Landlord is short selling and made no mention of this prior to lease signing (Denver: short sale) - Colorado (CO) - City-Data Forum

jcourtneyii · 05-04-2010, 05:57 PM

We are renters who moved in on 2/15/10. Less than one week after, we received notification from a 3rd party (not our landlord) that the house was headed towards foreclosure. We contacted our landlord immediately who said not to worry and they are working within the legal world to get this resolved. Sure enough about 2 months later, the landlord came by and told us that all legal advice was to short sell the house.

My issues besides their lack of integrity for not disclosing thie to us is whether or not we'll get our deposit back. Plus prior to signing the lease, we explained to the landlord that we paid double rent (since we had 1 month remaining on our old lease) because we really wanted to live in this house and yet they made no mention of this possibility. If they had, we would have never agreed to the lease. Bottom line, it cost us about $1000 to move into this house and will cost us another $1000 to move out along with the double rent (for the old place). Plus we've had to dish out deposit on a new place since we decided to just get the heck out. Obviously, we are pushing for our deposit back. Do we have any legal right to ask for reimbursement of moving costs or lost money that went to us paying double rent?

Luke9686 · 05-04-2010, 05:59 PM

Talk to an attorney ASAP.

2bindenver · 05-04-2010, 07:30 PM

You jumped the gun. Your contract was for a certain term with the owner of the property. You have not honored your agreement.

JenUlasewich · 05-04-2010, 07:49 PM

Unfortunately, 2b is correct.

In Colorado, sales of properties are subject to leases. That is, if a property has a lease agreement through, say, December and it sold in May, the new owner would have to honor that lease. This would still apply in a short sale.

In a foreclosure situation, lenders are working with tenants to avoid eviction, due in no small part to lots of negative news coverage of people in your circumstances.

So, even though it's extremely unattractive to be in a house that is having showings and getting foreclosure notices, I'm guessing there's nothing in your lease that lets you off the hook. You have not been evicted, you chose to move, albeit for reasons with which many would sympathize.

I'm afraid you're probably out of your deposit and moving costs. Perhaps your next move will be into your own house so you don't have to deal with these landlord hassles? FHA loans require only 3.5% down these days.

Sorry and good luck.

jcourtneyii · 05-04-2010, 11:38 PM

To JenUlasewich,
To be honest, I can't say that I hold real estate agents in high regard. I'm from Kansas City where in 15 years I have owned three homes. The first two I used an agent to "sell" for me when I ended up doing most of the work. Money not well spent. By the time I sold my third home, I did it by FOB and saved a lot of money & time and found the job rather. . . simple. Therefore, your comment about landlord hassles doesn't hold a lot of weight for me as the last thing I want to do is deal with real estate agent hassles. You earn a lot of money for something any seller can do themselves.

Bottom line, I'm not in the market for buying a home (which has nothing do with qualifying for an FHA loan as I'm prequalified an able to put over 20% down). I'm just new to the Denver area and still not sure I'm ready to invest long-term.

That being said, our landlord said while they hoped to sell the rental home to an investor, they are going to sell it to anyone willing to pay. She mentioned that we are free to do what we want. We can stay and "hope" that an investor is willing to buy the house, or we can move out. I asked what kind of guaruntees we can get about our deposit and she said within 30 days of moving out. On April 27th, I replied and said that we are moving out on May 15th and we request our deposit be back to us in 5 business days after the final walk through on May 16th. What I'm curious about is if she balks at that, would I have the ability to then pursue legal action and ask for my original moving costs and the double rent I paid in month one (due to still owing one month on last lease)? Again, this potential for short sale/foreclosure was known to them prior to me signing the lease. Had I known even a hint of this, there is no way I would have agreed.

JenUlasewich · 05-04-2010, 11:57 PM

Sounds like you've dealt with some lame agents, sorry. Please know that not all agents are like that, and the bursting of the housing bubble also had the much-needed effect of "culling the herd" of many part-timers and people who went into the business not expecting to work hard.

You may have grounds to try to get money back from your landlord, as a Realtor I don't work with leases so I can't say for sure. But, it sounds like she's in some state of financial distress and that deposit may be long gone. You could call an attorney and find out, and even have him/her write a letter, many will do a letter for about $50. A cheaper but more time-consuming option could be to go after her in small claims court as long as we are talking an amount under the $7500 threshold in Colorado.

Either way, though, it sounds like it might be more for your satisfaction to stand upon a principle than to actually get some $$, even if you ultimately prevail.

ebeth79 · 05-06-2010, 07:11 AM

Quote:

Originally Posted by JenUlasewich

Unfortunately, 2b is correct.

In Colorado, sales of properties are subject to leases. That is, if a property has a lease agreement through, say, December and it sold in May, the new owner would have to honor that lease. This would still apply in a short sale.

No offense, but this isn't necessarly true. We bought a short sale home last summer. The owner was using it as a rental. The lease agreement was not up and the tennants had done nothing wrong. I felt bad for them, but I needed a place to live ASAP. Their lease with their landlord was terminated, they were made to move out and we moved in.

The sign and short sale info was posted on a Friday or Saturday, mid-April by Monday they had accepted our offer and the tennants were told they had to vacate by the end of May.

Nobody ever asked if we even wanted to keep them on as renters (it was probably obvious that we were buying for personal needs as we were relocating from halfway across the country) but just thought I'd pipe up and say that there is not any requirement that the new owners honor your lease. If there was we would not have ever bought this house because we had 90 days to find a home and move in before our relocation benefit with my husband's company expired.

2bindenver · 05-06-2010, 08:04 AM

The parties can decide to agree to different terms in the written lease. That would be an amendment to the agreement. Happens all of the time.

In your case, maybe the tenant wanted out, or was given free rent, or ???? so they would vacate and not be an issue in your transaction with the seller.

Just because in your case they did agree to vacate, doesn't change the law in Colorado. In Colorado, the lease stays with the property. Rent payments are even clearly stated in the purchase contract.

In the OP's case, they are intending to vacate prior to the lease being changed in writing.

There is usually 120 days being Notice of Election and Demand and the actual sale day before any extensions.

In case of an owner occupied home, there is HB 1276, which will give them a 90 day extension if they comply with the statute.

80skeys · 05-06-2010, 11:37 AM

Landlords are not responsible for your moving costs or "double rent." You're the one who decided to move in and move out, not them. You don't have to move out. You could stay,.

The landlord is responsible for returning your deposit as long as you honor your lease.

I don't see why you don't just stay if you like living in the house. The sale/foreclosure hasn't affected you and may never affect you. It could be a seemless transition from one owner to the next.

80skeys · 05-06-2010, 11:39 AM

Quote:

Originally Posted by jcourtneyii

To JenUlasewich,
To be honest, I can't say that I hold real estate agents in high regard. I'm from Kansas City where in 15 years I have owned three homes. The first two I used an agent to "sell" for me when I ended up doing most of the work. Money not well spent. By the time I sold my third home, I did it by FOB and saved a lot of money & time and found the job rather. . . simple. Therefore, your comment about landlord hassles doesn't hold a lot of weight for me as the last thing I want to do is deal with real estate agent hassles. You earn a lot of money for something any seller can do themselves.

Well put! I agree entirely.