Questions About Rent Stabilized Tenants
I just purchased a foreclosure last week. The bank who owned the property for the last year did not collect any rents from the tenants. The bank gave me an assignment of rents which allows me to collect a year’s worth of rents. The tenants are now giving me a hard time as they don’t…
I just purchased a foreclosure last week. The bank who owned the property for the last year did not collect any rents from the tenants. The bank gave me an assignment of rents which allows me to collect a year’s worth of rents. The tenants are now giving me a hard time as they don’t want to sign new leases and they don’t want to start paying rent. I just hired an attorney who will start the process to sue for the last 12 months of rent, plus the rent they owe currently. I am concerned that I won’t win, and these tenants will continue to live for free….am I worrying for nothing?
There’s a lot we don’t know. OP says the tenants are RS. If the previous owner and the bank while it was REO did not offer renewal leases, then you’ll have to provide them with the rtp8 at least 90 days before the start of the new lease term. If you do that now you’d be offering them leases to start 10/1/2010, and they’ll have 60 days to respond.
I hope the price was good enough that you can operate the building and pay expenses (including legal) for a long while until you start getting income.
I’d suggest if you haven’t already, join RSA. Pay the $75/year membership fee and you can talk to RSA counselors, and get some of the basic information on dealing with rent stabilized/non-paying tenants without continually running the clock on your attorney’s time.
You bought yourself a big problem. The rent issue will take a long time to iron out and in the meantime the tenants will not need to pay rent to you, though the court may order them to pay into an escrow account held by a lawyer.
OP, what makes these tenants rent-stabilized? Why new leases? Do you have copies of tenants’ previous leases (expired or not)? Not finding substance in your post.
You need an experienced, competent attorney to sue for the back rent, and to compel your tenants to sign new leases. You also need an education in the rights and obligations of both landlords and tenants in rs situations. Everything has to be done by the book, or you’ll land in hot water. It may take a couple of years to sort out, so you have to be financially and emotionally ready.
Poor people that don’t pay rent….
there’s NO way youre gonna be getting the last 12 months of back rent. that just doesnt happen. just try to your best to get them out and forget about the rent cuz you wont be getting it. they probably dont have it anyway! it sounds like youre kicking poor people out.
*rob*
I think tenants are now required to deposit their rent into some kind of escrow account when they stop paying, but have no idea what the situation is in a foreclosure. What is your lawyer saying about your chances for success?
A long while ago I was involved in purchasing a building which had several long-term non-payers the former owner passed on. Not sure if we recovered all the money or settled for a portion. If your tenants are refusing to pay current rent or sign leases, they are probably evictable as ‘holdovers,’ unless the building has tons of violations which would justify them not paying.
Get a good lawyer and go after them with both guns.
They don’t want to start paying current and future rent or just the back rent? I don’t know about the rent whilst the place was in foreclosure. Of course the bank could’ve cared less about trying to collect rent when it was a REO so it’s now your problem. I know its a foreclosure but didn’t you do any diligence? If the place has heat, hot water, and is considered “livable”, I don’t see how they can justify not paying current rent.
You should worry – Unless you’re a seasoned investor, even if you got this place for nothing, the fact that you’re asking theses questions on a blog says you probably should’ve bought elsewhere. Long story short – you can get them out eventually, however, it’s going to be a pain in the a___, especially if they have kids. Make sure your attorney is experienced in this sort or thing.