Anybody have to tell their renters the bad news?

[Amy26]

I just got back from my condo telling my renters the bad news. I feel like a total schlub. Originally, they had a 2 year lease. When I moved back to the US, I was able to get them to agree to move out in January 2010 so that I could move in there again. So, they were already prepared to move out a little early.

So, my husband and I got over there and told them the good/bad news. You'd think after telling someone they get to live rent free for at least 6 months they would be a little more thrilled. They seemed kinda depressed and upset by it and when I said they could save up a lot of money in the mean time they were like well ...yea...sorta...maybe... Then they didn't quite get the concept of not getting their security deposit back if I let them live there rent free... how hard is that to understand? July 1st comes around... you don't pay me... poof you got your deposit back.

I totally understand that it puts them in an annoying situation but I just didn't get a warm and fuzzy feeling and now I feel awful. Like I'm evil. I had to like sit there and explain my situation and that I had nothing left I could do. And then the husband was like "can't you apply for the Obama thing?" and I said no...because you live here... lol. And then they said "oh so its because of us?" and I wasn't like trying to make them feel bad or anything... even if I did qualify for the obama thing I'd still have to do bankruptcy.

So, then to make things worse he was sympathizing with me and telling me he was so sorry I had to go through this and telling me it would be alright...the dude made me cry! It seemed like he cared more about me than his family.

So... I mean I guess it went well. They didn't yell or get mad or tell me they were gonna sue me. They were ok with it but it just left me with this terrible feeling like I was crushing their dream of renter's heaven. They don't make a lot of money but I can't see why it would be hard for them to find a new place...specially if they have 3-6 months to do it.

Anyways sorry I'm venting again... I seem to be doing it a lot on here. Can anybody relate to my story? I feel like a deadbeat landlord.

[OregonMom]

I am a renter and I would love it if my landlord told I got to liver rent free for six months!!

[doingpoorly]

You are not evil. They are just trying to process it all probably. Some people are creatures of habit and change doesn't come easily for them. Even thought they are getting free rent, all they see is having to move even earlier than they thought. They are comfortable where they are. I think in time after they have processed it they will realize that they won't be losing money and will see this as an opportunity. After all, didn't you feel all icky about the idea of going bk and now you see that it really is an opportunity to start over.

[Amy26]

Yes... that is true... you are wise Yoda.

[Amy26]

I am a renter and I would love it if my landlord told I got to liver rent free for six months!!

I give you their email address... you tell them that.

[relief13035]

We told our renter and they were thrilled. They haven't paid since Sept. and are still there.

[dingdong]

I rented a home that was in FC when I rented it( I didn't know it when I signed the rental agreement, he hadn't paid his mortgage for 6 months before I moved in) , the LL completely lied to me, filed BK, lied some more. I had to print his petition off of PACER and take the notice of trustee sale over to his house, then the A hole tried to evict me, and I was paying freakin' rent!

I think you telling them was very noble, and very correct and you absolutely did the right thing, especially offering them free rent, when technically you could charge for it.

Don't feel bad, you did exactly what you should have done, and you were upfront. I would have been very thankful if my former LL did what you did.

Your tenants may very likely get a cash for keys offer, that will probably be more than their deposit. Tell them they may have a BPO agent coming by to offer some money to move and to not be afraid if they do, it is a good thing.

Don't feel bad, it is what it is and you did the right thing.

Good on ya!

[JRScott]

You did the right thing

Honesty is always the best policy

[jribe]

Once you file BK and are foreclosing on the house; i was under the impression that you cannot collect rent? Just keep the security deposit...
I just wanted to clarify that with DingDong..

Anyway- Amy i wouldn't feel bad. At least they are understanding. I think they are probably thinking, crap now we have to find a new place- get a secruity deposit and then the cost of moving (and the hassle). I'm moving this week- after being here for 3 years- and i hate it! It's so expensive for packing materials, the UHual, gas (nearly $3/gal here) etc. That's probably why they weren't "excited".

There's definitly good and bad things about it. Yes they may get to live there for a few months free.. But it could be faster than normal. And they may just think they'll have to come up with a bunch of money for moving and a new place.

