Evict Tenant in Pre-Foreclosure?

[purenergy]

We are in negotiations with the Lender on a house where we have a Tenant on a 2-year lease.

She has wanted out of the lease, but we, for many reasons, were reluctant to break the lease.

Now, as of Sept. 2008, she has failed to pay the rent. We sent a "courtesy" late notice and just yesterday had a 3-Day Notice to Pay rent or Quit served. Meanwhile, we did not realize that the Bank had sent a notice (I think per the new CA law) informing her of the intended Sale Date, at the end of the month. I called the Lender Monday and today and was told both times that the sale date will be postponed as long as we are "in review," which we currently are (ASC).

The Tenant has been extremely hostile with us, posing many threats, etc. At this point, she is impossible to speak with because she hollers and screams so much. We sent one e-mail to her, calmly explaining the fact that we are, in fact, still the legal owners; she is still obligated to her Lease Agreement with us, etc. I also even let her know that IF the house actually forecloses (which could take months and that we are pro actively pursuing retention of the property), that by law she would be entitled to stay for another 60 days (CA). But that is only IF she is still in the house. If she breaches the current contract (which she has) we are entitled to evict her.

My husband is 'done' with this woman and her antics and wants her out regardless of the outcome with the Lender. (She came by our home, made numerous calls, left numerous messages, cursing, etc., and even harassed our 20-year-old son who was visiting and had no clue who this person interrogating him on the phone was.)

I am pretty confident about all of this and our current legal rights. However, before we go through with the UL (eviction) process, I wanted to double-check to see if anyone here has heard of negative repercussions when pursuing such an action when in the pre-foreclosure process. Again, we are actively pursuing a work out plan with the lender. I know it may not work out and we may end up losing the property, but until that time, I am assuming we retain all rights of ownership/landlord.

Thanks for any feedback or information!

[Dan Bailey]

Pure energy,
I think you would need to discuss this with a lawyer in your area that is familiar with lanlord/renters rights.

But as far as Karma goes.....I wouldn't be in a hurry to rent it out again until you are sure of retaining the house.

[purenergy]

Oh! We are definitely not going to rent it out again at this point in time! We had never, of course, intended for this to happen; we signed the lease with her over a year ago.

Thanks for the feedback.

[Bella]

I am sure you are within your rights as a landlord...

Sounds like you already have the eviction process started anyways...

But her harassment would not be something I would want to put up with as a landlord.

Well, I would ask yourself how much $$ you are out and if you think you could collect from her, as well as is the time involved worth it?

Is there a security deposit she paid upfront to cover the lost rent?

Also, remember she may need your reference to rent elsewhere...

[purenergy]

It's not about collecting from her at this point. We could possibly sell the property -- either a short sale or possibly enough to cover the 1st but not the second (who has offered us 8% on the balance payoff). Anyhow, having her OUT would make it easier to sell the property.

We knew that if the house actually foreclosed, we would be in BREACH of the Landlord/Tenant Lease. But if she failed to pay the rent or breached the contract in any other way, it would be on her. Now she has done that, essentially -- broken the Landlord /Tenant relationship by not paying the rent.

She is trying now to threaten with charges of 'rent skimming.' I think she is way off here. I looked up the code. We have owned the house since 2005 and made all mortgage payments on time up until 3/08 when we fell behind, etc. (she moved in late Aug 07). Also, her rent payment does not even cover the total amount of the 1st house payment-- about $600 short each month, not to mention the 2nd. It seems that the 'rent skimming' law is intended for those who KNOWINGLY and WILLINGLY begin a Tenant/Landlord relationship when the house is ALREADY in foreclosure. Our NOD on this property did not arrive until 6/08.

Again, if anyone has more info on this, I'd appreciate it. Yes, I know, lawyers are best in this situation, but I like to do as much homework as possible!

[pattona]

I think you are well within your rights. But if I were in your shoes I would have the paperwork demonstrating that you were making payments in the amount of her rent towards property's liability (e.g. payments on the 1st, taxes, insurance, whatever) in the event she tries to challenge the UD on the basis of rent skimming.

My guess is that she is just scared and blowing smoke but I wouldn't mess around. Get an atty that specializes in UDs and get going. She may clean up her act once the atty sends his/her Pay rent or Quit but unless you really need her I'd get rid of her. If you do lose the property through foreclosure, she might go after you for a breach.

Good luck to you.

[faith]

As Judge Judy always says, you have to go to court to start the eviction process. Document everything she's doing, keep the copy of emails, voice mail, etc. Eviction is a long time process and if you plan to sell your house, you better do it now and act fast.

I think it's wrong of the lender to inform her of the pending foreclosure. But if you did not inform your tenants of the pending foreclosure, and if she is paying on time, you can be sued. That is why she is angry with you. It happened to my daughter and her friends. They were paying their rent on time of almost a year, 1 month before the lease expired, the Sheriff knocked on their door and gave them 1 day to move out. They were all furious and so am I. We have helped them moved out of their belongings, and some of the furnitures, clothings, appliances like Refrigerator, and food they all gave it away. So I can understand the anger of your tenant.

