In the past, it was the owner’s responsibility to ensure that potential tenants interested in renting their property were well qualified to pay the rent. Now, however, it seems that tenants should be equally careful.
Four University of Miami students were notified that their rented house would be foreclosed upon because of their owner’s inability to pay the mortgage.
“We had been paying all of the rent on time,” said Eric Golnick, a senior who was living in the single family home located near Miami Art Central. “It was really strange because we were getting letters that were advertisements to stop foreclosure now.”
Immediately after receiving the foreclosure advertisements, the tenants decided to confront the owner about whether the house was under foreclosure. The owner responded that everything was fine and that the mortgage payments were being made.
On Dec. 24, 2008, a foreclosure official came to their house to serve them their foreclosure. By being served the foreclosure, they were officially notified of their situation and given documentation about the actions the bank will be pursuing.
Golnick and his roommates left this house and began renting at another. The landowner of the second house, located near the intersection of Miller and Red roads, directly told them that the house was not in danger of foreclosure.
It was only a few months before real estate agents arrived at their house to show the property to clients that were interested in purchasing their second foreclosed home.
“I encourage the students to contact the Department of Residence Halls right away,” said Gilbert Arias, assistant vice president for Student Affairs. “Our advisor can assist them to finding residence off-campus as soon as possible.”
Golnick contacted the Department of Residence Halls about their foreclosure; however, he said that they were not helpful in helping them find new affordable housing. They were told to use the website at www.miami.edu/housing to find new housing and visit other Web pages that would be helpful to them.
The Web site offers specific listings in nearby houses and condominiums, an off-campus housing handbook that helps familiarize students with the Miami area and other resources that aid students with rental housing.
“We’ve never seen this kind of situation,” Arias said. “But obviously the market has never been this bad. Even if it means that they have been asked to vacate the house in mid-semester, we can still assist them.”
Enrique Ferrer, a partner at the Law Offices of Ferrer and Associates, is a real estate and foreclosure defense attorney that graduated from the University of Miami School of Law in 2003.
“A foreclosure is a lawsuit in which the bank sues you for two things: the title to the property, and for the money you owe,” Ferrer said. “If you’re living in the house with three people, now everyone becomes a defendant in the lawsuit.”
Ferrer said that if you receive a foreclosure notice, you must contact the owner immediately. The owner would be able to work something out with the bank or file for bankruptcy, he said.
“You, as a tenant, should file a response with the court explaining that you live in the property, that you rent it, and that you have a lease,” Ferrer said. “And if you have a lease, attach a copy of the lease – you will be receiving notices of anything happening in the foreclosure and you’ll know what’s going on in the case.”
He suggests that if you are entering into a lease with such a tumultuous financial and housing market, you should consult an attorney to help you negotiate a better contract.
“[Ideally], if I get served because the owner cant pay, the lease would be terminated immediately, I would want the security deposit back and now I would also get damages,” he said. “I would want damages because I was forced to move out and incurred all these costs that I otherwise wouldn’t have.”
Golnick and his roommates are still living in the second house because the foreclosure proceedings were temporarily halted due to having an outstanding contract to sell the house.
Eric says that he has friends who have had to move into three houses because the owners were unable to pay, but they could not be reached.