What happens to my tenant???

[relief13035]

When real estate was good my husband and I purchased a rental property in Las Vegas that we rent to a casino worker. I am very honest and called her to let her know the situation. I told her to not pay me rent and to save all her money so that when we have to surrender the condo she will have money to get another place. I couldn't live with myself if I continued to take her rent and then made her homeless.

In the meantime, will she be Ok staying in the condo during my filing? Can the HOA harass her since I am not paying my HOA dues?

It's not her fault that I am filing BK, but I feel responsible to protect her. I do have a heart and I am genuinely worried about her. She has always been a good tenant.

[BKOnce]

Very good heart!.. make sure she won't save enough $$ to open a secret poker rooms or run new slot machines in your basement.. or else??.. (just kidding)

[AngelinaCatHub]

When real estate was good my husband and I purchased a rental property in Las Vegas that we rent to a casino worker. I am very honest and called her to let her know the situation. I told her to not pay me rent and to save all her money so that when we have to surrender the condo she will have money to get another place. I couldn't live with myself if I continued to take her rent and then made her homeless.

In the meantime, will she be Ok staying in the condo during my filing? Can the HOA harass her since I am not paying my HOA dues?

It's not her fault that I am filing BK, but I feel responsible to protect her. I do have a heart and I am genuinely worried about her. She has always been a good tenant.

[justbroke]

In the meantime, will she be Ok staying in the condo during my filing? Can the HOA harass her since I am not paying my HOA dues?

She'll be okay, as she's not the owner. Do you have a current lease with her? If the lease is current and active, that protects your renter immensely!!!

More than likely, with an active lease, the Bank will assign the lease to a rental management company. Just don't tell the tenant to tell the Bank's assignee that they "didn't pay for months". That's because most mortgages (deed of trust) have clauses about "assignments of rents"!!! They may try to make her back pay the rent. So, don't get trapped by that.

Most likely, is that she'll continue to rent until they find a buyer for it. This could be awhile, so she should be okay. But she should prepare to start "paying" rent once you file. Once you file, the Bank will move to Assume the Lease(s) and take over the lease (Assignments).

With the way everything is now, I could only speculate that she could live there for months without issue (so long as she pays the assignee or Bank's trustee/management company).

Everything I wrote, won't preclude the Bank, as assignee, from getting a Relief from Automatic Stay, then foreclosing, then issuing a Quite/Vacate notice. I just, personally, can't see that happening quickly. However, and I'll keep beating this to death, she'll need to pay the assignee post-petition. So all post-petition payments should be escrowed or saved so she can pay the right person. Matter of fact, if it's a Chapter 7, the asset will belong to the Trustee and the Trustee would get the payments.

(I rent a property now and the Trustee actually told me that she didn't want to directly receive the rent payments. They were/are coming to me.)

[AngelinaCatHub]

OK, I could not advise you better than "justbroke" has, as he/she has a very wise grip on this far above me.

Now here is my 2 cents: Would your renter wish to purchase? That could help her and you also, I think? Just a thought. 'Hub

[b_girl]

When we filed we had a rent house with tenants. The bank was very interested in them staying and continuing to pay rent. However, the tenants were not comfortable with the arrangement and left. The house is now going back to the bank empty.

[mmenz22779]

I am going to let my tenents have 2 months of free rent then have them vacate the property as it will be forclosed anyway. This way they can save some money and move before things get ugly. I will wait till after cristmas though to tell them.

[b_girl]

Are you filing soon, and is it in the same area as your rent home? Also, do they publish BK filings in the local paper? Be aware that if the answer to both is yes, your renter may discover that you are filing sooner than the date you have in mind.

[domaingamer]

This scenario will play out often over the next year or so as many people with rental properties declare bankruptcy and then decide what and when to tell their tenants. There was a popular case in Seattle where the tenants didn't pay their landlord one month because of a rat problem. The next month the tenant never contacted them, it turned out the landlord was in default, the bank had repossessed the house, but no one is bothering to collect rent. That was 8 months ago and they're still going strong.

[DaisyMae]

Your tenant owes rent regardless.

How do you justify filing bankruptcy, yet not collecting your rents? Isn't a question: 'Does anybody owe you money' on the petition? Your tenant will have to move upon FC regardless of whether she pays her rent. You are entitled to it, you ought to collect and use it in a way that you can exempt when you file BK. This is not the time you feel magnanimous...It's a dog eat dog world, and only going to get worse. You spent a LOT of your money and time to acquire that rental property, this is the least you can do- keep the rents and stop making the payment, to get at least something back for your efforts. In the end your tenant won't respect your graciousness, anyway. Trust me.

[outofluck07]

That all sounds like it makes sense, but unfortunately when calculating past income and future expense, collecting the rent will only hurt you on the means test. I also am letting my tenant stay 2 mo, leaving next month. I don't want the rent, because if it comes into my hands, I have to claim it as income, but if I surrender the property (as I am)I can't claim that mortgage payment as a monthly expense, at least not in Wisconsin. Legally rents are the property of the lender, but I still have to count as income. So not right.

[relief13035]

The world may be a "dog eat dog place" but that doesn't mean that I have to be "of the world". I filed last week, and was current with the mortgage for Sept. and she was current with her Sept. rent. Since I am not paying mortgage from Oct. forward and surrendering the property, I feel it would be wrong to take her money. The way I see it, she is protected during my automatic stay. Then when BK is closed foreclosure procedures would begin right? This will give her time to save money to move.

EVENTUALLY THIS WILL ALL BE OVER - I love that motto! Thanks I needed that.

[justbroke]

OK, I could not advise you better than "justbroke" has, as he/she has a very wise grip on this far above me.

FYI, JustBroke is of the masculine persuasion... LOL.