Rental Basics in Las Vegas>Question Details

mcmeech, Renter in Las Vegas, NV

can a landlord rent a short sale home?

Asked by mcmeech, Las Vegas, NV Wed Nov 7, 2012

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Paul Pineda’s answer
Yes. Legally, an owner can rent out a property up until the day of the trustee sale because it's legally his property still. As a renter, you must consider all the circumstances surrounding the sale prior to renting it. Sometimes, the buyer may be an investor that will be looking for a tenant and will honor your lease.

Paul Pineda
Property Manager
Golden Real Estate & Investments, LLC
8335 W. Flamingo Rd.
Las Vegas, NV 89147
0 votes Thank Flag Link Mon Nov 12, 2012
Yes you can rent a short sale home. There are many conditions that below are stated. If your loan does not allow you to rent the home, that may cause the lender to deny your short sale. Look at your loan documents to see if this is allowed.
If a tenant signs a lease, they are then protected with certain provisions. If the home is sold to a owner occupied buyer, they have 90 days to move out regardless of the term of the lease. If an investor buys the home, the will have to assume the term of the lease. Many times, with the short sale process taking time, the tenant does stay for the term of the lease.
I would, as a property manager, have to disclose the situation to prospective tenants and tell the owner his obligations as well as the tenants. Paul is correct in that if a notice of default is filed prior to the rental agreement, then it gets in to fraud, and voiding of contracts and all kinds of messy law problems. I would consult with professionals prior to renting the home.
0 votes Thank Flag Link Thu Nov 8, 2012
Yes..you can. Many landlords/investors are short selling their properties.
Its always good idea to speak to a CPA regarding tax consequinces.

For more information contact me at 702-612-7099 or email me at cvegashomes@gmail.com

Rena Levy
Broker/Associate
Realty Executives
702-612-7099
Web Reference: http://www.cvegashomes.com
0 votes Thank Flag Link Wed Nov 7, 2012
If a notice of default has been filed prior to you entering into a lease agreement with an owner/landlord then your lease could potentially be voided. That does not mean you would be thrown out on the street however. The protecting tenants from foreclosure act leans towards renters rights. If a lease was entered into prior to the Notice of default, then typically if the home were to be foreclosed the bank would be required to honor your lease if the market value rents supported what you were paying.
An owner/landlord has the right to do with the property what they want. They have the right to rent out their home, regardless if they are not honoring the payment of their mortgage.
As a tenant, you might be able to purchase the home, should it be foreclosed. You might be able to lease month to month until it is sold. Again, that is determined when a NOD (notice of default) was filed.
0 votes Thank Flag Link Wed Nov 7, 2012
Yes it can.

As long as it is disclosed to all parties involved upfront what the situation is. The owner still has right of ownership on the property and we still be able to collect rents on the property. I myself have never seen a bank ask the owner to give up the rents to the bank.

The only time I seen banks collect rents is when they have ownership of the property and they have rented it out.

Best regards,

Chris Harrison
Barrett & Co., Inc.
702.592.9510 ph
Chris.Harrison@msn.com
0 votes Thank Flag Link Wed Nov 7, 2012
Sure! The owner still controls the asset.
0 votes Thank Flag Link Wed Nov 7, 2012
True, many property managers don't like working with distressed properties, and it actually often beneficial for the home to be empty if they are selling via short sale (easy to show, appraise, no HAFA tenant requirements), but you are still allowed to rent it out.

Also.. If its an owner-occupied mortgage, the the owner may not qualify for a short sale with a tenant in place.

In the end, we're seeing cash for keys for tenants even in short sales.
0 votes Thank Flag Link Wed Nov 7, 2012
Most Brokerages Do Not allow distressed properties to be leased. If they do, It must or should be disclosed prior to signing a lease. Then on the owners side, the bank will demand the rental income if it is being collected. But ask if you have any questions, and get an email from the listing Agent with a definite answer.
0 votes Thank Flag Link Wed Nov 7, 2012
Probably not a great idea unless you are staying for free and are ready to move fast!
0 votes Thank Flag Link Wed Nov 7, 2012
This just might go over the line into FRAUD:
I sure wouldn't advise it.
0 votes Thank Flag Link Wed Nov 7, 2012
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