What About Renters?

Real Estate Agent with Long and Foster

I spoke with a single parent today.  They had a copy of their lease and all their cancelled checks for the past three years.  The checks all cleared the bank shortly after the first of the month (they paid their rent on time).  I saw the copies.  Unfortunately, their landlord did not pay the mortgage.  This family found out about it because their parking sticker was revoked by the HOA.

It is sad, but they have no rights.  The foreclosure cancels their lease and they will be out on the street soon.  This is an all too common scenario. The media is talking about helping the homeowners who got in over their heads but have heard little about the renters who paid their rent.  The renters paid it on time and had dishonest landlords take their money and run.  

I do not think homeowners should be able to walk away from a home just because they are upside down.  If they can't meet the payments that is another matter but to just walk away due to negative equity is wrong. It is irresponsible and dishonest.








Comments (4)

Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes
Debbie do you know anything about a renters right to continue paying if their landlord is in foreclosure? Do they have to continue to pay their rent?
Apr 01, 2008 02:36 PM
Linda Lipscomb
Linda Lipscomb RE/MAX Lexington Henderson County TN - Lexington, TN
731-695-1118, Lexington TN Homes


Working a similar situation.  It's really sad for the renters.  In my situation, the renters were in a lease purchase agreement with the sellers.  Foreclosure has started.  They have legal rights, but they can't stop the foreclosure.

Apr 01, 2008 02:43 PM
Deborah Saffell
Long and Foster - Ashburn, VA

I can't give legal advice but I can repeat what a lawyer said to me about their situation.  It is my understanding that the renters are supposed to continue paying the rent. The renters are in a horrible quandry.  Do they continue to pay their rent hoping the owner will not continue to rip them off?  Do they try and pay it to the mortgage company directly hoping they won't just turn them out anyway?  Do they hold on to the rent money and use it towards another place to live?

The lawyer I spoke with advised they contact the trustee for the mortgage company to see if they can finish out the lease.  In Virginia, the lease is null and void once foreclosure has taken place.  The mortgage company is under no obligation to honor the lease. 

The renter has the right to sue their landlord for damages but the lawyer said it would be expensive to do so.  Litigation can take a lot of time and energy and it can take a very long time to collect.  It would be nice to see a clause in the standard lease stating that once the foreclosure process has started all rent payments will be made to the trustee and not the "owner".

The laws in each state are different.  Virginia is not very "renter friendly" when it comes to foreclosure. There was an article in the Washington Post in December 2007.  There was a family who found out they had to move when they got a 72-hour eviction notice posted on the door.  The lovely owners had been coming by and taking the foreclosure notices off the door while the renters were at work. 

It takes all kinds.





Apr 01, 2008 03:26 PM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

We invite you back to ActiveRain in 2017.

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  Best to you!

Jun 19, 2017 06:28 PM