Hi folks. I was on the phone early today speaking with a Legal Process Server, you know, the people that serve foreclosure papers. This server, Tammy, was talking to me about her job and how busy she has been, swamped, was the word she used. According to her she has been spending most of her days delivering papers in Poinciana and Davenport FL.
Poinciana, of course, is my market area and Davenport is an area near Disney World that is predominately short term rental vacation homes. This market has also been hit real hard. With the declining economy, folks are just not spending money on vacation and the owners of these properties, mostly from the UK, are not generating enough income to pay the mortgages.
I would not want Tammy’s job. She said she gets cussed at, screamed at and threatened by homeowners just for doing her job. She also bumps into tenants that are very surprised to hear that even though they have been paying their rent every month, their home is now being foreclosed due to the landlord pocketing the rent instead of making their mortgage payments. This is a HUGE problem in my area.
A friend of mine is the property manager for a large real estate company in Kissimmee and was telling me how she is spending quite a bit of her time relocating tenants due to foreclosures.
I can’t even imagine how pissed I would be to find out I had to move from my home even though I had been honoring my lease. But what can they do? They have no recourse, as lenders do not have to honor leases, once the property is foreclosed. No eviction process is involved. It is my understanding, that once the property is foreclosed on, the tenant has to move. Not only will they have to move but they can kiss their deposit and any advance rents good bye. Ouch!!!!
Here’s an interesting article that will shed some light on what a tenant may be able to do to postpone the inevitable.
So, what can we as REALTORS® do, to protect tenants, if we are working with them? I think the first thing I would do is research the property. If I see the property was bought in 2005 for $250,000, was on the market for 2 years “for sale” and now is being rented for $900.00 a month, I’d be very, very concerned. This property is probably owned by a “flipper” that “flopped”, who is now making a last ditch effort to recoup some money. I believe I would suggest my customer/tenant take a pass on this one.
Maybe we could have the lease worded so the rent is being paid to an escrow company who is making the mortgage payments on the owner’s behalf. It would also make sense to have the security deposit and advance rents paid into escrow as well. Do you have any ideas?
If you’re a tenant, who has just been served, I would contact an Attorney ASAP. This problem is not going to just go away. Be proactive.
OK that’s all I have for you now. Any thoughts?