the annual taxes for an average home in Roosevelt to be about $10,500.

That article doesn’t mention what the monthly outlays were - but if I had to guess, I’d assume that “deadbeat maggot” compared $1,900 rent + equity vs.mortgage + taxes + upkeep, saw an operating loss, said fuck it and walked away. Doesn’t make it right - but it does make it the financially sensible thing to do.

60

Is your issue the sympathy the tenant has garnered in this thread or that you feel the tenant didn’t do enough due diligence and deserves whatever she gets?

Do you think the landlord owes her the $5700 security deposit?

I realize there is very little chance the tenant is going to get the money returned but, presumably, the contract the tenant signed stated the deposit was to be returned (provided the house was in the same condition it was when rented).

Do you think the tenant deserves her deposit but no sympathy because she created the situation by not researching the landlord’s position?

Or do you think the tenant deserves neither her deposit nor sympathy because she created the situation by not researching the landlord’s position?

If you think due diligence is the issue and people are at fault when they don’t do enough research, what do you think of those people who invested with Bernie Madoff? For years, people have been saying his returns were way too good to be true but people kept on investing with him.

Do you think those investors deserve their money back but no sympathy because they created the situation by not researching Madoff’s fund?

Or do you think those investors deserve neither their money back nor sympathy because they created the situation by not researching Madoff’s fund?

What do you think of the landlord in the newspaper article? Do you think what he/she did was unethical?

Also, you seem to think home ownership provides protection against risk.

This is an article about people who purchased very expensive condos, in newly constructed buildings, and the problems they encountered in their new homes.

http://www.nytimes.com/2004/01/08/garden/megadollar-homes-megapainful-headaches.html?pagewanted=all

Leaving aside whether or not mold invasions are a real or imaginary problem, do you think the owners of these condos should be reimbursed for the problems they encountered?

I can tell you that an architect I know would often pass by one of these buildings, as it was being constructed. He told me he knew there would be problems with this building because he could see what a poor job the construction company was doing. Obviously, people without architecture or engineering degrees would have more difficulty in making these distinctions.

If you purchase an apartment/house and encounter problems caused by shoddy construction, is that your fault? Or rather, should you have to swallow whatever costs you might encounter for not performing enough due diligence?

Thanks.