Posts Tagged ‘rent skimming’

Renting Home – Not Making Payments – Illegal or Not?

February 20th, 2012 by Jarad

Question:  I am underwater on my mortgage. A friend stopped paying mortgage and rented his home. He said it was OK as long as I owned home for more than 1 year. Not really OK….just not illegal or criminal. Is this true?

Landlord is trying to collect the rent. Place is up for foreclosure. What should I do?

August 3rd, 2009 by Jarad

Question: My landlord is trying to collect the rent for the month of september 2008 we had a letter put on our door telling us this place is up for foreclosure the auction will be held august 28 2008 i called and told him whats this about he said oh we already took care of all that but i keep calling the phone number thats on the paper all it say is that the auction date was changed to september 29 2008 when i called the place they said yes its up for auction the 29th of september i called a real estate attorney and asked him. He told me to give a 30 day notice and have him keep my deposit as last mouths rent. My landlord would not take my 30 day notice and also said that i must pay this mouths rent and that once i moved he will give me my deposit back. i also let him know of all the things that needed to be fixed from when we moved in not till after i told him about the foreclosure. he start saying oh as soon as they save the house there going to fix every litte thing not to worry and when i told him, well i’m just going to move. he said well you still owe me my rent. then why did i give first and last months rent when i moved in? then he had nothing to say to that all he did was to start threating me tell “you don’t want to mess with me i’ll take you down” also “i know how to take care of you if you don’t pay me my rent” and now today september 13,2008 he gives me a three day notice i just said ok thats fine here’s my 30 day notice that i’ll be moving “he says i don’t want that why would i want that you have three days to get out of my house i’ll be back thursday to make sure your out” i told him you still have to give me a 30 day notice all he said was “no you have three day thats all”. what could I do about this man because come thursday september 18,2008 i don’t know what he will do. will he follow thru the threats. so please help me as soon as possible. should i call the police or what should i do. i am worried i have a three year old litte girl also a 14 month old daughter with a seizure disorder that still dose not hold her head up or nothing she is like a new born chid still what if trys something and one them get hurt please help please

Answer: -listen, this sounds like more than just a rental issue. Clearly this landlords intentions are not good. It sounds like he has already spent your deposit and has no intentions on paying it back. He’s just trying to get as much money as he can from his tenants before they foreclose on the property. In many cases this can be considered ‘rent skimming’ which is illegal. This is where the landlord uses the rent money to pay for personal belongings and lets the property go into default. If he is giving you 3 days to vacate, I would get the heck out before something worse happens, especially if he is threatening you. Let him keep your deposit money a better place to live. And if you feel you need to contact the authorities, do it. Who knows, they may even help you find a better place. Good Luck

I bought a condo in CA. Should I tell the tenants to move? Do I keep making the 80% payments when the payments increase? Should I keep my property manager? Is this considered “rent skimming”?

November 8th, 2008 by Jarad

Question: Here is the situation:
I bought a condo in CA and lived in it for 6 mo, moved out and rented it for the last 2 yrs to a couple who cover 80% of my mortgage.I claim it as income property on taxes. My “interest only” loan caps in 2 mo., then payments increase 2 1/2 times the amount I am paying. I cannot afford this. The bank wants me to do a short sale. The house is worth 75,000 less than the loan. I am not in default yet. Here are my questions: Should I tell the tenants to move, if so legally how many days notice? Do I keep making the 80% payments when the payments increase? Should I keep my property manager? He takes 8%. If I keep 2 mo. rent to refund the tenants their deposit is that considered “rent skimming”?
Concerned Landlord

Answer: – Even if you make 80% of the payment, they will initiate foreclosure unless the other 20% is a 2nd mortgage in which they could initiate foreclosure, but will most likely just write it off and 1099 you for the amount they lost. Depending on how many properties you have now and the tenants you have living in your property, you definately want to consider whether or not to use a property manager. Some tenents you never hear from, others are constantly bugging you in which case a property manager is worth every penny. As for rent skimming, here is what it says under California Civil Code 890…

890. (a)

(1) “Rent skimming” means using revenue received from the rental of a parcel of residential real property at any time during the first year period after acquiring that property without first applying the revenue or an equivalent amount to the payments due on all mortgages and deeds of trust encumbering that property.

(2) For purposes of this section, “rent skimming” also means receiving revenue from the rental of a parcel of residential real property where the person receiving that revenue, without the consent of the owner or owner’s agent, asserted possession or ownership of the residential property, whether under a false claim of title, by trespass, or any other unauthorized means, rented the property to another, and collected rents from the other person for the rental of the property. This paragraph does not apply to any tenant, subtenant, lessee, sublessee, or assignee, nor to any other hirer having a lawful occupancy interest in the residential dwelling.

(b) “Multiple acts of rent skimming” means knowingly and willfully rent skimming with respect to each of five or more parcels of residential real property acquired within any two-year period.

(c) “Person” means any natural person, any form of business organization, its officers and directors, and any natural person who authorizes rent skimming or who, being in a position of control, fails to prevent another from rent skimming.

You may want to see if you can resolve this with your tenant and let them know of the situation, at least that way they know what’s going on.

Can you legally rent a home to someone knowing your home is in foreclosure

August 13th, 2008 by Jarad

Question: Can you legally rent a home to someone knowing your home is in foreclosure

Answer: -That’s pretty much considered rent skimming, which is illegal. Where you are using the rent money from the rental for personal use and not applying it towards the loan. Maybe you can get away with it if you disclose to the renters that the property is in foreclosure, you’re not planning to make any payments, and they’ll have to move out when the bank forecloses on it. Do a search online for “rent skimming” and you can make your own decision on it. As for me, I’d stay away from it.

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