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Can I collect rent while my house is in default?

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  • Can I collect rent while my house is in default?

    I am in default on a home I think Im going to just let foreclose. Can I collect rent, and pocket it, while I am in the foreclosure process?

  • #2
    Re: Can I collect rent while my house is in default?

    I am in California

    Comment


    • #3
      Re: Can I collect rent while my house is in default?

      Long as you are still the "legal" owner you may still collect rent

      Comment


      • #4
        Re: Can I collect rent while my house is in default?

        Originally posted by noone123 View Post
        I am in default on a home I think Im going to just let foreclose. Can I collect rent, and pocket it, while I am in the foreclosure process?
        the only way you can collect rent is if you are stillhte legal owner and not in foreclosure status!
        if you collect rent on a foreclosure you can be sued for damages by the family who lives there!
        when you g o into foreclosure you must let yo7ur residents know that so htat they may prepare to move and not waste time..im sure they have a life that does not rule around yours!

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        • #5
          Re: Can I collect rent while my house is in default?

          I am a tenant who lives in a condo that is headed towards foreclosure...I think it is horrible that my landlord is still collecting rent from me when they are not even making payments on the condo. Why should they get to pocket my rent payments when I will just get evicted in the end?

          So my question is...what is considered foreclosure status? Can I do anything? A letter arrived stating that the house was in default, and if payments were not made, then the bank would foreclose on the house. Do I still have to continue to pay my landlord rent when they have not paid their mortgage payments over the past year? The letter stated that they had not paid over $18,000 in mortgage payments.

          Please help!

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          • #6
            Re: Can I collect rent while my house is in default?

            The payment status of the owner does not remove your need to pay rent.

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            • #7
              Re: Can I collect rent while my house is in default?

              If you are going to continue to collect rent, why not use the money to pay the bank what you owe instead of letting it go to foreclosure?

              Are you aware of the repercussions of having a foreclosure? Why would anyone simply "let" their property go to foreclosure?

              In addition, many states require a landlord to have a Certificate of Occupancy. If you do not have this, you are renting illegally and cannot enforce payment from your tenant. You especially cannot keep the tenant's security deposit.

              To July 18th's question: How did you come to be in possession of your landlord's mail? Surely a foreclosure notice does not go to the tenants. It goes to the mortgagee.

              Again, if your landlord is legal, and can, in fact, rent out to tenants, his foreclosure status has nothing to do with your agreement to pay your rent on time. One does not cancel out the other.

              Comment


              • #8
                Re: Can I collect rent while my house is in default?

                In the State of California, a landlord who collects any amount of rent from a tenant with the intention of not paying their mortgage obligation to a lender first, is in violation of the civil code that listed below... it is defined as skimming! Your Landlord may go to jail for intentionally defrauding his mortgage lender.

                California Civil Code 890. (a) (1) "Rent skimming" means using revenue received from the
                rental of a parcel of residential real property at any time during
                the first year period after acquiring that property without first
                applying the revenue or an equivalent amount to the payments due on
                all mortgages and deeds of trust encumbering that property.

                This does not clarify the tenants rights regarding paying rent under these circumstances. i would think the landlord has the right to collect, but, if he is intentionally defrauding his lender in the process... you would need to ask a lawyer.

                Comment


                • #9
                  Re: Can I collect rent while my house is in default?

                  Well the Rent Skimming Law works only on the fact that the person purchased the home within a 1 Year time frame, so this probably rules out most people but I would write a letter to the Landlord letting them know you know the home is in the foreclosure process and that you have NOT BEEN NOTIFIED IN GOOD FAITH by the Landlord that the home is in foreclosure so could make reasonable moving arrangements that take time and money and he/she has failed to give you sufficient notice of the pending foreclosure that opens up the potential for you and your family to experience DAMAGES (stress of moving, son/daughter missing school, having to enroll them into a new school, unexpected moving expenses, higher rent, etc.). Then I would demand that the landlord provide WRITTEN PROOF that they are trying to save the home (which they most likely are not since they are scumbags that never were honest with you in good faith notifying you that the home is going into foreclosure) and if they in fact trying to save the home then sure they are entitled to the rent and if not, I would like to see them try to win an eviction case in court for a home that they are going to lose anyways and could get sued by the bank for keeping the rents they have been pocketing so far! No scumbag is going to open that can of worms once they know that you're not a push over and will fight it in court to the end!

