Landlord's Ch 13 and My Lease . What should I do?

[DiamondsR]

I'm hoping someone can offer some advice.

My chapter 7 was discharged in March 2010. During the Chapter 7, I moved out of my home (a lease-option disaster) into a rental (which was hard because at the time because of my bk filing). I finally found a really nice lady that wanted to rent her home out to me. She said she had gone through a bk and understood. The rent is $2000 per month, with $200 of that going to utilities. I paid First, last and security (2000+2000+1000).
The landlord is unemployed and I guess leased it to save her house/credit/investment.
For the past three months, the landlord has had financial problems and asked me for the rent early (usually two-three weeks early). Last month she needed the rent four weeks early because there was a notice of default from the mortgage company. She even sent me a copy of it (which I kept) but I noticed it said "ex parte motion for relief from stay". There are constantly certified letters coming here (IRS, homeowners association). She asked me two months ago to change the electricity to my name but offered to drive my children to school for the $200 per month instead so we wouldn't need to change the lease. Two months ago, I got a great job and, as a single parent, she offered to do that and I thought that was nice but I didn't bite because $200 is an awful lot just to bring a kid back and forth to school (and I can do it myself). At one point last month she said I would be the first to buy the condo if she decides to sell it (she knows I just got out of a bankruptcy). She is still in Ch 13 bankruptcy (hasn't been discharged) and I wonder if the trustee even knows she's leasing the place to me (my lease is notarized).

We have a two year lease and I am starting to worry because I have paid so much in deposit and my questions are 1) what are my legal rights if she loses the house? 2) Can I at least stay here paying my $2000 until December 2011 - when the lease expires - even if it is foreclosed? 3) Is it legal to ask her to sign the house over to me if she is losing it anyway? 4) Do I need to file a claim for my last month and security if she loses the place with her Chapter 13 trustee?
5) Should I inform the trustee?
She is a very nice person but this really concerns me. I hate uprooting my kids again but realistically I cannot buy this place just coming out of a Ch 7 (no bank will touch that). On the other hand, even though this looks like a sinking proposition, I don't want to break the lease and end up having to pay her thousands of dollars/being sued!
Oh I forgot to add, she lives really close (same complex) and has a tendency to keep coming in and out of the house because she left a lot of her personal things here. That's starting to drive my kids crazy because they feel like she still lives here and she doesn't announce it (just opens the door, works on the pc, gets books, etc. then leaves). My kids are 17, 15 and 13. She's also never done little things like cleaning the carpets before we moved in despite saying she would for months.

[helpmeout]

I am interested in the response to your question about the security deposit.

As for the landlord coming and going, you can put a stop to that. The only way she can legally access your home is if she needs to do repairs to the home. Any other reason and she is trespassing. Send her a letter, certified and require that she sign for it, that states she is not to just randomly enter your home anymore and that if she needs to access your home for repairs, she needs to give you notice short of an emergency. If she has not moved all of her stuff out, then she needs to do so. But she first needs to give you notice. You are paying rent. While you are paying her rent, she cannot just enter the home at will simply because she owns it. And I would try to get a copy of her Chapter 13 filing. She may have listed you as a creditor because of the security deposit. If she did, then you need to file a claim. IMO, but an attorney can tell you for sure.

[DiamondsR]

Thanks, Helpmeout.
I'm not listed as a creditor, though, and don't think she's even told the trustee she lives somewhere else because mail from the court keeps coming here for her. I always give her her mail. (She's been in Ch 13 since 2007 and I started renting/met her Dec 2009).
I'm going to put her on notice about coming in all the time too.
I wonder if I should start sending mail back for her too? Does her not coming in also include not opening the mail box while we lease? I know she has a key and has opened the mailbox before (I wonder if I should include that in the letter).

[helpmeout]

Thanks, Helpmeout.
I'm not listed as a creditor, though, and don't think she's even told the trustee she lives somewhere else because mail from the court keeps coming here for her. I always give her her mail. (She's been in Ch 13 since 2007 and I started renting/met her Dec 2009).
I'm going to put her on notice about coming in all the time too.
I wonder if I should start sending mail back for her too? Does her not coming in also include not opening the mail box while we lease? I know she has a key and has opened the mailbox before (I wonder if I should include that in the letter).

