Home Buying in Seattle>Question Details

thinkpad, Home Buyer in Seattle, WA

Bought a short sale but renting it

Asked by thinkpad, Seattle, WA Sat May 4, 2013

I moved to Seattle 6 months back and was planning to buy a condo, did not get it at that time so took a 12 month lease. Now I recently got a short sale after 5 months of applying. I am obliged to complete my rental lease for few more months. Can I rent out my condo in the meanwhile?

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In addition to what others have said about reviewing your lease, reviewing the condo regulations, and the landlord's duty to mitigate by finding a new tenant, there's one other factor you should consider. Your financing likely had representations/obligations that you intend/will live in the condo, and even stated a time period when you should move in. Violations there might have consequences.

Also, while I seldom state in these forums what I would do, I'll make an exception here. If it were me, between a sublease and merely terminating the lease early and dealing with the consequences, I'd probably choose the latter, particularly if the vacancy rate at the rental complex was low or there were a clause in the lease limiting my liability to 2 or 3 months rent. The wrong subtenant could cause you a lot of headaches and cause a lot of damages. They might not pay rent. They might violate the rules of the complex, resulting in fines. They might trash the unit. Unless you have experience as a landlord, or maybe because you have experience as a landlord, you might not want to take that on.

You could probably deal with a tenants' union for the lease issues (except subleasing, where you'd be a landlord). For the other issues it may be prudent that you contact an attorney for proper legal advice, which you cannot get here though this type of forum.
1 vote Thank Flag Link Sun May 5, 2013
Thinkpad,
That will depend on two factors, will the lender for the short sale permit it, you likely applied as an owner occupant and will the lender for the seller's permit it.
I suspect you may have better luck finding a replacement tenant for the condo. Review your lease and find out what penalties are included if you break the lease early. Typically the owners are obligated to replace you and you are obligated to pay for any months that remain until a new tenant moves in.
1 vote Thank Flag Link Sat May 4, 2013
Hi thinkpad,

With this being an "owner's market", I recommend you talk to your landlord, who may be willing to let you out of your lease a little early. Because we are in the spring market, it is a good time for your landlord to find another tenant and then he / she can get himself into a spring leasing cycle.

Also, rental rates have probably gone up since you rented so your landlord may benefit from finding a new tenant. Give your landlord plenty of notice and get your "move out agreement" in writing, so that your obligations to your landlord are clear.

I think you have up to 60 days to move into your home without causing an issue with your lender. Check with your loan officer.

Warm regards,
Karen
0 votes Thank Flag Link Sun May 5, 2013
This all depends on the HOA bylaws. Do they have a limit on how many units can be rented? You can find this out by asking your Realtor (if you used a Realtor) or the HOA. But then I'm just repeating what has already been discussed here.
0 votes Thank Flag Link Sat May 4, 2013
I agree with what has already been stated. Take a look at your lease & see what you can do about sub leasing it.

Good luck to you,
Jirius Isaac
Isaac Real Estate Team
Champions Real Estate Services
TriStar Finance #MLO-107799
Office: 425-483-6849 Cell: 206-841-9976
Winner of Seattle Magazines 5 Star
Real Estate Agent Best in Client Satisfaction Award
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0 votes Thank Flag Link Sat May 4, 2013
Hi thinkpad

Congrats on securing a short sale.

Check with your HOA, whether you can or not. Also check the conditions on
your loan. You must have bought it, claiming as "Principal Residence".

Prudent to rent out your 'present rental".

Best regards
Perry
0 votes Thank Flag Link Sat May 4, 2013
Check with your condo management company as to whether renting out the unit is permitted in the rules and by laws. Also ask whether the rental cap has been met. Alternatively, check the condo resale certificate you should have received when purchasing the unit for the answers.
0 votes Thank Flag Link Sat May 4, 2013
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