                  Comment


                  • #10
                    Re: Can I collect rent while my house is in default?

                    I'm in the same situation, landlord is in default. He failed to tell us he was doing this. He said that he had to go into default to get the new loan mod that the president signed last year. My cousin is in real estate and said that it is against the law to collect rent while in default. We discovered this default because he has been getting all his real estate mail sent to our address, making it look like he still lives here. He even asked if he could get the utilities put in his name. He claims to be fixing the problem but we don't believe him, so we are holding back the rent to save to move out. (We live in CA)
                    We just got 12 envelopes of mail today from his lender for him, I'm tired of getting his mail.

                    Comment


                    • #11
                      Re: Can I collect rent while my house is in default?

                      One can only hold rent under certain conditions. You might talk to a Lawyer before your sued

                      Comment


                      • #12
                        Re: Can I collect rent while my house is in default?

                        I don't know where some of you are getting the idea that a landlord cannot collect rent while in default of their mortgage. They can.

                        To Unregistered 8:59p.m. You cannot withhold the rent for that reason. Withhold rent and face eviction.

                        Comment


                        • #13
                          Re: Can I collect rent while my house is in default?

                          My mom died in February.

                          She had a condo in California worth $350K and a mortgage with a $500K payoff amount.

                          My sister/the-executor-of-the-estate has decided to just let the bank have it as there is no cash in the estate and she and I together don't have enough income to make the $2,500-per-month mortgage payments.

                          However, she has rented it out to a tenant for $1,600 per month (after informing the tenant that the property will eventually go into foreclosure).

                          She wants to start sending me half of the rent money she is collecting.

                          Is it legal for her to do this? If I accept half of the rent money, am I going to get myself in trouble?

                          Comment


                          • #14
                            Re: Can I collect rent while my house is in default?

                            As long as the landlord is still the legal owner, meaning the foreclosure has not been completed, they can still collect rent. Withholding your rent will result in eviction. What makes you think you are entitled to stay in a property for free? Foreclosure is simply transfer of ownership. Just as if they were selling the property to someone else, you would pay rent to the original owner until the sale is COMPLETE, then you would make arrangements with the new owner to either pay them the rent or move. If you break your lease by not paying, you can get evicted & lose your security deposit. Also, once a foreclosure is complete and bank has taken back possession, they will normally contact the tenant to make arrangements for the tenant to move (assuming the bank does not want to keep the lease in place - most don't). They will usually give you 90 days AND they will pay you to move out, sometimes up to a few thousand dollars. This is called "cash for keys".

                            You have two options when your landlord is going into foreclosure:

                            1. Continue paying rent as normal, wait for new owner (Bank) to contact you & decide whether to stay or move at that point
                            2. Move out. If you don't want to pay rent you need to move out. If you have a lease in place you'll be breaking your lease and will most likely lose your security deposit. It's possible that the owner **may** cancel your lease to be nice, but probably not.

                            Comment


                            • #15
                              Re: Can I collect rent while my house is in default?

                              Originally posted by sunlover View Post
                              One can only hold rent under certain conditions. You might talk to a Lawyer before your sued
                              Hello I am currently renting a house that we just found out that is in default, I live in Calif. I understand the landlord has the right to collect rent but what if there is repairs that need to be done like the plumbing we have no bathroom plumbing and the landlord refuses to fix it it will cost him 2300.00.

                              What can we do

                              Comment

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