A prospective tenant calls me today telling me that she found me on my blog at ActiveRain. Of couse, I always get delighted when consumers find me through my blogs. She tells me that she is a tenant living in a foreclosed home and needed my advice on 'something'.

Eager to listen to her story, I curiously asked her which blog she was calling me on. "One of the ones that you wrote about foreclosures", she said. "Oh great! How may I help you? Yes!

So here is the scenario: Ms. Tenant  received a foreclosure package from the bank, hand delivered, of course, that the house that she is living in is in foreclosure. That was back in November of '08. Apparently, the owner stopped paying for their mortgage back in March '08. Once Ms. Tenant received the foreclosure package, she then decided to stop paying rent. Why pay, the owner is in default with the bank, right?

Right and wrong! Just because the owner/landlord is in default with their mortgage does not mean that tenant stops paying rent. Whether the tenant chooses to stay in the property after being notified that the property is in the process of being foreclosed on, here are some steps that the tenant might want to take:

It is true that you don't have to pay one more dime of rent, at least not to the owner. In fact, there are many conflicting stories on this debate and it varies from state to state, county to county, and city to city, and day to day news and laws that are ever changing. I have heard many horror stories of tenants being evicted by the Sheriff's department and there is nothing that tenant/s can do once you get BSO knocking on your door telling you "You must vacate the premises immediately".

This may be due to the landlord a) has filed an eviction notice on you because you decided to stop paying rent (after all, it is still considered their property), or b) the property is at that time, a bank owned property which means, get out, for once! Bank owns the propety, not the 'previous owner' or your 'previous landlord'. Banks have every right to change the locks without being concerned about you. Harsh, but true.

Now, to avoid conflicts with your landlord, and to stay in the home in the meantime the property is in foreclosure process, you can:

Tell the owner that you want to continue paying the rent if it's absolutely necessary, (you might just have a few long months to stay in the property in the meantime you get ready to look for another place to live), but you will make the payments directly to the bank, or do yourself a favor, give yourself some peace of mind, don't stress out of the situation and find yourself a temporary place to stay or find yourself another place to live.

For many families, moving out of a foreclosure/bank owned property can be a very devasting event, it's happening in everywhere, you are not alone, you won't be the first and you won't be the last. In Ms. Tenants case, if you have the resources to move then JUST DO IT!

Ms. Tenant was confused but I assured her that by leaving the premises and avoiding confrontations from a landlord that is threatening to change the locks and putting her stuff on the street without properly and legally processing the eviction is not only illegal from the owner but why argue the point? It is what it is.

We are going out to see some properties tomorrow - Ms. Tenant could not find better relief in my comforting words when I told her not to stress herself out, it is just not worth it! It's also not fair to go through these situations but sometimes confronting the situation is better than fighting it properly!

Owner/tenant scenarios like these vary and are unique in each and every case. I am not a lawyer but can guide you in finding a better situation by finding you another home. Have a similar story? 

Foreclosed Rental Program Falls Short ~FAR News & Events February 11, 2009

Protection For Renters ~NYT Editorial March 17, 2009