One word. Economy. What does that word mean to you? A few years back, I would have probably given you the normal 'text book' definition but today it has an entirely different meaning.

¹econ·o·my

1. A mess

Anyone who is tuned in to what is going on in our country would probably agree that our economy is a mess right now. There is so much going on with bailouts, unemployment, foreclosures...who wouldn't have high anxiety in a time like this? So many Americans are in a state of panic for fear of losing their jobs and their homes. If you turn on the news every morning it seems as if there is always something new occurring. The unemployment and foreclosure rate is  steadily increasing. It probably makes you nervous, it makes me nervous, it makes America nervous.

It's been a almost a year since I have crossed over to the leasing of homes. I do not know first hand how difficult the Real Estate industry is  as of now because I am not involved in it. After listening to the news and hear say about the market continuing to drop, I wonder how many of my Real Estate friends are making it. Even though the buying and selling has slowed down, people are still leasing homes. I am only assuming this is because they do not meet the requirements to get a loan and can not afford it at this time. It seems as though many people who are wanting to buy a home are being forced to rent. I also assume that the leasing business has increased due to homeowners also losing their homes due to foreclosures. Every one is running around trying to find a place to call home.

Even though the leasing business is busy, the owners of the rental property are keeping their fingers crossed. Many owners have put their home up for purchase and/or lease. I know of several owners that have a "For Sale" sign up and a leasing ad in the paper. They are taking whatever they can get at this point.  Remember when they were handing out loans like it was candy? Basically, if you had a pulse you could get a loan. Many people saw this as an opportunity to buy rental property. This was usually with a "adjusted interest rate". Most owners were counting on rising rents and low interest rates to cover their mortgage payments.  The downward dip of house values and with the rise of their mortgage interest rates, owners are scraping to cover their monthly cost.

The way the economy is today, you would think that renting a home would be the safest bet. You can easily find a place for you and your family to live without the worries of the economy but this isn't exactly the case. You have to remember that the person you are renting from (ex. landlord, owner) is not exempt from the "Foreclosure" bug that is going around. Many renters are finding themselves in sticky situations, losing their rental homes to foreclosures. If you are a renter, it's important that you know what is possible in a time like this, what your rights are and how to take action. Here are a few questions that you might need the answers to:

1.The house that I am renting is being foreclosed on, does that terminate my lease?

Most likely, yes. When a rental home is in foreclosure, the renters lease is usually terminated. I've read that in most states if the mortgage was recorded before the lease was signed, the foreclosure will basically wipe out the lease.

2. If I can stay, who will be my new landlord?

You might want to think twice before staying in a home/apartment/condo that has been foreclosed. Most of the time the bank or the mortgage holder becomes the new owner. If this is the case, a servicing company might be paid to handle the property. You probably shouldn't expect to get the kind of attention you did from your previous landlord. Most of these companies are more interested in financial matters and the last thing on their mind is the leak in your bathroom.

If you are renting a home it's very important that you keep up-to-date about what is going on. I've actually had prospective tenants call me looking for a place to rent. They explain to me that the property they were renting went into foreclosure and they had no idea. They continued to pay the rent but it went straight into the landlords pocket and they were having difficult getting a response to maintenance needs. The landlord could have cared less because he knew he was losing the home. These renters were taken advantage of.

3. If I have to move out, how long do I have?

This really depends on the new owner. Sometimes you get lucky and you don't have to move asap. Some renters have at least thirty days to find a new place and move.Other renters might not be so fortunate. When a new owner takes over a property, they want the tenants out yesterday. They do whatever is legally possible, not giving the tenant more than three days to make arrangements.

4. What if I refuse to leave the property I am renting?

In my opinion, this is probably not a good idea. You probably won't have a leg to stand on. You might be face-to-face with an eviction lawsuit without any sort of legal defense. Wouldn't you rather just find another place to live than having to battle an eviction on your record? I just don't think it's worth it.

5. Why do new owners evict previous tenants? Wouldn't they want the money to pay their mortgage?

In theory, it makes sense but most of the time it isn't the case. Most new owners see their new property as investments. They assume that properties that are vacant are more likely to sell than those that are occupied. Some of these owners don't realize that it would probably be more beneficial to keep the previous tenants rather than evicting everyone and trying to sell it.

6. What are my rights? Do I have any?

Some people have tried to take their case to court, pleading the judge to let them stay in their home. Again, when there is a mortgage before a lease there is really nothing that can be done.

7. Why should I be the one to cover all of my moving expenses? The foreclosure wasn't my fault.

You're right, indeed. It wasn't your fault that the home you were renting went into foreclosure. As far as collecting cash for your expenses, there might be somewhat of a loop hole. When you entered into a lease with your landlord, it's usually for a year. There is a duty known as "covenant of quiet enjoyment". This basically states that if a landlord defaults on a mortgage, which causes the termination of a lease, it violates this convenant. You can then sue for the damages it caused.

Most people that bring their cases to the courts sue for application fees, moving and apartment-searching costs. They also can sue for the difference between the new rent and the rent under the old lease. You have to realize what you are going up against, though. If your landlord is dealing with foreclosure, he might not have the money in his pocket to give you.

8. You said that some renters have no idea what is going on. How can I find out about rental foreclosures?

I found a really neat website where you can search a database for free to find out if your rental property is in foreclosure or not. It's called Rental Foreclosures and it's free! You can't beat that!

If you are renting a property and you think you are going to lose your home due to foreclosure, you are not alone. The best thing you can do is to stay informed. Visit the Rental Foreclosures website to learn if your home is at risk. This way you can start to look for another place to live. If you are looking for rental property right now, please visit our website at www.primepropla.com. We are always getting new homes on the market available for lease. In the mean time, keep your head up.