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Renters Also Hurt by Foreclosures

Malibu real estate agent Gracee Arthur found a Notice of Default on the door of her rental. She believes her landlord stopped paying the mortgage before she moved in.

Foreclosure notices on homes have become a sign of the rough economic times. But it is not just homeowners who are suffering. Renters also are hurt when their landlords are unable to pay the mortgage. And for them, they often never saw it coming.

AOL Real Estate writer Stefanos Chen wrote about this issue in a recent article titled "When Renters Get Snarled in Foreclosure's Web." The article included a story about Malibu real estate agent Gracee Arthur, who in June found a Notice of Default on the door of a two-bedroom apartment she was renting. Arthur, who wrote about the experience in her blog, believes the landlord stopped paying the mortgage before she moved in at the end of April.

Chen writes:

She immediately confronted the landlord about the notice. He told her not to tell the other tenants, Arthur says. But not only did she share the news with the others, she also contacted a real estate attorney about possibly filing suit for landlord fraud. And because federal law does not guarantee a refund on renters' security deposits, she recommended to tenants that they work out a deal in which their deposits be used toward their last two months of rent. 

Arthur was advised to file a complaint against the landlord with the California Department of Real Estate.

Michael Schaffer November 15, 2011 at 09:43 PM
It is extremely important for renters to check into the landlord and property before signing a lease. I run a service, CheckYourLandlord.com, gives renters the ability to easily find out exactly who the owner of record of a property is, find out what mortgage and other liens are on the property and if there are any defaults, and also learn about past bankruptcies and civil and criminal judgments against the landlord. Too many renters don't think it is important to research the landlord, getting into a property that is in the foreclosure process, or may end up there, is a bad situation that can be avoided.

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