Yes, I would address the mailbox with her, as well. If she isn't living where she is telling the bankruptcy court she is living, she could run into issues. And if she isn't declaring what you are paying for rent as income with the bankruptcy court, she's going to have issues. And you want to distance yourself from those issues. Just follow the lease and enforce the separate households. And ask to see the bank account where she put your security deposit in to hold for when the lease is up and she has to give it back to you. I know that when a friend of mine was a landlord, she had to open a special bank account to put the money into. Of course, she was following the NJ regulations for landlords by doing so. You need to find out what the laws are in your state.

[ForumReader]

Yes, I would address the mailbox with her, as well. If she isn't living where she is telling the bankruptcy court she is living, she could run into issues. And if she isn't declaring what you are paying for rent as income with the bankruptcy court, she's going to have issues. And you want to distance yourself from those issues. Just follow the lease and enforce the separate households. And ask to see the bank account where she put your security deposit in to hold for when the lease is up and she has to give it back to you. I know that when a friend of mine was a landlord, she had to open a special bank account to put the money into. Of course, she was following the NJ regulations for landlords by doing so. You need to find out what the laws are in your state.

That is right. I hope your landlord has put your security deposit in a special escrow because that should be your money back when your lease expires and you decide not to renew the lease. Check with your state laws.

[mamaluv]

That is right. I hope your landlord has put your security deposit in a special escrow because that should be your money back when your lease expires and you decide not to renew the lease. Check with your state laws.

I'd hazard a guess that based on the way the landlord has been doing things she did not put it in an escrow account. As much as I hate to say it, I think she probably spent OP's money long ago.

[DiamondsR]

I'd hazard a guess that based on the way the landlord has been doing things she did not put it in an escrow account. As much as I hate to say it, I think she probably spent OP's money long ago.

When she asked for the lease payment one month in advance, I started to think maybe she took the last and security deposit to catch up on her mortgage.
I'll keep paying religiously (until the sword drops on the foreclosure I guess) but need to put a little away in case we have to leave immediately. In the meantime, I'll send a letter to stop her drop in intrusions and stop the rifling through the mail business.

[helpmeout]

I'd hazard a guess that based on the way the landlord has been doing things she did not put it in an escrow account. As much as I hate to say it, I think she probably spent OP's money long ago.

I also think that she isn't declaring that income to the Trustee and is telling the Trustee that she is living there. I hope the OP has kept a clear papertrail that she has actually been paying rent. If not, she may end up paying twice.

[DiamondsR]

I have always paid her with cashier's checks (keeping the receipt) or by check. I've been taking all of the cashier's check receipts with me to work even (knowing that she comes in the house all of the time).
Is it worth asking the trustee if they are aware of the fact I am leasing from her (and sending a copy of the notarized lease)?

[ForumReader]

I have always paid her with cashier's checks (keeping the receipt) or by check. I've been taking all of the cashier's check receipts with me to work even (knowing that she comes in the house all of the time).
Is it worth asking the trustee if they are aware of the fact I am leasing from her (and sending a copy of the notarized lease)?

I think it might be worth checking with the trustee to see if they are aware of your leasing from her. I would be concerned about your security deposit because that is in your security interest. Check your lease agreement regarding the security deposit.

[kornellred]

If your landlady spent your security deposit, that is her problem, not yours. You get to live in the leased dwelling for free for the last month. Security deposits are what landlords require to protect themselves from the irresponsibility of the tenant. In the state of New Jersey, in order for a lease document to be legally binding, security deposits must be kept in a separate account. Informal arrangements between landlord and tenant mean nothing.

[LadyInTheRed]

If your landlady spent your security deposit, that is her problem, not yours. You get to live in the leased dwelling for free for the last month.

Not if the bank forecloses and the OP doesn't get any notice because the landlady took it from the mail box.

[ForumReader]

To the OP,

Given what you have described about your landlord with her intrusions and such, I think perhaps you need to have a discussion with your landlord regarding your security deposit. Make sure there is clear understanding what to expect in regard to your security deposit between you and your landlord.