The recession bites responsible people too.

Brown and her family are being evicted not because of anything they did, but because her landlord defaulted on the mortgage and the house fell into foreclosure. The house was recently sold at auction.

The bad news came just seven months after Brown had moved in. A real estate broker came to the door and handed her an eviction notice, telling her she had 30 days to vacate. “I was hysterical, I was like, what do you mean?”

The broker explained that the landlord no longer owns the property and that the lease was no longer valid. Brown had no idea the house was in foreclosure. As a tenant, she always paid her rent on time, and she assumed the rent was going toward the mortgage.

It looks like Ms. Brown would have benefited from an additional contract with her landlord.

In most states, when a bank forecloses on a landlord, the tenant has no guarantee of being allowed to stay in the property, and neither the bank nor the landlord has a legal obligation to tell the tenant about the foreclosure. So while the owners know what’s going on, renters are usually kept in the dark.

I think this might be a case where a little legislation could go a long way. Just require full disclosure to the tenant about a house’s foreclosure status. Seems fair to me.

This entry was posted on Tuesday, March 24th, 2009 at 2:44 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.