Bank took Rental & landlord wants appliances

[Renter]

We have been renting this home in SW Portland for 4 years now and had a few notices on our door last summer that the house was going into foreclosure. After talking to the landlords, they reassured us that they were negotiating a new loan and not to worry- they would never let the house foreclose.

A few months later we had a call stating that the bank wanted to come re-assess the value of the home and take pictures- which we let them do. They were hoping to get a lower valued estimate as to get a lower loan, I guess.

Then, last Friday, a broker showed up at our door stating that the house had been reclaimed by the bank (Freddie Mac) and that he was sent to rekey the house had it been vacant. He left his card and said the bank would be in touch with us, and we immediately stopped payment on our rent we had payed the day prior which was a prepayment for the month of November. Our lease contract ends Dec 1st.
We had heard nothing from our landlords on any of this matter although we knew, in the back of our minds, it was always a possibility. We discussed the matter over the weekend and then contacted the landlord this past Monday.

He got back to us that evening and confirmed that the bank, indeed, did take possession of the home and that he had tried everything he could to prevent it saying that he didnt even hear about it until 11pm via email that Friday after trying desperately to have an open line of communication with the bank.

We discussed how unfortunate it was- he was very sorry and felt horrible given the fact that we have 6 kids and are expecting our 7th in May. But when discussing our $3000 deposit, he basicly told us that if the bank took time to get back to us and we were living here rent free- why should he return the deposit.

We explained that we would need every resource to move out of the home given this time of year and the size of the home we need to find and that we were actually owed that money- not to mention that we really have no clue if the bank is going to let us stay here rent-free or hold us liable for moveout repairs, if they existed.

He texted my husband today angry because he found out we had stop-payment on rent ($2000) and stated that he wanted to come pick up his refrigerator and new dishwasher they had replaced for us a month ago, this weekend.

Is he allowed to come and remove our appliances from the home before the bank even contacts us and do we owe him rent for November when they took possession of the home the very beginning of November? He technically does not own the home any longer- the foreclosure has already happened. Are we also owed our deposit?

Thanks!

[MSbklawyer]

This reads for all the world like a law school exam question.

[Peeps]

What a horrible situation. I'm so sorry you're stuck in the middle of your landlord's property problems.

If the mortgage the landlord is defaulting on is a FaniMae or FrediMac you may be entitled to moving expenses. You may also be able to negotiate an agreement (on a month to month basis) to stay in the home for a couple of months. I believe it depends on the state you live in. Call FreddieMac to find out what you are entitled to... if there is another bank involved on the front-end, things could get more complicated but you could contact them too for options. Basically, they're your new landlord.

Very sorry to say that in most of the cases I saw, people often lost their deposits AND had to stay current on their rent otherwise they faced legal issues involving breach of contract. Personally, I don't think a breach of contract lawsuit would hold much water (against you) if the landlord makes the place unlivable by removing the refrigerator. Legally I don't know if you can withhold rent when you have exceptionally good reason to believe you may not get your deposit back - but it seems like a reasonable consideration to me. You would probably have a good small claims case to get your deposit back (less any monies you may choose to withhold in the meantime). Lemme just make something clear, though... I'm nuts. Certified. Be sure to get your real legal advice from a lawyer.

[ccsjoe]

Let me see if I understand correctly....House actually sold or reverted back to lender, correct? If so, former owner, aka former landlord has no right to any of the appliances in the home NOR any rent payment. Rent belongs to the owner. There is no grey or in between ground on this one. If this is the case, that the house has actually already been transferred (sold), then ingnore former LL, call the cops if he trespasses.

Read up on PTFA (Protecting Families at Foreclosure Act of 2009), understand what applies to you, then contact the realtor or broker assigned by lender and establish a dialogue. If you have lived there long enough, and the house reverted to lender, you may request a new lease agreement and you may negotiate cash for keys. The house we rented got foreclosed on in late April this year, I ended up doing the latter and got over 4K to relocate (details are posted in a blog posting under my name). Bottom line, under PTFA, if you meet minimum conditions, you have no less than 90 days to vacate upon being provided proper notice to do so, unless house was sold to an individual who intends to use it as their primary residence. I can go into more detail, but hopefully this should more than steer you in the right direction.

[Renter]

First- to MSbklawyer: thank you! I am somewhat flattered and hopefully others will know the answer now that the law schools have great subject matter to test on. *wink

For everyone else: I have been investigating rental foreclosure rights for the past week now and the broker told us about the Cash for Keys at the door stating that it was what the bank normally does. For the most part- the laws spell out what our rights are as far as who can kick us out, how long we have, and what is illegal for the former landlord to do (charging rent, owing us deposit, knowingly renting a foreclosing home, etc). It does not, however, depict what to do if the previous owner wants to try and collect on said property while the renter is living there.

We are still in limbo since the bank has not contacted us yet. Technically, the refrigerator did not come with this house (we moved into a brand new, newly built home) and they did just replace the old dishwasher last month and have the old one in the garage.

However, from what I have read in the forums here, he must put those items down as estate property, list them and probably lose them to the Trustee sale otherwise be sued- I dont know?
I was also told that taking appliances like the fridge is a constructive eviction. He can't evict without a court order or agreement and to call legal aid asap. He wants to do this THIS weekend so Im not sure who to call on Saturday. My husband is figuring that, given our last conversation- he is struggling on his current mortgage for his home, also. He probably paid his mortgage, found out that we stop-payment on our rent, somehow he came out under and is emotional right now. This is all an assumption.

