Rentals in Brea>Question Details

Heather Smith, Other/Just Looking in Centreville, VA

I have been paying rent but either my landlord or mgt company has not been paying the mortgage. Is this legal?

Asked by Heather Smith, Centreville, VA Tue Aug 21, 2012

I have moved out and the townhome in Centreville, VA was already in short sale. They also want to use my security deposit for some repairs which I should not be responsible for. Is it legal to make repairs on a short sale and to also not use my rent money for mortgage payment?

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Heather; I expect you had a written Lease with the Landlord;
1) You are responsible for the full term of your lease unless the landlord provides a written release from your obligation.
2) The rent for the full term of the lease is due unless # 1 above happens.
3) The fact the landlord is not paying the mortgage has nothing to do with your situation. You pay rent on the 1st of the month and you get housing for that month - that's what rent is and you were getting what you paid for.
4) Your security Deposit can be used for any repairs needed on items that did not exist when you moved in (Typically, tenants complete a "Move-In / Move-Out" form describing any issues that exist at move in and then again at move out). If the Security Deposit doesn;t cover the repairs, the landlord can sue you for the balance.
5) If you moved out prior to the end of your lease, unless the landlord provided you a release in writing, you continue to be responsible for that lease until it expires and your landlord can sue you for the balance - even if it's sold - short sale or not.
5) Did you give notice in writing of your move-out per the terms of your written lease?

This is not Legal Advice, it is just my opinion and you should see the Legal services of an Attorney as soon as possible.

Good Luck,
2 votes Thank Flag Link Wed Aug 22, 2012
Clear answer .

Flag Thu Aug 23, 2012
great answer!
Flag Wed Aug 22, 2012
Here is some information about a pending CA law .

The California bill (SB 1151) would enable a tenant to walk away from a lease or rental agreement if the landlord failed to make the required disclosure, and would provide for damages of twice the monthly rent, or actual damages, whichever is greater, if the tenancy is terminated by the new owner.

Interestingly, the California Apartment Association supports this bill. They point out that residents of single-family rentals are more likely to lose their rental upon sale at foreclosure than apartment dwellers. This makes sense, because people who buy multiunit properties are less likely to plan to live there than those buying single-family homes (and an owner can live in only one unit, after all). The California bill would still enable the new owners who buy at the foreclosure sale to oust a tenant upon 90 days' notice -- but if the default was not disclosed, the tenant would be entitled to damages. Of course, the hope is that landlords who learn of their disclosure duty will comply, giving tenants the information they deserve to make an informed rental choice.

Soila Thompson
Buyers Agent
1 vote Thank Flag Link Thu Aug 23, 2012
If there is a management company they most likely don't have anything to do with the lender. Their job is most likely to collect the rent from you and then send the owner a check. The owners mortgage responsibility is with their lender and most likely doesn't have anything to do with you or the management company.
1 vote Thank Flag Link Tue Aug 21, 2012
Great answers below.

Yes, it's legal. The landlord is still the legal owner of the home until the bank forecloses. If you had a rental agreement, the terms of the agreement are still in effect.
0 votes Thank Flag Link Fri Aug 31, 2012
Since, the owner has an agreement with the bank; it’s nowhere connected with you. You are still obligated to pay the rent even if he is not making his mortgage payments. The landlord & the bank could take anywhere from 90 days to several months to actually foreclose on the property. However if you are still worried about the situation, you can move to another area by giving 30 day notice period.
0 votes Thank Flag Link Thu Aug 30, 2012
First, only an attorney can advise on legalities, but this happens all the time. It is really an issue between your landlord and the mortgage holder. Be proud that you are responsible enough to pay for your commitments.
0 votes Thank Flag Link Sun Aug 26, 2012
Unfortunately... it happens. Please contact Legal Aid or an Attorney in your area .

Soila Thompson
0 votes Thank Flag Link Wed Aug 22, 2012
Hello Heather,

As long as your landlord still owns the property you must live up to the terms and conditions of your rental/lease agreement.

You must pay your rent/lease up and until the home is sold. At which point you will be given notice to vacate.

If you are worried about the situation with the property, you can give a notice to vacate,providing it is done in accord with the agreement. The land lord must return your secirity deposit less any amount used to make any repairs to damages caused by you..

The landlord not paying the mortgage does not release you from the agreement you entered.

It is not wrong for the current owner to make repairs on the property even if it is a short sale.

Best of luck to you,
Kawain Payne, Realtor
0 votes Thank Flag Link Tue Aug 21, 2012

Are you still in NOVA now or in CA? You should call a real estate attorney in VA immediately and see if you can get a free consultation regarding this matter.

