Rental Property advice

[matababe]

FLORIDA

Several questions.. I will attempt to keep is short and sweet.

1. If a lease was negotiated while in default of mortgage (over 90 days), is said lease valid?

2. During a Chapter 7 Bankruptcy, is it required to list names of tenants living in property, paying rent, if it is to be surrendered back to lender?

3. If rental payments are being direct deposited into a bank account by tenant, is said bank account required to be reported for bankruptcy?

4. What is the difference between "Means Test Form" and "Current Income of Debtors"?

5. Homestead exemption has been claimed for 2009, however owner was not living in home in 2009.

I'm sure I will come up with more questions. I appreciate any help/advice.

Thank you in advance.

[newbie2]

FLORIDA

Several questions.. I will attempt to keep is short and sweet.

1. If a lease was negotiated while in default of mortgage (over 90 days), is said lease valid?

2. During a Chapter 7 Bankruptcy, is it required to list names of tenants living in property, paying rent, if it is to be surrendered back to lender?

3. If rental payments are being direct deposited into a bank account by tenant, is said bank account required to be reported for bankruptcy?

4. What is the difference between "Means Test Form" and "Current Income of Debtors"?

5. Homestead exemption has been claimed for 2009, however owner was not living in home in 2009.

I'm sure I will come up with more questions. I appreciate any help/advice.

Thank you in advance.

Perhaps others will be able to chime in with answers to your questions, but as far as #3: If the bank account is yours, then yes you have to report it in your bankruptcy filing.

[frogger]

FLORIDA

1. If a lease was negotiated while in default of mortgage (over 90 days), is said lease valid? Yes. You still owned the property. However, if you've done some type of "sweetheart" deal, they will probably choose to fight it.

2. During a Chapter 7 Bankruptcy, is it required to list names of tenants living in property, paying rent, if it is to be surrendered back to lender? No, but you will need to turn over names, leases, and keys when you surrender the property back to the lender.

3. If rental payments are being direct deposited into a bank account by tenant, is said bank account required to be reported for bankruptcy? YES!

4. What is the difference between "Means Test Form" and "Current Income of Debtors"? How much of your debt is business vs. personal?


Thank you in advance.

You're welcome.

[matababe]

You're welcome.

Ok, little more info about me... I just didn't want to be flamed with landlord's responses of "you're obligated to pay no matter what" without seeing all of the factors first lol.

So, we are tenants. It came to my attention, our landlord filed chapter 7. No bigs, stuff happens, I understand. Did some digging, found out that for one, landlord claimed homestead on property she did not reside in. For two, bankruptcy didn't list the account anywhere that we deposit into for rent (yes, I have all receipts), nor the account which "supposedly" has our security deposit.

Now, like I understand, stuff happens.. but when she drew the lease up with us, she was almost 120 days in default on her mortgage. I found this out when I pulled bankruptcy (which is scheduld to be discharged soon). Surely that contract was made under fraudulent terms, no? She knew that the bank could come foreclose on the property at any time.

So here we are, we have about 1/2 year left on the lease. I keep reading about oh the bank will contact you blah blah. Well, I want to know how the bank is going to contact us if no one knows we are even here... sounds to me like she is trying to say she lives here so that there is no evidence of rental income. I'm hoping her attorney didn't advise her to do that...

I asked about means test and income of debtors because I pulled the whole Bankruptcy file and rental income is not showing on the means test form, but it is factored in under current income of debtors. Don't know if that makes a difference or not.

Oh and many people have told me that when she filed, she was no longer authorized to accept rental payments from us. Anyone know about that? I guess we probably pay the trustee or something. But again, if she didnt report the account we deposit into, how is anyone going to know.

Anyway, thank you for any and all advise once again. I'm a bit confused and overwhelmed all at once. Maybe a bit hurt too because she had personal affairs affecting me here at this house and instead of giving them her new address, I just warded them off.

[matababe]

Perhaps others will be able to chime in with answers to your questions, but as far as #3: If the bank account is yours, then yes you have to report it in your bankruptcy filing.