We have been pretty awesome tenants for this family. We have payed rent on time all but twice (but payed ASAP) in the past 4 years as well as have been responsible for $100 of maintenance a mo and they have had VERY little they have had to do for us. We pay a high amount of rent for what we go through living here (neighbors, living space, rental market) so I feel confident that we have done everything in our power to be good stewards with an open line of communication.

We're resourceful, Im sure the bank will work with us.... when they decide to finally contact us.

[Renter]

You would probably have a good small claims case to get your deposit back (less any monies you may choose to withhold in the meantime). Lemme just make something clear, though... I'm nuts. Certified. Be sure to get your real legal advice from a lawyer.

That's okay, we're nuts too- and it's the nutty people who step out and get things done. Given the fact that he is threatening us after apologizing for putting us in this situation, we probably will go to small claims. We also will get real legal advice, but getting firsthand experience is vital to us, too.

(If he gets really nasty, I might have to call Judge Judy, hahahaha )

[DebtEnder]

Tell him he can't have the stuff as it is no longer his. He is not the owner. He owes you the deposit as you paid rent as agreed for as long as he was owner.The rental agreement has been completed in full on your end. You can't rent out what you don't own. He can't hold it as the deposit was to cover possible loss he incurs from you. He no longer has anything to lose.

Yes under the new act from 2009 you should get a full 90 days but the bank should offer a CFK deal. I would still pursue the former owner for the deposit. His claim to your stop payment is null and void. Your payment was for the next month living. He does not own the property as such he is entitled to any rent.

[Renter]

Thank you.

[JackBondLove]

It would seem to me that any appliances that are fixtures, like the dishwasher, are part of the house, and he has no right whatsoever to take that.

As for appliances that are not fixed, they are the property of the landlord, so he does have a legal right of ownership.

Now as for the lease, it would seem that as soon as the house was no longer owned by the landlord, the lease is terminated, although perhaps is extended by that PTFA law, but that simply makes the lease going forward a matter between you and the new owner, the bank.

As for as the legal situation between you and the landlord, you have already paid rent (to the end of October) up until the end of when the landlord no longer owned the house. In fact you *overpaid* by the amount prorated from the time the landlord ceased to be the owner. So the landlord legally owes you that overpayment and the deposit. The fact that you canceled payment on the November check is immaterial since the lease with the landlord will have ended by that time.

Now how that PTFA law works, I am not sure. It could be that any deposit of already paid rent can be considered as part of the house rental business that the former landlord owes now to the bank (among any deficiency in equity of the house) that technically the bank would now owe you (but which could be paid out in the form of free rent.)

At the very least you could claim that the non-fixture appliances are collateral for the money the landlord owes you, and you could tell him that you would have no problem discussing this with a judge or other appropriate adjudicator. You also tell him that he is longer the owner of the property and therefore has no legal right to enter the premises, and that any attempt to such entry would be tantamount to illegal entry of premises, which you will report to the police. I would also discuss this with your local constable who can have a legal discussion with the landlord - i.e., if the fridge is gone, you will be arrested for burglary; if you are in the house, the tenants can shoot you as an intruder (in Louisiana at least ) etc.

From a purely safety matter, I would make sure to deadbolt all doors, accessible from the inside, if possible. If you can get the agent to redo the keys and give you a set, that would be great as well. However, I would think that once the constable has his conversation, the landlord will back off. Heck, since the landlord owes you money, you might want to threaten to take him to court, only letting him off the hook if you get to keep the appliances!

[AngelinaCat]

Here is a link to an article about the Renters part of the Protecting Families at Foreclosure Act 2009:

http://www.theshriverbrief.org/tags/protecting-tenants-at-foreclos/

[Mensa1]

You might also want to contact the real estate agent who left their card, on behalf of the lender/new owner of the property.
The lender... being the new owner, would have an interest in whether the former owner is intending on trying to remove "their" property.
They should provide you some cover with this problem. If not, I would then contact the sheriff and state that the former owner has threatened
to remove property from the property, that which is not his. In most jurisdictions they would consider this theft by disception. Also let the
former owner know that you are taking his threat seriously and have notified law enforcement about the potential "theft".

[AngelinaCatHub]

All above, very good info. To add, if the LL wanted your current rent 2K and then want to take a refrigerator that would breach your ability to live in the place, how can he expect both? He is 'toast' and knows it. He is attempting panic recovery. If he owes you 3K, your rent is 2k a month, spend two months on him, then address picking up the rent from the bank at that time. You would then be even financially. This could easily be worked out with the bank as you are protecting their property from HIM and other break ins. I think in the long run, you will come out very well. 'Hub

[enuffznuff]

If the house has actually been taken back by the bank, my understanding is he doesn't have a right to anything anymore. That's not his dishwasher anymore, it's the Bank's. He could've taken it out BEFORE the foreclosure and transfer, but he's SOL now. I would call the guy that left you the card and ask him..perhaps the bank will rekey and give you the key if they know the prior owner is threatening damage to their property. That is NOT HIS HOUSE NOW.

[Protected]

Please don't pay him anymore rent money. Also, I think you have a very good small claims case to get your deposit back from him. His argument that you get to live there for free in exchange for keeping your deposit does not hold water. Keep in mind he has been "pocketing" the rent and not paying the mortgage. That is why he was foreclosed on.