Wednesday, May 13, 2009

Renters feel foreclosure pain

From Gothamist:

Under current state law, you can be paying your rent on time every month, and one day come home to find that you've got less than 10 days to vacate your apartment because the landlord defaulted on the mortgage. State Senator Jeff Klein says nearly 600 New York City tenants are being evicted every month because of foreclosures, and they're usually the last ones to know about it because banks are not required to inform them.

Yesterday Klein held a press conference at City Hall to urge the State Assembly to pass a bill that would force banks to give tenants a heads up that their homes have been foreclosed on, and permit them up to 90 days to relocate. Speaking to reporters, Klein said, "These are people who paid their rent on time, played by the rules, maintained these properties - and one day they wake up and a marshal is at their door ready to evict them." Klein's bill passed in the State Senate on Wednesday by a 37-24 vote.


PizzaBagel said...

10 days to relocate? 90 days? I'm admittedly naive about this, but why should the renters be forced to move at all? The new owner of the property, be it the bank or whomever, should honor the leases currently in effect. Case closed. (BTW, I'm a renter.)

Anonymous said...

Most apartments do not have leases at all. They are "month to month" tenants. Rents are usually seen in stabilized or rent-controlled buildings, but small landlords such as the owners of two and three family houses are not required to provide a lease and rarely do.

Believe me people are in this situation. I know a clerical worker with a baby in this exact position and she recently lost her job as well.

Snake Plissskin said...

Every rental space should have an offical lease that is filed with the city.

This would curb not only this abuse, but illegal conversions and community damaging transients.

How about it, Tony?

Anonymous said...

Hey they should just stay there and have the banks take them to court to evict them.

Anonymous said...

None of you get this pice of feel-good-legislation aimed at vote getting. If tenants are paying their rents, then the owner is likely not going into foreclosure. this proposal is to protect the non-rent paying tenants, the sec. 8'ers, the welfare calss from becoming the homeless class. more machine politics at its worst!

Anonymous said...

That's not true. Your mortgage (especially a subprime one) can be thousands of dollars above rent income on a 2-family house. If the owner lost his job, then I could see a lot of rent paying people suffering.

Anonymous said...

"If tenants are paying their rents, then the owner is likely not going into foreclosure."

Um, you are a bit naive. There are landlords who are collecting rent but do not make payments on their mortgage for whatever reason. If that were not the case, there would not be this discussion. The renters are not apying the banks directly, they are paying their landlord.

Anonymous said...

Um, you are a bit naive.

No I'm not. I've been in the forecolsure business for some time now. Certainly there are instacnes of a few landlords who own big, shitty, rent stabilzied buldings who take what they can and then split. But as susual, the legislature attempts to cram a one-size-fits-all and pander to the masses. If I buy a two or three (legal!) family house, it's becuase I want the rent to pay my mortgage. I'm not going to destroy my home to make a few short-term bucks. There aren't as many of the former situations as the pols and the media would have you believe.

Anonymous said...

Rarely do rents cover the mortgages

$700K mortgage with tax is $6,500 month

2 3-br apts can get about most $1,800 each

3 3-br (impossible) get a total of only $5,400

Anonymous said...

I know alot of people who bought houses to rent and went bankrupt

The highest percentage of bankruptsies in the 5 boroughs occurs from non-primary residences, meaning absentee landlord

Anonymous said...

Why own a home with a mortgage to rent.

You have to claim the income on the taxes (and deduct payements I assume too) which can put you into Alternative Minimum tax.

Also when you sell it you have to claim the whole sale as income, without minusing what you bought it for because you claimed the mortgage payment as expenses to offset the rent.

So that $700,000 house can only will be taxed at 33% for a $233,333 tax bill

But I assume these landlords break the law and don't claim the income and deduct the mortgage interest too!

Anonymous said...

Let me give you an example of how a rent-paying tenant can be involved in a foreclosure.

My friend, who paid rent, was the tenant of an illegal-alien homeowner who returned to his native land for a funeral. He was unable to get back to America, the property went into foreclosure, the American citizen renter is now negotiating with the foreclosing bank to avoid homelessness.

She paid the rent to relatives of the owner, God knows what happened to the money.

Anonymous said...

A homeowner/landlord collecting rent from a tenant renting in the private home often do not use the rent they collect to pay the mortgage, for a variety of reasons - most involving greed. More recently the homeowner's themselves have been victims of predatory lenders. However, tenants do have rights and can get time to move, if they go to court when they get their eviction notices. It is not hard, and there is free legal help for low income people through legal aid, legal services, many law school clinics and other non profits.

As to the blogger who tried to give tax implications to becoming a landlord. Please refrain-you got most of it really mixed up.