tenant law - DD's rental foreclosed on - any advice-long

My DD and 3 others rented a house - many mistakes on their part but here is the rundown:

- no rental agreement (apparently something in writing but haven't seen it)
- paid prorated month (may 9 - 31)
- one month's security deposit
- 3 days after moving in received a "Cash for Keys" notice from real estate company
- landlord claims his ex is causing the trouble
- I looked online and found that there was a trustee notice to foreclose on 5/5/08
- last Friday, 5/23, received 30 Notice to Quite from attorney representing WaMu
- landlord says his ex is hoarding the $ in their Joint account that is to pay the mortgage
- they called landlord who came over to look at the Notice, said it isn't true and told them he'd be by on the 1st to collect the rent !

OK - I am sure the guys is a scum bag - the house is slumsville !

What I am looking for is the options the kids have to right the situation since the scumbag rented to them after he had received notice the lender was foreclosing.

The house showed being purchased this past January 2008 and seems that at that time the EX was removed from the title and no $ has been paid since.

I realize the kids may be able to recoupe the down payment either from the lender or through small claims court but don't know what proof they have other than the cancelled check for the rent and deposit.

My take is do not pay rent, call the attorney and work with them - is there anyway to try to get the scumbag to pay a new deposit toward a new rental?

I know many foreclosures are causing the same exact situation all over the country - just don't know the best way to handle this since it is hard to find rentals and the kids have dogs which makes it harder to find a rental.
 
I am sorry your DD is faced with a scum bag of a Landlord. There is no other way to say it. What concerns me in your post is the fact that there doesn't seem to be a lease. In absence of a lease agreement for a specified time frame, if the rent is paid in monthly intervals in most states it automatically is a month-to-month lease with a 30 day notice time frame.

The landlord is legally bound to deliver the rental for the entire lease term. A landlord who defaults on a mortgage and therefore, causes the loss of lease for the tenant violates the law and the tenant can sue for the damages. However, if your DD doesn't have a written lease for a specified time frame, it will be tough! If she has a written lease she may be able to go after the landlord in small claims court for damages. She can get the cancelled checks through the bank to prove that he endorsed it on the back of the check and deposited in his account. That should be more than sufficient proof. Thank God she paid by check and not cash as many other people do!!

My concern would be, if the guy lets his house go into foreclosure what are the odds of recovering ANY money from him. Small claims court is not expensive and the judgement will stay on the books.

I guess my question is if your DD and her friends rented the property directly from the Landlord, or if there was a real estate agent or property manager involved. If there is a real estate company / agent / property manager who was involved, your DD may have a recourse against the real estate agent/broker. They had to know or should have known that there is a foreclosure on the books.

However, a lot of times, banks like WaMu hire real estate agents to approach the occupant and offer "Cash for Keys" to get the tenant or occupant to move, get the home ready for sale and put it up for sale. I have done a few of those and it is always heartbreaking.

In most cases and most places, tenants will lose their lease upon foreclosure. In most states the rule is that if the mortgage, foreclosure notice was filed or the trustee sale recorded BEFORE the lease was signed, the foreclosure will wipe out the lease. This is called "First in time, first in right. You may want to pull up the Landlord Tenant Act for the state.

Since you have already received a Notice to Quit my suspicion is that the Trustee Sale has already been completed and the bank is the new owner. It sounds like the Trustee Sale was scheduled for 5/5/08, sometimes there are delays, pull up the tax records again and check if the sale has recorded, sometimes there is a delay. Contact the attorney who sent the 30 day notice to verify. But be aware that the attorney is representing the mortgage company and probably won't give you advice that represents your DD best interest.

Normally tenants don't have to move right away. It sounds like the attorney has given your DD 30 days to move. If they refuse to move they may face an eviction lawsuit. She can buy herself some time with an eviction lawsuit, HOWEVER, she won't have a legal defense and will probably get evicted. This eviction will gravely impact her ability to get another rental and I really don't think it is worth it. No law prevents a future landlord from automatically rejecting tenants with evictions on their record, even when those tenants were the innocent victims of a foreclosing bank.

To encourage tenants to leave quickly and save on the court costs associated with an eviction, banks offer tenants a cash payout in exchange for their fast and uncontested departure. In general, whoever is in charge of vacating the house gets a budget that they can negotiate, in most cases they won't give you the highest and best offer upfront, try and negotiate it. Add up the cost for security deposit, applications fees, gas mileage or cost for finding a new place, other fees, difference between new, possibly higher rent and this rent for 12 months and tack on a little bit. MAKE SURE YOU GET EVERYTHING IN WRITING!!!