I rented a home that was in FC when I rented it( I didn't know it when I signed the rental agreement, he hadn't paid his mortgage for 6 months before I moved in) , the LL completely lied to me, filed BK, lied some more. I had to print his petition off of PACER and take the notice of trustee sale over to his house, then the A hole tried to evict me, and I was paying freakin' rent!

I think you telling them was very noble, and very correct and you absolutely did the right thing, especially offering them free rent, when technically you could charge for it.

Don't feel bad, you did exactly what you should have done, and you were upfront. I would have been very thankful if my former LL did what you did.

Your tenants may very likely get a cash for keys offer, that will probably be more than their deposit. Tell them they may have a BPO agent coming by to offer some money to move and to not be afraid if they do, it is a good thing.

Don't feel bad, it is what it is and you did the right thing.

Good on ya!

[aces67]

They are probably just shocked right now. I'm sure they will see the benefits once they think it through.

[dingdong]

Once you file BK and are foreclosing on the house; i was under the impression that you cannot collect rent? Just keep the security deposit...
I just wanted to clarify that with DingDong..

Anyway- Amy i wouldn't feel bad. At least they are understanding. I think they are probably thinking, crap now we have to find a new place- get a secruity deposit and then the cost of moving (and the hassle). I'm moving this week- after being here for 3 years- and i hate it! It's so expensive for packing materials, the UHual, gas (nearly $3/gal here) etc. That's probably why they weren't "excited".

There's definitly good and bad things about it. Yes they may get to live there for a few months free.. But it could be faster than normal. And they may just think they'll have to come up with a bunch of money for moving and a new place.

Actually, in most states, unless new laws have been passed, as long as you are the legal owner (hold title), you can collect rent.

once title passes (bank forecloses, deed changes) then you have no legal right to collect rent.

Some states have rent skimming laws, but they are fairly narrowly defined ( bought the property within 12 months of not paying mortgage and collected rent).

Some states have reacted to the FC crisis by enacting new legislation to protect tenants, but for the most part, until the bank actually forecloses, you can collect rent. Not saying it is ethical or right, but it can legally be done.

Once that property has reverted to the bank or another buyer at auction, then no rent may be collected.

[kenshirley]

Hey, at least you told them.
I understand that a lot of housing that was up for sale and found it's way into foreclosure was rented out by the original owners.
Down in the Phoenix area many owners would rent you a nice home very reasonable when they could not sell it.
They would collect the first and last months rent and a security deposit and then just leave. They had not in many cases been making payments on the property involved and the poor renter's came home to find a foreclosure notice on the door with orders to get out.
The money they paid was long gone in most cases.
We were afraid to rent in the Phoenix area where our kids live with all the problems tenants were having due to the economy and lack of jobs right now.
Here I spent some time verifying just who owned this property and their intentions with it in the future before I gave anybody any money.
So far so good.

[veryclose]

They should thank their lucky stars they have you for a landlord. Many people don't find out about the property until it's in foreclosure. You are giving them plenty of notice, the free rent....they really can't ask for more. They seem weird to me!

They should be able to put aside what they would've paid for rent as a deposit on a new place. You have done everything correctly and have given them far more information than many people get.

[jribe]

Thanks for the clarification. It must depend on what state you're in. Anyway, good to know!
Thanks

Actually, in most states, unless new laws have been passed, as long as you are the legal owner (hold title), you can collect rent.

once title passes (bank forecloses, deed changes) then you have no legal right to collect rent.

Some states have rent skimming laws, but they are fairly narrowly defined ( bought the property within 12 months of not paying mortgage and collected rent).

Some states have reacted to the FC crisis by enacting new legislation to protect tenants, but for the most part, until the bank actually forecloses, you can collect rent. Not saying it is ethical or right, but it can legally be done.

Once that property has reverted to the bank or another buyer at auction, then no rent may be collected.

[NeedNewStart]

I agree you did the right thing. I'm in the same situation. I told my property manager that I couldn't afford to keep up the mortgage. He told the renters they could stay or go early. I'm currently trying for a short-sale and the tenants (college kids) just decided to end the lease early because they didn't want to keep the house clean for showings. Now they're out, simple as that. I guess they were ready to move on anyway.

I was really stressed about it, but it worked out fine for everyone.