Question: are there real issues with the condition? And were the left over furniture from the previous tenant noted on the lease?
0 votes Thank Flag Link Tue Aug 21, 2012
The purpose of my question was never to live for free or not owning up to my part of the responsibility. I have paid every rent on time and in full and the place has been maintained according to the lease agmt, Suzanne.
0 votes Thank Flag Link Tue Aug 21, 2012
It is perfectly legal to make repairs to a property that is subject to a short sale. It is also perfectly legal for the owner to rent the townhouse to you and not pay the mortgage. And if you damaged the townhouse during your tenancy it is perfectly legal to use your security deposit for repairs.

Nothing changes until ownership changes when the property is either sold or taken back by the bank as a foreclosure and even then the security deposit would be turned over to the new owner, who would then use your security deposit to do any repairs made necessary due to damage you caused.

I am sorry to disillusion you, but for the life of me I cannot understand how tenants think they can live for free or not pay for damage they caused simply because their landlord is in financial difficulty.
0 votes Thank Flag Link Tue Aug 21, 2012
Go to housing department.

Libardo Quintero
NMLS 380933
0 votes Thank Flag Link Tue Aug 21, 2012
I would contact an attorney. They have no right to use your security to make repairs or for anything else, even if they were caused by you, until you move out. They too have to follow the law. You may have a 93a claim, but you can't get blood from a rock. Call your attorney
0 votes Thank Flag Link Tue Aug 21, 2012
The place is well maintained and I have been the ideal tenant for two years. I want to be professional and firm with the management company on the deposit issues but they inherently seem to have the upper hand and unfairly hang the deposit over my head. Also the previous tenant left furniture and I was naturally told I could discard them. Now they are saying the missing items are a deposit issue! If I had known this would happen I would have kept a folder of these emails and asked for everything to be in writing.
0 votes Thank Flag Link Tue Aug 21, 2012
I appreciate your response. I rented the townhouse for two years and during the one year renewal I reported some mismatch paint and a crack in one of the windows. The inspector recorded the paint issue and reported that the windows were in bad shape as there was condensation in the windows which could have caused the crack or it was a "settlement crack." Anyway the lease was renewed with the understanding that the paint and window was not my fault. But a year later they are trying to take this out of the security deposit. During the move out they even indicated the window was not a security issue but changed their mind 2/3 weeks later! I was advised to take them to small claims court which I am trying to avoid.
0 votes Thank Flag Link Tue Aug 21, 2012
I just recieved your questions. Unfortunately you have no control what they do with the money you give to them. You are doing the right thing by paying your rent. It sounds to me like they might be heading to short sale their property or they might be losing it to the bank. As a landlord, they can do what they choose with the money they receive. I am sorry you are experiencing this crazy market at this time.

0 votes Thank Flag Link Tue Aug 21, 2012
Hello HYS,

I am sorry you are in the situation you are in but as Alain said this is happening more often. In California the lease you signed obligates you to continue paying your lease regardless of what the owner is doing with the money.

Looks like you already moved and are dealing with this issue from across the country. Deposits are a sticky issue in a normal situation but this may be more difficult. If the property is managed then maybe that management company is doing what they may be contractually obligated to do even though the property may be foreclosed on, which is truly spending good money after bad. Ask for any receipts for any work being done and that and the money you do get should equal your deposit.

Good luck,
Brian Wilson, Realtor
DRE# 01321478
0 votes Thank Flag Link Tue Aug 21, 2012
Thanks for your response. Is it possible that the management company paid the rent since the landlord is in the military and overseas. If the management company is responsible for paying the mortgage, are they allowed to voluntarily not pay the mortgage ?
0 votes Thank Flag Link Tue Aug 21, 2012
Ussually managment companies will direct deposit the rent into the owners account. I do't know of any that would open themselves up to liability issues and pay a mortgage with the rent money. In my experience, rent is paid, and the owner has the money direct deposited with in a week or so. Then its up to the owner to do as they please. Good luck!
Flag Wed Aug 22, 2012
All I can say is that this happens a lot. If you have a lease with the current owner of the townhome you are usually required to pay your monthly rent or you could possibly be subject to eviction. Usually what the owner does with the rent that you pay is up to them but if they aren't paying the mortgage then they eventually most likely won't own the townhome any more. As far as your security deposit being used for repairs, you would have to read your lease agreement with them.
0 votes Thank Flag Link Tue Aug 21, 2012
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