Define "yours" lol. I know she is secondary. If we have a lease with HER, and payments are made to HER then isn't that income going into an account which is required to be reported? Also, what about the account which holds our security deposit? Is that not to be reported also? I'm so confuzzled

[ssmdem]

Oh and many people have told me that when she filed, she was no longer authorized to accept rental payments from us. Anyone know about that? I guess we probably pay the trustee or something. But again, if she didnt report the account we deposit into, how is anyone going to know.

I'm wondering about this aspect now. We are landlords and are hopefully putting off filing long enough that my tenant can finish out her lease, among other reasons to put it off for a few months. I'm paying that mortgage with her rent money and then some - her rent doesn't cover the mortgage. My atty has advised me to stop paying the extra, but I am concerned about the bank starting foreclosure procedures on us and forcing her out, which I don't want to happen. Her lease expires Jan 31st. We're going to have to file AT LEAST by November but was hoping that this would buy us the time. She's already paid the last month's rent, and her deposit amount is the equivalent to December's rent, so I guess that would time it perfectly for us to stop paying. If we do have to file sooner though, you think I'm NOT supposed to accept rent payments anymore? Seems backwards - I can't pay the mortgage without the payments, so that would be forcing me to stop paying the mortgage.

Good luck to you in your situation. We're going to have to be renting when this is all over ourselves as we're having to give up our home, as well as our rental property. I'm worried about renting a place with owners that would be in a bankrupty situation as well. How did you find out? Is there some way that WE can check into our landlords before renting from them?

[matababe]

I'm wondering about this aspect now. We are landlords and are hopefully putting off filing long enough that my tenant can finish out her lease, among other reasons to put it off for a few months. I'm paying that mortgage with her rent money and then some - her rent doesn't cover the mortgage. My atty has advised me to stop paying the extra, but I am concerned about the bank starting foreclosure procedures on us and forcing her out, which I don't want to happen. Her lease expires Jan 31st. We're going to have to file AT LEAST by November but was hoping that this would buy us the time. She's already paid the last month's rent, and her deposit amount is the equivalent to December's rent, so I guess that would time it perfectly for us to stop paying. If we do have to file sooner though, you think I'm NOT supposed to accept rent payments anymore? Seems backwards - I can't pay the mortgage without the payments, so that would be forcing me to stop paying the mortgage.

Good luck to you in your situation. We're going to have to be renting when this is all over ourselves as we're having to give up our home, as well as our rental property. I'm worried about renting a place with owners that would be in a bankrupty situation as well. How did you find out? Is there some way that WE can check into our landlords before renting from them?

See, I'm not sure...

I do know that the difference between you and her is that you are paying your mortgage, she is not and was not before she entered into a lease agreement. Oh, and you better believe I'm going to do a credit check if I go through another owner. I understand stuff happens, but if I see a 90 day on that mortgage that is recent, you had better believe I'm hightailing it the other way lol. I've have been in a situation with a home myself. Difference is, I didn't decide to scam someone by renting it out, knowing full well that I was going to give up on it. Seems to be the norm nowadays and it's very disheartening when you are trying to start over.

Good luck on your situation.

[ssmdem]

But how do you do a credit check on someone without their consent? I know I run a credit check on prospective tenants, but I have to have a copy of their driver's license and their signed consent in order to run the check. You think a landlord would voluntarily do this - seems odd - don't even know how I'd ask. :o) I guess I COULD check the county records though to see if foreclosure proceedings have started on the property though.

[SMinGA]

Matababe, I don't think you would qualify as a creditor to file an objection or claim in this case, but if it has not yet reached discharge I'd contact the trustee if I were you.

[matababe]

But how do you do a credit check on someone without their consent? I know I run a credit check on prospective tenants, but I have to have a copy of their driver's license and their signed consent in order to run the check. You think a landlord would voluntarily do this - seems odd - don't even know how I'd ask. :o) I guess I COULD check the county records though to see if foreclosure proceedings have started on the property though.

Well, it's only fair right? Lol. I think in this day in age, potential tenants should have some sort of right to do that.

In my case, I was very diligent (so I thought) in my research and what I thought was a stable situation turned out to be not so much stable. I, like you said, checked county records and found nothing out of the ordinary. Tax records were up-to-date of course, because this is escrowed. There was no evidence of financial turmoil.

