Landlord-tenant hell: take the money and run

i did a short sale in two family house in medford ,i owed 454.000 dollars ,i sold the house for 290.000 dollars,the bank accepted the offer with satisfation,but i have to pay the insurance 300 dollars every month starting in september for 30 years.i would like to have your opinion thanh you for your co-operation.

our landlord asked for an "advance" last winter [March's rent on Feb 10th], we responded with an "uh...no." and that was the end of it. totally weird, but so is he. maybe he was going to foxwoods for the weekend. we're still here, so i think the house isn't in any danger.

If you are renting, it is never a bad idea to go to http://www.masslandrecords.com/malr/index.htm and look up your property and your landlord to see if there are any foreclosure notices on him or the property... forewarned is forearmed.

Back in the late 1990s when vacancy rates were at rock-bottom in the Boston area, my two roommates and I were moving out of an apartment in a large complex. The complex had recently changed hands, and the management wanted to implement several upgrades between tenants. The problem was that there was no time between tenants in our case; our unit was rented with a start date the day after our lease expired.

That didn't deter the owners from renovating our unit - with us still in it. Without giving us any notice, they began sending various people to install new bathroom tile, a new kitchen floor, and new kitchen appliances, all beginning about two weeks before our lease was up. For the last week of our lease, the stove was sitting in the middle of the kitchen, the refrigerator was in the hallway (fortunately, we did persuade them to leave it plugged in), and various people would show up whenever they pleased - it was a constant parade of people coming in and out. They left our door unlocked at least twice. It really could have been handled a lot better.

My landlord was officially foreclosed on January 7th of this year. Yet he still cashed my check for January. Add that to my last month's rent and deposit and he stole over $2,100 from me. I've gone to small claims court and won a judgment against him however he's filed for bankrupcty. All told he had 3 properties foreclosed on that he owned. This is despite the fact that he owns two businesses in West Newton. So he has plenty of income and got caught playing the interest rate game. The other real casualty of the situation is me as I'll probably never see any of the money that he owes me.

Hi Rona,
Thanks for the post. I have seen both sides of the bad tenants and bad landlords. As another pointed out, it is a good idea to look up the properties' records at the registry of deeds. I have also heard of third parties posing to be landlords of vacant foreclosures and collect rents for properties they don't own. A simple check to see who owns it can help ferret out these scams.

On the tenant side, I have seen tenants destroy units in a single year, causing tens of thousands in damage that would take ten years of wear and tear to happen normally.

I feel that the state laws, while called tenant friendly, are actually anti-tenant and anti-landlord. Because the laws are so tilted towards tenants, landlords illegally discriminate against section-8, familial status etc... Where, if it would be easier to remove a problem tenant, landlords would be more willing to take a chance on a tenant. But instead, landlords are looking for the perfect tenant with impeccable credit, no income assistance and solid work history. This leaves people who are down on their luck to rent sub-standard housing in crime ridden areas. I see it all the time, it's not fair and nothing is being done to correct it.

I believe that with the current housing crisis there are landlords out there taking the situation to their advantage on their tenants. I am in a current lease that is over in August (Halleluiah!) At the beginning of my lease I gave my first and security and my landlord claimed that the security never cleared the bank. I have gotten documentation that it cleared but for months she kept saying it didn't and I needed to issue her the money again in cash or she will be in foreclosure. Foreclosure?This did not make any sense to me because she said she owned the home for 12 years. She did not get any money but the rent on the first of the following month.
We recenlty had plumbing problems and she gave me an altered copy of the bill (I called and verified how much the costs were and it was $150 less than what was written on the copy. I guess she is looking for a little extra to write off on her taxes) and she asked me to take care of the bill if this happens again in the future(Ha!). She also asked me to re-paint the apartment before I move out (Totally against the law for landlords to request upon tenants)She is on disability with no physical illness (goes out everyday and walks fine to me, probably could even do a sedentary job). She lives with her ederly mom(Probably gets SSI) and has one adult child with a child living there unemployed (child is in daycare why isn't she at work? I guess night clubbing is a job now a days)and a teenager (in school, no argument). Obviously they are depending on the rental income to live but that is not my problem. My security is going towards the last months rent (whether she likes it or not) because I know she does not have the cash to fork back over. Landlord F for Finanacially incompetent.