She already know that the house is in foreclosure, that means she knows you have missed payments, so will not pay you either. I think it's best that you get her out of the house and never mind of the payments that she didn't make. Just tell her that she does'nt have to pay the last rent, just get out of the house in a nice way anyway.

Good luck and take care.


Faith

[faith]

Homewners that has rental property that is in foreclosure or it goes into foreclosure, you need to notify your tenants. Allow them the opportunity to make the decision to stay there and pay you rent until they have to move out, or the option to either not rent it at all or to move out with their security deposit so they are not having to move their family in a rush.

The County has stopped issuing vouchers to Section 8 tenants for single family homes due to the rate of foreclosures, and if they are in a foreclosed property and get evicted, they are at risk of losing their voucher.

Homeowners must know that a vacant house sells faster than a home with tenants. There are so many houses out there for sale/rent right now, your rented house is not going to sell as fast if the tenants don't allow people to see it or worse, make it look and smell awful when potential owners come through. You the owner do not have the right once you sign a lease to compel them to show the house, unless you have a seperate rider they have agreed to before hand. Tenants have the right to quiet enjoyment of their property while they are in a lease. So be aware that you are not going to sell your home and it might just end up in foreclosure before you get it sold and that foreclosure will be on your credit, not the tenants for 7 years!

Evictions for renters are handled by strict contract law standards and the tenant often has more rights than the landlord. In many states, tenants can sue their landlord for breach of contract, possibly harassment and receive many times their monthly rent if they win the lawsuit. Some cities make it extremely difficult to evict tenants for almost any reason. This is not the case with foreclosure evictions because the former homeowners are not tenants, they have become trespassers. Well-meaning people often tell foreclosure victims about experiences they know about where tenant/landlord law was involved. Again, this is not the situation where foreclosures are involved.

Foreclosure evictions are handled slightly differently in most cities so it is important that you contact the court issuing the eviction notice to determine what to expect. The person who serves the eviction notice, or posts it on the front door usually is not the same person who will enforce the eviction. The eviction will be enforced by a representative of the court, often a county sheriff or policeman. Occasionally, the person giving the notice will tell you that you "actually" have an extra 24 hours, BUT DON'T expect or plan on having this extra time, rather plan on being completely moved out before the actual deadline.


I hope this helps


Faith

[djdavisla]

hello......... great thoughts here
Well, I had a payment plan wit Saxton documented with names, but nothinng in writing. on the 10th of march 2009. on the 19th they filed a notice of default, I called and they stated that yes, i did have a payment plan and the amount I was supposed to send, but since it had reached 90days, they filed default notice. so my one tenant totally freaked out, they have been there 3 years, I am a great landlord, and i can understand their concern. so I advised i would keep them completely notified. their lease runs out anyway in 3mths and any foreclosure would take that or more. but they have now told the other two tenants wrong information so now everyone wants to move out at once, and that would create a hardship for me, I have owned the property for over 20yrs so have no plans to let it go, i am working with the lender .but if the tenants dont pay , i will need to start evictions, any suggestions? the lender states i just need to provide aprox $10,000 by end of mth which i can do, but it will be that much harder if then tenants do not pay.

[pattona]

I would contact each tenant and explain the situation. Are you in CA? If so they actually have closer to 7 months of occupancy before they have to move between the 90 NOD, 3 weeks of advertising of the foreclosure sale and the new requirement that a tenant be given 60 days by the new owner of a foreclosed property.

What kind of term is left on their lease? If there's term, remind them that they need to fulfill their obligation with you.

You probably want to consult with an attorney who specializes in LL-tenant law if they continue to insist on moving due to the NOD.

[purenergy]

Hello,
If you have a good relationship with Tenant, FIRST, build on that! We did NOT have good relationship w/Tenant as she wanted out of lease BEFORE getting wind of our financial difficulties.

Even though she, too, "freaked out," when we gave 3-day Notice to Pay or Quit. I tried to send her a reasonable e-mail communication outlining her rights, etc., but she would not listen and wanted to play hard ball.

So we went through with eviction. She maliciously withheld possession even though it was clear she had moved out. (She held the keys, even though we tried to get them back, etc.) She held keys until UD court date, then gave them back. Well, in CA, you are then "dropped" from the UD calendar. So a couple months later, she tried to sue us in Small Claims. We re-opened UD on the "long cause" calendar. We won in both cases.

Now, we are trying to collect for our attorney fees/court costs -- about $1500.00.

So, again, if your Tenants have ANY good feeling left for you at all, try to reason with them. DO send a letter, outlining everything that you know, including their legal rights to remain in the home in a "worst case scenario," (an actual foreclosure). I would definitely lean on the fact that you have owned property for 20 years, etc., and that you have no intention of losing it.

Do be clear, however, in your letter, that if Tenants refuse/fail to pay the rent, that you WILL pursue YOUR legal rights in terms of 3-day Notice/UD.

You can't be much more honest than that. I do understand a Tenant being upset, etc., but if they are reasonable folks, you should be able to get through to them. If there are multiple names on the lease, send copies to each person.

I'd be very interested to see how this plays out, so please keep us posted.

