As the number of foreclosures across the nation continues to set records, there is a sub-set of society that is being impacted that most people don’t first think of when they think of foreclosures…
It is becoming more common for someone to have signed a rental agreement with a landlord who at some point during said agreement becomes delinquent and allows the property to go into foreclosure. What kinds of rights do you have if you are a renter in this situation?
Under a new federal law that took effect May 20, the bank generally would have to honor the lease of bona-fide tenants.
One of the exceptions to the new law is that if the bank sells the home to a buyer who will use the home as a primary residence, the bank can then furnish a 90-day notice of eviction to the tenants.
In regard to your liability as the landlord, if your tenants are evicted, you can be held liable for your tenants’ monetary damages, such as higher rent and moving expenses, due to the early termination of their lease.
Who says all the smart people live in Silicon Valley?
Ok, so there are plenty of people with over-sized brains in Silicon Valley… but the first solution that I have seen to attack this problem was actually developed by a local company right here in the (Southeast) Valley.
At LemonLandlord.com you can actually monitor whether or not your landlord is in foreclosure. From what I understand, not only did the idea get grown here right in the Valley, but the back-end technical work was done by the Tech-Wonk-Super-Stars at Integrum which is one of the founding/anchor companies of the phenomenon known as Gangplank.
If you are renting a property in today’s market, I don’t see how it doesn’t make sense to keep an eye on your landlord.
Just in case.
About the Author: Justin McHood is a mortgage broker with VanDyk Mortgage Corporation. You can find him at Arizona Mortgage Team, on the Zillow’s Mortgages Unzipped Blog, and at most East Valley Friday Nights gatherings. He’s the one in the blue shirt.