Archive for October, 2012

There are estimates that up to 40% of homes which have been foreclosed upon in the US are actually homes which renters lived in and have a rental lease signed and in place. In many of these situations, the landlord is desperate and embarrassed and does not tell his renters about the foreclosure proceed that affects the rental property they are living in until the very last minute, so renters have little time to find somewhere else to live.

It is beneficial to review the old foreclosure and eviction system in order to fully comprehend the new law. Traditionally, rental leases or contracts stay in place when a property is sold and the new buyer must honor the rental lease. Foreclosure cases were excluded from this guideline. When a rental property was foreclosed upon, the new buyer had the right to terminate the rental lease and deliver an eviction notice if it was required to remove a renter.

The new law sets forth that rental lease contracts are still in effect after a foreclosure sale if an investor buys the property, but not for someone who intends it to be his home, with some exceptions. If the property was purchased to be used as a home and the buyer wants to live in the property, the buyer has the option to serve the renter with an eviction notice, but he must provide them with 90 days advance notice.

Existing rental lease contracts also persist after the foreclosure sale if the rental lease was signed prior to the origination of the foreclosing loan, as in the case if a lease was signed three years earlier, but the loan was only originated one year earlier.

The 90 day eviction guideline also has exceptions and allows certain situations wherein the new homeowner who bought the property at a foreclosure auction does not have to provide the renters with 90 days notice. This is only true if the renter meets all three of the following:

1. Neither the renter nor his spouse, parents, children ever owned the property.
2. The rental lease is an arms-length transaction.
3. The rent payment listed in the rental lease is fair market rent value, with the exception if it is government-subsidized.

These exceptions were created to prevent what is called “sweetheart deals” wherein renters try to gain a few months of free living without fear of eviction by cheating the system.

This new law opens the door to a wave of lawsuits against landlords, where renters try to make a quick buck and accuse their landlords of breach of contract. It is the landlord’s duty to stay informed of the risk and exposure to lawsuits such as these so that they can prepare ahead of time should they find themselves in a position where renters are looking to take advantage of the landlord. Both renters and landlords should be well informed on the provisions of the new bill so they can be prepared in case of a foreclosure.

There is no way to definitively determine if the new law will cause foreclosure prices to decrease, as buyers are reluctant to buy if there is a possibility of having to go through a potentially lengthy eviction procedure before they can move into or otherwise appropriate the property they have just bought.

Have you ever had a dispute with your landlord? If so, if you had know your renter’s legal rights beforehand, some of your problems would have been alleviated. Let’s look at some of your lawful and legal rights. These rights could be of help both to you and your landlord. Don’t assume your landlord knows all the laws and is never wrong. This article will help educate you on what you can expect as a renter.

1. Applying for an Apartment

The government says that you have the right to apply for an apartment without being discriminated against because of your race, gender, color, religion, age, nationality, physical or mental disability or family status. Another renter’s right is to know why your application was rejected, if you are denied housing.

2. Signing a Lease

WARNING: Make sure you read your lease carefully, especially the fine print. It would be a good idea to have your attorney review the lease. Signing the lease without reading it completely might cause you to unintentionally forfeit some of your renter’s rights, such as requesting the landlord pay for apartment repairs.

3. Maintaining Your Privacy

Renter’s legal rights include the right to privacy in your own home. In most states, unless in case of emergency, a landlord should give you at least a 24 hour notice before coming into your apartment.

4. Requesting Repairs

Your apartment must be in livable condition. Heat, water and electricity must be provided and the unit should be free of any safety hazards. If your apartment is in disrepair, you have the right to withhold part of your rent, make the repairs yourself and bill the landlord, report it to a building inspector or moving out without the penalty of violating your lease.

5. Getting Sued by Your Landlord

If you are sued, you have all of the following rights:

* The right to receive proper notice in a timely manner

* The right to make amends (pay the overdue rent, fix the lease violation)

* The right to appeal the lawsuit

6. Getting Evicted

There are three types of eviction notices.

1. A Pay Rent or Quit Notice gives you 3 to 5 days to either pay your overdue rent or move out of your apartment.

2. A Cure or Quit Notice may be given to you if you are in violation of your lease (such as illegally owning a pet or causing frequent noise violations). This type of eviction notice gives you a set amount of time to either fix your bad behavior or move out.

3. The third type of notice is an Unconditional Quit Notice. This type of eviction letter simply orders you to leave. It gives you no chance to redeem yourself. This type of notice is usually reserved for a particularly bad offense such as making repeated lease violations, causing serious property damage or conducting illegal activity in your apartment.

7. Receiving Your Security Deposit

The best way to ensure you receive 100 percent of your security deposit back after you move out is to do an initial walk-through when you first move into the apartment. Document any damages you find such as carpet stains, broken appliances or streaks on the walls. It is also a good idea to take photographs of the damages so that you can prove they existed before you moved in.