Technically, we still OWN the property we went to Court on. I've had Trustee sale date postponed a number of times since Sept. 2008; next Sale Date is in a couple of weeks. We tried to short sale 2x and had Lender approval but Buyers dropped out. We are now going to try to modify and get another Tenant; or just let it foreclose.

[djdavisla]

Thank you everyone, yes, i did not try to hide it from my tenants the rents are high and i have professionals, but one tenant is an attorney and i swore i would never ever rent to attorny again cause they can do all their legal work themselves. they all seemed ok but now my newest tenant from a few months back has started being nasty, its like my other tenants poison the others. so, i sent websites ect. showing their position and also that they must pay rent as I am still the legal owner. initially i sent an email through my assoc, that i would possibly consider letting them break the lease, but have decided this would be stupid, as i need as much $$ as possible to get the mtg contribution for the modification. so since the leases are still valid, i will need to hold them to the contract, i do not care even if they give the rent directly to my lender or do cashiers checks but I cannot have them all move. Question. is an email, not signed by me a contract to let them out of lease? they signed my email and put it in my mailbox and then tried to have an attorney get me to sign the emails but i refused and told them no deal was completed, also cause they tried to change terms

[purenergy]

I am not an attorney. In order to combat their claim on the e-mail, I would send a SIGNED letter re-iterating that you are NOT rescinding the lease in any way, shape or form. If you can afford to, I would immediately get some legal advice.

Or, you could contact your local "fair housing" authority. Ours puts out some great free info. They will also answer lots of questions over the phone for free. They have both Landlord and Tenant legal info.

Also, check the fine print of the Lease. Maybe you stipulated that any "addendums" or "changes" would have to be in writing and signed by both parties?

Sounds like you will have to go the "hard" route and just stick to the lease, which is what we did. Be careful. When we finally got to court about 6 months later, the Tenant BLATANTLY lied in Court and even produced a fake document. It through me for a loop, but we still won.

[djdavisla]

Pure energy, thank you so much for your help, i will do all that you have mentioned, i get so "wanting to help" and not hide anything, that i am sometimes shocked when they use the information you give them against you, i was going to suggest they even do cashiers checks directly to lender, but figured i better ask attorny before making that suggestion. thank you again

[bluemoon]

Hi folks,
I have been trying to sell rental house for 6 months, tenant wanted to buy so I agreed to let stay in house while they tried, couldn't do it. Finally got them out, with letting security deposit go towards last months rent. Don't do that! House was the filthiest I have ever seen in my 15 yrs of landlord. No wonder house didn't sell. I have only 300.00 left of deposit and I used that up first 2 days and still have flith to clean up. House would probably have sold had it been empty. Get your renters out if you are trying to sell! These people always acted concerned, but probably intended to leave this mess. I had toured home when first up for sale but never noticed the damage, this took a long time get so bad. Protect your self first. Now I have price just enough to cover loan, trying to work loan mod with IndyMac at same time. If they won't lower payment I will have to short sale, but mean time home is almost beautiful again. Hope I can save it for my kids.

[markmc2000]

Originally Posted by purenergy

Hello,
If you have a good relationship with Tenant, FIRST, build on that! We did NOT have good relationship w/Tenant as she wanted out of lease BEFORE getting wind of our financial difficulties.

I thought you said she had a two year lease? aren't you being hypocrytical by expecting her to honor her side and stay and honor a lease, when in fact you are breaking the lease early through foreclosure?????????

[djdavisla]

I just wanted to check backin and thank everyone for their help. My tenants ended up "bonding" getting a pretty sleazy attorney who sent me emails and letters telling me that I was not to go near the property even for showings. I had never threatened my tenants. we some angry emails but they used every excuse to not let me show the properties. I advised them that was bad advice as I was trying to show the units so i could get new tenants and then give them back deposits. nope . they said call the police. new tenants do not like to be shown a new property with police escort. strange, finally both tenants moved out, and their sleazy attorney has filed suit against me... for harrassment. its just crazy stuff. I now have two vacant apts , thousands , I will fight it, and I believe win, we will see..........but thanks for all the advice

[purenergy]

For the record, marc mk2000, we STILL OWN the house and it has been 9 months since she moved out. She would only have about 3 more months on the lease. As I told the tenant, these things can go on w/ a lender for months & months. Had we been collecting rent all that time, we would have been in a much better position to negotiate with the Lender. Still trying . . .

[djdavisla]

also "pure energy, thanks for your advice......good luck with your situation. its strange, often times people see the landlord as the bad guy, i Have had three tenants just bail on their leases.. I tried to work withh them, but they just bailed, the other two got a very sleazy attorney who told me. you do not need to show your properties, just wait till they leave, your are ordered to stay away from the property...ha, my property. I told each tenant this guy was giving very bad advice. My attorney even read the letters and said,this guy is dangerous. I mean how was I to "mitigate damages to my tenants deposit if they would not let me show the units...... anyway, they both moved out, both of the wives said that it would be too "tramatizing"for them to have showings. I said that was such a weak argument, playing upon their "helpless female" to not have showings, I said that is like johnny cochran using the race card, its not fair to females who want equality;. we will see what happens in court. so silly