As to the rent, as unfair as it sounds, unless the property is in unhabitable condition and it can be documented, the tenant still has to pay rent, to the Landlord, as long as he is still the rightful owner, otherwise HE can file an eviction which will again effect your DD rental history. So much about tentant protection. However, based on the documents your DD has received from the attorney I would say it is more likely than not that there is already a new owner, probably the bank.

Try and find out first thing on Tuesday what the status is, call the attorney, call the real estate company. There are many non-profit organizations who give free legal advice to tenants in these situations. I can only share what I know about my area and the banks that I have worked with on those kinds of instances. I think it is pretty similar in most areas but there may be exceptions.

I am so sorry this happened to your DD!! What a scumbag! If he actually rented the place out after foreclosure it amounts to fraud!!!! He certainly would be liable for damages. However, I think your DD best bet right now is to get a decent deal on the Cash for Keys, maybe negotiate additional time and start looking for a new house right away.
 
Carola - you have given me the advice that I figured would be the answers. Unfortunately they "rented" from the "owner of record" and not a property mgmt company or RE agent. I have suggested this time to possible go through a property mgmt because naturally they would make sure they get their cut too !

No lease signed - they had told me they were going to get one but the landlord has been leading them on this entire 3 weeks.

I have given them basically all the advice you just presented except I haven't gotten copies of the recorded documentation. Here we can look up the doc #'s but have to go pay for copies at the County Recorder's office.

Definitely worth spending a few bucks and a little time if they can even get a judgement against the scumbag.

He seems to have quite a few properties and I'm not sure how many are presently being foreclosed upon, but seemed like a few of them look OK so a judgement may be worth it.

Thanks for the advice - wasn't sure about a few things.

Questions: When looking for the Tenant law, is it a huge doc or easy to find what I am looking for? Am in CA and if it is anything like employment law (I'm an HR Mgr.) it will be huge.
 
Boy, is it hard to find something in CA. In Arizona the Arizona Association of Realtors has it online for the consumer to download, the AZ Supreme Court has it to download. In CA it's like finding a needle in a haystack :) This is what I found, it is not the exact letter of the law but it should be helpful - it's 120 pages for crying out loud. I guess you knew what was coming :)

http://www.dca.ca.gov/publications/landlordbook/catenant.pdf

Really you have to pay for it for the docs? That sucks! In my county we can download everything, makes it much easier. Do you have a real estate agent who can help you, maybe their program gives them access to the required docs. Here, the public has access to what is recorded but local MLS program also gives me access to additional data like phone numbers, trustee address, etc.

You may want to check the legal assistance on this website

http://www.courtinfo.ca.gov/selfhelp/other/lglsvcpgm.htm

Scumbag, he probably thought he found easy prey with a a couple of young kids. I hope you make him pay!!!

If you need anything feel free to PM me, I can give you my phone number.

Good luck
 
Maybe you or your daughter should call a magistrate or an attorney in the area and go for a free consultation? One thing that I have found is that in legal matters, it's best to get your advice from the experts.
 
Great websites Carola - I will peruse throught the tenant law and definitely "run around" the legal assistance site. I had found a few other places but had not seen these. Thanks so much ! :7

I actually told my DD that I figured he knew he found some kids who wouldn't understand what was happening. The hard part for me is that DD is not the person who actually has the contact with Mr. Scum and the girl who has been the lead tenant isn't doing much of anything. She will just be moving into her BF's mom's home so doesn't matter so much to her. My DD is only 19 and the youngest of the 4 of them. She is 30 miles from me and it would be hard for her to move back here and drive to work for a $10/hr job with gas over $4/gal now. Her lovely father, my EX, won't let her back into his house.

We'll figure something out. I so appreciate your help and if I need further assistance I will definitely PM you. You're the best !;)

Reese - I agree about getting some legal advice. I had made many suggestions and am trying to let the kids handle it as much as possible, but time to step in and help my DD so things don't fall too far into a hole. Crummy lesson to learn, but I'm sure she will be smarter in choosing roomies and in knowing how to protect herself better next time.

Thanks again ladies !
 
RE: tenant law - DD's rental foreclosed on - any advice...

Thank you Kara - the more info to read the better !

Lots of homework tomorrow - DD doesn't have a computer to use so it's all me.

I just knew some of you out there would have some good ideas/advice.

Just love this board and it's diversity - especially when one needs help. :7
 

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