Jojo - that's smart.

As a former landlord, I have to say Dina is exactly right - our professors used to lecture us in law school on laws like Massachusetts tenant law- classic case of the law of unintended consequences.

Massachusetts law favors the tenant in an extreme fashion. As a result, as a landlord you are crazy if you rent to any but the most gold plated tenants - job, references, credit history, and interview.

So tenants who are less than perfect get no housing, as they aren't worth the risk - a bad tenant can take a year and 20,000 to get out easily. And supply of rental housing is limited, thus prices go up. Despite that, landlords make very little money in Massachusetts, which is why there is so little rental housing here compared to most cities. I lost money on rent every year, though more than made up for it on capital appreciation. But you take capital appreciation out and whats the point?

Its such a classic case that even Paul Krugman, who is FAR from right wing, decries these sorts of things as designed to hurt the people they theoretically help.

I never had any tenant problems, because I vetted the tenants to the nth degree.

I am actually interested in buying a three family to rent out and gain some income myself...but after reading these comments I have alot to think about...ethics on my end as well as the tenent. I totally agree with references and credit checks. It is important to know your chance of whether or not you are guaranteed an income. I also think landlords need to remember...things happen...people loose there jobs...so it is important to make sure that you are able to pay your mortgage if your tenant was to get up in disappear.....but to tenants it's also your responsible to know whether you can afford to live in the place to.

I practiced real estate in Cambridge for six years. I specialized in rentals while I was learning sales management at the top rental office in Cambridge. I was at the top of my field. Someone in this situation has options and opportunities.

In the case of a private sale of a mulit unit house or building the purchaser is legally bound by whatever lease agreement the seller signed. This rule might or might not apply to banks as well and that is a question that should be addressed to an attorney. It is likely that it applies in the same or a similar fashion. Also, in the case of a private sale a tenant is supposed to get first right of refusal. Meaning that; if the property is about to be offered on the open market for 699,000.00 then the tenants should have the option of purchasing at that rate prior to the property being marketed. In a foreclosure situation banks take a loss in various ways. One way is by auctioning it off and typically selling significantly below market value. Another is by trying to get fair market value on the open market in the exact same way that a private seller would. In the second scenario they incur brokerage fees and they have to pay for the maintenance of the property as well. The latter is a huge hassle for them as well as a financial loss. Maintaining large amounts of residential property is not something that is routine for banks. They are poorly prepared and they don't like doing it.

Someone in this situation has options and even an opportunity if they want to take it. First it makes sense to involve ones own attorney prior to speaking with a bank representative and defiantly prior to signing anything or even making any verbal agreements. It makes sense to ask an attorney if the bank is bound by the lease agreement that the owner signed. If that is the case then tenants may either refuse to vacate prior to the end of their lease or ask the bank to reimburse them for their coasts associated with moving as well as their inconvenience. It is best to have an attorney negotiate that.

In the unlikely event that that is not the case or if the tenant is in an at will agreement anyway and wants to stay longer then they might be able to negotiate that directly with the bank by offering to continue to pay rent, and by offering to assist with basic maintenance by turning water faucets on in freezing weather, shoveling their own steps and sidewalk, maintaining their own lawn, and providing maintenance people and or contractors with access to the unit when necessary. It is imperative that they promise to and actually keep their unit in presentable condition and provide easy access for it to be shown to potential buyers. Yes, this would be a big hassle but so is moving. Your attorney might ask for a reasonable rent reduction as well.

The potential opportunity is to purchase the property from either the owner prior to foreclosure or from the bank after words. If the property owner approaches a tenant with this challenge or the tenant becomes aware of it then the tenant has the option of tactfully offering to purchase at below market value. The tenant should certainly not pay an amount over what they have already agreed to or seem opportunistic. It would make sense to express an appropriate amount of compassion and concern for the owner’s situation. Then politely suggest that they might have friends or relatives interested in purchasing or could plausibly be interested in that themselves. If the owner becomes agitated then simply apologize and explain that you were only trying to help. You are, because they are better off selling at below market than being foreclosed. They will calm down and are likely to approach you politely again later.