I still think that we, as renters who are trying to start over, should have some sort of protection, other than a 90 day Obama clause. In my opinion, it will cut down on alot of this crisis that we are in. I could be wrong though.

[ssmdem]

Oh I agree -- just trying to picture how I would have reacted if someone had asked me to do that -- before heading down this road myself. I probably would have told them to hit the road. LOL! Of course, our plan is to begin looking after bankruptcy discharge when we are forced out of this house. So, it will be on our credit report for them to see - so we're going to have to be very upfront with whoever we rent from. Hoping to have 2-3 months rent cash in hand to help plead our case -- I guess us asking wouldn't seem so odd to someone considering our circumstances.

[matababe]

Oh I agree -- just trying to picture how I would have reacted if someone had asked me to do that -- before heading down this road myself. I probably would have told them to hit the road. LOL! Of course, our plan is to begin looking after bankruptcy discharge when we are forced out of this house. So, it will be on our credit report for them to see - so we're going to have to be very upfront with whoever we rent from. Hoping to have 2-3 months rent cash in hand to help plead our case -- I guess us asking wouldn't seem so odd to someone considering our circumstances.

Oh, I'm all for being up front lol. I was so humiliated by my experience and when I had to disclose it when we came to see the house, I started crying. And to think they can watch that and still do what they did just baffles me. But oh well, I suppose I'll just chalk it up as another lesson learned in my big book of life lessons lol.

As of right now, I just want to protect my family and I'm not really sure what to do at this point.

Oh and SMinGA, I am not wanting to make a claim, I'm just wondering what to do next. I'm nervous to contact the trustee because I don't want her to get upset and decide to give us a 3 day notice. Then we'll really be up the creek.

[SMinGA]

I don't think the trustee has any rights to kick you out. But you need to make sure your rights are protected, and if the only evidence that you have a lease is hidden by your so-called landlord, well you might find yourself without any rights.

I think the worst that can happen for you is to have to start making your payments thru the trustee. The automatic stay is in place for now at least so the mortgage company cannot proceed with any foreclosure process.

[travman1974]

the tenants in my rental property had 3 months left on their lease when I defaulted on my mortgage. My attorney advised me to stop collecting the rent if I wasn't paying the mortgage as that could be consider fraud. I notified my tenants about the situation then I stopped collecting the rent and told them that they were welcome to stay until the lease expired, but could move earlier if they needed too. I hoped that the three months free rent would help them with getting into another place.

If you feel that your landord didn't disclose the rental income or accounts on the bankruptcy petition then you could always report that as bankruptcy fraud.

http://www.justice.gov/ust/eo/fraud/

[ssmdem]

My tenant did the exact same thing when she came to see the house. Her husband had walked out on her, her house was about to go into foreclosure, and she was a nervous wreck. I felt so bad for her. At the time, I had no idea this was in our future as well. I feel like an absolute heel now that we're facing it ourselves - but I'm determined to hold up my end of the bargain on her lease. Once we decide 100% this is what we're doing, although we're 99% certain it is, we're going to let her know what's up. She can have the option of breaking the lease and walking now - wouldn't blame her if she did. Or she can stay, and I'll continue paying the mortgage for her. However, once we file and we're no longer paying, I'm just going to give her the option of living there rent free as long as she wants and is able to. If I'm not paying the mortgage, there's no point in her paying the rent. My atty right now just feels because of the lease agreement, it will be best if both parties continue to act as agreed until the filing date - especially considering that we won't be filing for several more months.

We've told enough people about our situation that I'm almost over the humiliation factor at this point. I've found it amazing how many others are in our situation that I had no idea about. So far, no one has been judgmental or condescending in any way.

But you're right, there's no way I could intentionally lease my property out if I knew then I was filing. That's just wrong, and you know what they say about karma! Why don't you start looking around and see if there are any other rentals available that would let you move in? Tell them what's happening and that you're about to be forced out due to foreclosure of the rental property and see how many options you would have. If you find you could relatively easy find somewhere to go, then call the trustee. I'm finding that nothing seems to happen quickly with foreclosures :o) so you've probably got plenty of time before you'd be out anyway. If your lease is up in six months (right?), I'd start checking other options out anyway.