What happens with tenants when their landlord faces foreclosure?

Sunday, March 20, 2011
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By JEFF BISHOP jbishop@newnan.com You've been dutifully paying your rent on time every month, but then you read a foreclosure notice on your building in the newspaper. Doesn't seem fair, does it?

"It's been a nightmare," said Sharon Tranter, owner of St. Hair on Highway 34. Ever since a story ran in The Times-Herald last week saying that her building appears in the March foreclosure notices, the phones have been ringing non-stop. "I've just been inundated with people wondering if I was going out of business," said Tranter. "I had calls today and calls yesterday. I had to put a notice on Facebook to make it very clear." She said St. Hair isn't planning on going anywhere, and neither is insurance agent Dianne Parker, or Ray Dubose's jewelry company in downtown Newnan, or JK Boatwright CPA downtown. "We are simply tenants who rent from a landlord," said Parker. "This is no reflection on businesses who are tenants. It's simply a reflection upon the landowner." In the case of St. Hair and Parker, that landowner is New River Property Group LLC, which was named as the mortgage holder in the original story. But people are still confused about what that means for the businesses, the business owners explain. "This has nothing to do with us as a company," said Tranter. "We need to let people know," she said. "We are still doing business. We may be forced to sign a new lease at some point, but it's business as usual for all of us right now. I'm amazed at just how confused people are." "I've had several people ask what's going on with my business," said Ray DuBose. The mortgage holder in his case is Downtown Preservation Properties LLC. "I've had inquiries, wanting to know if this is going to affect us, and that kind of thing. I want to make it perfectly clear that we are going to be open here and we are open for business," he said. "It's hard enough to be in business as it is," said DuBose. This is becoming an all too familiar scenario for thousands of renters nationwide -- and not just business owners. Banks are sometimes booting good tenants onto the streets with little to no notice after seizing a property from a delinquent owner, ignoring tenant leases. In the most troubling cases, some families are forced into shelters for temporary housing because they have little savings to cover moving costs, first month's rent and a security deposit at another apartment, according to Associated Press.. The first thing a tenant should do when he or she finds out that their building is in foreclosure is to call the sheriff's department. Find out how long the foreclosure process may take. Then you'll have a timeline to work with and time to prepare for the worst-case scenario. Next, get on the Internet. The U.S. Department of Housing and Urban Development outlines tenant rights by state on its website. You can also do a little digging into your landlord's financial situation if you're worried about a possible foreclosure. Go to the county courthouse or its website and do a rudimentary background check on your landlord. District court records or the county recorder's office will show if any foreclosure actions or judgments have been filed against your landlord. Are there any other records showing financial distress like past or present bankruptcy filings? These can be telltale signs of a landlord strapped for cash, the AP reports. Also, call the Better Business Bureau to see if there have been any complaints against your landlord. This can be a clue that something isn't right. Last, has the condition of your rental property suddenly deteriorated because of neglect? If the landlord isn't making repairs, maybe it's because he can't pay for them or doesn't want to spend money on a property he's about to lose. In the meantime, save your money for a rainy, forced-out-of-my-home-or-business fund. If you are looking for further help, you can call Tenants Together's foreclosure hot line at 888-495-8020.

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What happens with tenants when their landlord faces foreclosure?

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