How can tenant verify property renting not in mortgage trouble?

6 Replies

What if a tenant finds a house for rent from a property management company?  Future tenant asked the managing agent about status of mortgage and if payments are current, but managing agent never provides those answers via email.  What are the rights of the tenant if they move into the house for rent and find out mortgage is behind by 3 months.

What are the legal rights of the renter in Georgia?

No idea of tenant rights in your state, but a general concern is: what if the landlord lies? What if this month they are up to date, but stop next month? Is the tenant going to ask every month for proof they paid? I'm not sure there is a sure-fire way to know this with certainty, other than the landlord giving their monthly loan statement to the tenant (yeah, right).

The tenant can always tap into public records and watch for signs of foreclosure. Beyond that, not sure. Sounds like a good business niche to exploit, landlord monitoring.

I can answer from experience that when I am in Magistrate Court for an eviction of a tenant, the judge always mentions to everyone there that if any tenant in the courtroom is there because he/she is being evicted even though their rent payments are current, due to the house being foreclosed on, that "Magistrate court" is not the proper venue. The judge does say that the tenant can bring suit against the owner who did not perform according to the contract - "in another court".  Every time I am in court, there are a number of tenants in this situation, and I always see them leave - and they're not too happy. I'm not sure that a tenant can research if the owner is making payments, unless the owner provides the mortgagor name and account number to the tenant. I have met with tenants that were in that situation before - and they have said they no longer will deal with an individual for a lease option again- only a company that has multiple houses (like our company), to try and avoid that situation again. Not saying that this is always safe - but that was their impression after being taken advantage of by an unscrupulous landlord.

What can tenant do concerning the management company?  Seems like the property manager knew something was fishy.  Now property manager said it is between the tenant and landlord.

A tenant at a property I manage brought it to my attention the house they were living in was behind.  They got a foreclosure notice at the house.  So, I found out AFTER they did because the owner never said a word to me.  Fortunately, he was able to catch up and everything is OK now, but it could have ended badly.

The only way a tenant or potential tenant could find out if a house is up to date on mortgage payments is if the owner allows them access to those records.  Perhaps by showing a current mortgage statement or conference calling the bank, I suppose.  Outside of that, a person or company's mortgage is sensitive financial information just like any other account.  No bank is going to give that kind of information to some random person, which is how they would view a tenant.

I suspect there are public records available if a property has already been put into the foreclosure process, but it would have to already be in the process.

I did have this happen to a friend about 8 years ago.  He was renting a house and a notice (I think from the bank) was put on his door that the house had been foreclosed on and the bank was taking possession as of X date.  He had to scurry and find a new place in only about two weeks. 

In our state, CA, you can go to the county recorders office to see if a Notice of Default has been placed on the property. That being said, the notice of defaults don't happen until they are a few months late.  Notices will be sent to the home.

If you really feel strongly that there is something fishy going on, ask the mgmt company again to verify that they are paid up on their mortgage. 

Banks are working with people these days.  one of my tenants received a notice of default and along with it was an application for them to apply to rent from the bank, if in fact, the bank did foreclose.  It was not a guarantee, but an application in case both parties agreed.