At that point it makes sense to have three reputable agents who are independent of each other offer their opinion of fair market value. This is usually a free service. If the owner is capable of selling for significantly below market value or if the bank will approve a short sale then this is an excellent opportunity for yourself or someone else. Be aware that the agents are likely to try to list the property. Remind the owner of the soft market and average marketing time, tactfully! You are telling the truth and the agent has a financial interest in listing the property and trying to sell it. However, if they fail to sell it in time then they have not damaged themselves financially and the owner has been foreclosed.

If it is actually a financial opportunity then act on it quickly. Remember that you have the option of involving a friend or relative at fifty percent. That is common in investment properties and can be worthwhile. If you cannot take advantage of the opportunity yourself then try to find a friend, colleague or relative who can. Good karma comes around and you probably won't have to move!

If neither of these options are plausible or suit you then make sure that you maintenance the property well and allow the owner and or their agent easy access to show your unit to potential buyers. They are in trouble and this is the golden rule. Moreover, you might have a new landlord who likes you and allows you to stay for as many years as you like at a fair rate.

If the property is foreclosed anyway then it makes a lot of sense to try to take advantage of that opportunity. It is important to have an attorney or real estate agent negotiating on your behalf. There are pros and cons to both but what is important are the negotiation skills. The bank will be willing to sell below market but it is important that you begin negotiation prior to their listing with an agent. It is actually an excellent opportunity for yourself or someone at your church, a college buddy, one of your colleagues, someone in your social group, a relative, a friend or a member of your skiing club, knitting club, writers group, gym etc. Then you probably don't have to move and if you have involved yourself financially then you have likely made a profit. -Engel

Talk about unintended consequences: How about rent control? The mayor of Cambridge lived for pennies on the dollar, while low rents led to housing stock so decrepit the rats were filing lawsuits.

Perhaps in the next billion-dollar industry giveaway (I hear high tech is next), the state could find a few pennies for more courts that could intelligently decide cases before all the parties involved die of old age. That might be of use to good landlords and good tenants alike.

By the way, I wonder how many posters on this thread have contacted their state legislators to demand better protection for tenants in foreclosure?

Good lord, Engel. You practiced real estate in Cambridge for 6 years? Then you should know that all rights of tenants under a lease terminate upon foreclosure. A tenant usually won't know a thing until they get an eviction notice. There's nothing to "negotiate."

to ros in comment 9,i own a triple decker and the truth is that only my tenant in the second floor pays in time,the rest always have an excuse like i lost my rent,i had to buy food,some of the even moved in the middle of night even behind three months in rent.If you take them to court,it is a waste of time,because they think the landlord
is a cash hungry ogre.The tenants pay peanuts compared to what the lanlord pays eg.taxes,insurance,water,maintenance and the mortgage.I give an advice,you dont need the headaches,buy a single family.My house is for sale right now,and I will never buy a multi family again.

Problem in Virginia... Opportunistic Tenant (family member) has forced homeowner into foreclosure proceedings. Tenant is a real estate agent and knows ins and outs... she put lease in her name and a "church" name, but only signed church name. She hasn't paid rent for some time now, and says she will not pay a dime and to quit asking. Said their dead mother told her to go that route! Thought is that she is attempting to cash out after foreclosure or possibly attempt to buy the house once it goes up for auction. The homeowners are good, trusting people who have been through a lot and do not need this assault on their lives. Does anyone have any info that can help? They have sought initial legal advice, and have presented a pay or quit, but foreclosure is drawing near...

I just found out my landlord is 12,000 dollars behind on her mortgage payments what happens when our apartment gets a notice of default?what happens to all of us tenants in all three units?

Hi Rona,My landlord has a notice of default on these apartment units I live in kern county Tehachapi,california 93561.What do I as a tenant do?dO i AS A TENANT HAVE RIGHTS AND WHAT ARE THEY DO YOU HAVE A PHONE NUMBER IN WHICH I CAN CONTACT?thank you would you get back to me as soon as possible I am very worried I have a family.thanks