Foreclosure Mess Victimizes Renters as Well

October 12, 2007 by Lucas Lechuga

A few months ago, I thought about writing this post but I never got around to it. The Wall Street Journal was sitting at my office this afternoon and an article caught my attention: “Mortgage Turmoil Hits Renters As Buildings Go Into Foreclosure”.

The reason why I thought about writing this post a few months ago is because I met someone who faced the very predicament that the Wall Street Journal article discusses. I met a guy who was looking to buy a condo. At the time, he was renting a condo at The Club at Brickell Bay and his lease was going to end within six months. A few weeks after he contacted me, he was notified that the condo was in the foreclosure process. He wasn’t notified, however, as to how much time he had until he needed to vacate. The thought that “today may be the day” entered his mind each day that he rode up the elevator to his apartment.

In the past, I’ve had some clients who offered to pay 12 month’s worth of rent upfront in order to negotiate a better price. I no longer advise this because of the possibility that the landlord will face financial difficulties and go into foreclosure. Renters are required to produce a credit report and background check when becoming a tenant in a condo building. Nowadays, it doesn’t seem so outlandish to me to ask for a credit check from the landlord. I’m not saying that you’ll actually get one but doesn’t it make sense to at least ask for one?

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3 Comments on "Foreclosure Mess Victimizes Renters as Well"


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Anonymous
kim
8 years 11 months ago
Lucas, The “pay-up-front” model still works — at least for six months– you just have to research the lis pendens, and tailor the lease towards the tenant (e.g., include a clause that makes the leasehold contract superior to all successors in interest, assignees, etc.). This way, if it goes through the foreclosure process (and as you know this will take at least six months) you are protected. Also, they have to serve process on the tenants (usu. via “John Doe tenant of 2812, 1200 Brickell Bay Drive…) to let the tenant know about the foreclosure suit hearing. I know —… Read more »
Anonymous
Renter
8 years 11 months ago
I moved into a unit in Brickell in early August and was served with a copy of a foreclosure notice two weeks later. I’m still in the unit but will be moving in about a month. The landlord still owns it, but he’s probably going to lose it to the bank. He’s about 6 months delinquent and never even made the first payment. He owes about $20K to the bank and $3K to the association. As a renter, you’re in a tough spot when this happens. The foreclosure process doesn’t actually constitute default under most leases, so you can’t legally… Read more »
Anonymous
Julie Taylor
8 years 11 months ago

I have been looking for a place to buy in Miami and have looked at several that I found on 321gone.com. It’s a pretty cool site..its has pre-foreclosure and foreclosure homes and condo’s. Its kinda like Ebay.

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