Tenants Beware of Rentals in Foreclosure

By
Real Estate Broker Owner with BROKER of Green Realty Properties® - 954-667-7253 BK3175566
http://actvra.in/GtK

Down here in South Florida, the demand for rentals has shot up drastically, and so have the rental prices. Part of the reason why rentals have become so popular is because many former homeowners now have a short sale or a foreclosure on their record, and so they must wait a minimum of 4 years (in most cases) before qualifying for loan to purchase a new home. Many landlords are also homeowners who are in foreclosure, and that brings up the question of: what happens if you're renting a property that goes into foreclosure?

A local attorney, Peter Sobota, answered this question in our local news magazine, DRW. According to Mr. Sobota, because the lender's interest in the property is greater than the renter's interest, under basic property law, the sheriff can come and serve you with a writ of eviction at any point. Fortunately, Congress passed the Protecting Tenants at Foreclosure Act in May 2009, which gives tenants a minimum of 90 days written notice before being evicted as a result of a foreclosure. If the tenant entered the lease pior to the foreclosure action, the tenant can stay in the property for the remainder of their lease term, as long as the new owner is an investor not planning to make that property their primary residence.

I know that this Act has helped a lot of tenants by giving them enough notice to find a new place and move out, but the Act is set to expire on December 31, 2012. Unless Congress extends this Act, there may be a whole lot of surprised renters getting knocks on their doors from the sheriff. Mr. Sobota highly recommends that before you enter into a lease agreement, hire an attorney to research the landlord and the property to make sure that there are no legal actions pending, and I very much agree with him.

Yes, hiring an attorney may cost you a bit, but you'll be avoiding a very large headache later on, and that's worth it.

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If you or anyone you know need help Selling or Buying a Home in Broward & Miami-Dade Counties, please don't hesitate to call me at 954.667.7253

 

Help lots of people and have a great day!

Patty Da Silva, CDPE©, RESS®, AHWD®, e-PRO®, GREEN, CFS, TRC, RSPS

BROKER - REALTOR® Serving South Florida ::: 954. 667. SALE (7253) ::: Green Realty Properties®

Visit www.WeLoveSouthFlorida.com for SouthEast Florida's best properties.

 

 

Copyright © 2008 - 2013 By Patty Da Silva, CDPE©. All Rights Reserved.

Legal Stuff: This article (Contents) reflects the opinion of the author and it is not to be considered legal advice. The author is not an attorney or a CPA. If you are in need of legal or tax advice, it is recommended that you to contact a trusted professional advisor.

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Rainer
21,866
Marianna Athanasiadis
Green Realty Properties®

I hope they extend the Act. It's hard enough to find a good rental down here for a decent price, let alone at the drop of a hat.

August 17, 2012 09:43 AM
Rainmaker
411,963
Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR
Top Listing Broker
BROKER of Green Realty Properties® - 954-667-7253

Bruce, you're right, some attorneys cost a lot of money. But I think if you call around, you can get a deal. They're struggling too down here.

Marianna, I know!

August 17, 2012 10:02 AM
Rainmaker
1,219,842
Ron & Alexandra Seigel
Luxury Real Estate Marketing
ra@napaconsultants.com

Patty,

Excellent point and so glad you brought that up.  We used to pull a prelim on every property we listed for lease and for sale, to make sure that the person really owned the property.  We had a case where someone had owned it a property before and was trying to lease it.  Luckily, the title company was so on the ball we had the latest info immediately... It is good that Florida passed a law protecting the tenant for 90 days.  A

August 17, 2012 10:20 AM
Rainmaker
373,651
Gina Tufano
Ask Gina & Company, Northern Virginia Real Estate
Ask Gina & Company with Keller Williams Realty Loudoun Gateway

Patty - Great post! I remember reading many articles back in 2008 where tenants were forced out of their homes because of their landlords foreclosure. It's definitely a great idea to research a landlord before siging a lease. 

August 22, 2012 01:59 PM
Rainmaker
411,963
Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR
Top Listing Broker
BROKER of Green Realty Properties® - 954-667-7253

Alexandra, yes there's a lot of shady business going on. All you have to do is look at Craigslist to see all the scams.

Gina, thank you! Yes I remember that too and it was unfortunate. Most of the time they had no clue.

August 23, 2012 10:56 AM
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Rainmaker
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Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR

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