Check out your future landlord

One of my clients wrote me yesterday:

Hi Rona,

Various foreclosure stories about renters being evicted because their landlords fell behind on the mortgage made me wonder why in my renting life I never asked to see proof that the landlord was current on their mortgage, had a credit check run, or even for that matter proof that they really owned it. Does anyone check these things? Was I just lazy and lucky? If this had been common practice, would it have helped any? Do rental agencies have any liability if the tenant gets evicted? This seems like the real waste and injustice of the foreclosure mess.

I answered:

I covered this topic over a year ago. It is worth mentioning again, since we are at peak rental season. Thanks!

Next weekend, expect bumper-to-bumper U-Hauls throughout rental areas around Boston. The flood continues through September 1st. Most of those who are driving in already have a lease in hand.
Those with poor planning skills are still looking for a place to unload that truck. This entry is for them:

Think of a landlord-tenant interview like you should think of a job interview. You may think you want that job, but you should also be interviewing the boss to make sure you really want it. Some jobs are worse than no job. The same is true of apartments.

Problems run rampant for tenants who rent from landlords who are failing financially. When they are foreclosed upon, your deposits are put in line with all the other creditors. Right, you are not at the top of the list. Community Action Agencies (Federal anti-poverty programs) like Community Action Agency of Somerville are flooded with tenants who have lost their apartments and their deposits due to their landlord’s foreclosure.

So how do you protect yourself? My guess is it won’t fly to ask your prospective landlord for a credit score. Even worse would be to ask for the landlord’s social security number and permission to run your own credit check. So what info is legally available and helpful?

Last year, ChiliPepr suggested you check the Registry of Deeds for signs of trouble. ChiliPepr (and others since then) are dead on.

What you do is this:
Go to the site; look up the property by address. Make sure the person you are talking to really owns it. If you are working with an agent, ask for the landlord’s name. Once you have established that the person who is signing the lease is the person who owns the property, you then want to know that he/she is not in trouble. Look for an “Order of Notice.” There is a long time between the first “Order of Notice” and the “Foreclosure Deed.” In the foreclosure I looked up a minute ago, the “Order of Notice” was recorded in December 2006. The “Foreclosure Deed” was recorded in January 2008.

Good luck. Drive those U-Hauls carefully!

For those of you who have already unloaded, How did you avoid this problem? Did you check? Did you get lucky? Were you unlucky?