Renting your home

[BilboBaggins]

Is there anything wrong with renting a home that is being foreclosed on? I was thinking about putting a 30 day lease on it. I read that the Banks must give 90 days for renters to vacate.

Has anyone done this? I'm on the hook for the upkeep and fees so I figure its still mine.

[memama]

We considered doing the same thing, since we'll be moving out of state. You need to speak to your lawyer about this...

You should inform the tenant that the home is in foreclosure...I think there are legal consequences if you do not but that would require more research.

Also, I *believe* it's federal law that tenants renting month-to-month get 90 days to vacate...

[scooter6251]

We have been renting ours for a year. Discharged 1/11, moved out of state 5/11, started renting 6/11. Our attorney approved it for us but he insisted that we use a property management company and they had an addendum to the lease prepared that informed the renter of the pending foreclosure. The lease was for a year. That tenant was transferred in March and the PM company found a new tenant. They also signed the addendum stating their knowledge of the pending FC. For 10% of the rent, the PM company has been worth every penny. We have been isolated from the process and still receive a nice check monthly. We reported the income on our tax returns. The house is still in your name, just CYA by putting a licensed professional between you and the renter. Just last week the bank, GMAC, served a LP on us, actually on the current tenant. Our PM agent said they were not in a panic since they had been made aware of that possibility. And they just paid June's rent. Who knows how long it will take GMAC to proceed, but probably 90 days is the quickest possible. Our PM company has assured the tenant they will find her another rental property, so she is comfortable. And the house in FL has been maintained and we informed the lender that we were renting it about 6 months ago. So we didn't try to hide anything. Not recommending that you do it, just telling you our experience. Good luck

[HHM]

Scooter appears to have done it the right way. Get a management company to handle it for you. It will save you a ton of headache (e.g. having to find the tenant, vet the tenant, etc).

But yes, you CAN rent the property even though it will be eventually foreclosed. But you need to be on the up and up about it.

[bcohen]

Just last week the bank, GMAC, served a LP on us, actually on the current tenant. Our PM agent said they were not in a panic since they had been made aware of that possibility. And they just paid June's rent. Who knows how long it will take GMAC to proceed, but probably 90 days is the quickest possible. Our PM company has assured the tenant they will find her another rental property, so she is comfortable.

THAT is what is important--making sure that the tenant is not screwed over on the deal. By using a large property management company, the tenant can be assured that if/when the house is foreclosed, they will be able to move immediately to a different house of similar cost. Also, the tenant does not have to worry, because their contract is with the property management company--not with you.