Author Topic: Looks like the owner is getting Foreclosed. Advice/Experience/Input desired! AZ  (Read 3264 times)

Slow2FIRE

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Hello,

Just received a certified letter this morning of trustee sale for the house we are renting.
We live in Arizona, Pinal County.

Our situation:
1.  Renters with a 3 year lease due to expire June 2019
2.  Property management is through Renter's Warehouse
3.  We have never actually talked to the owner but understand through our pool guy that it was a married couple that moved out upon divorce.

Since this will probably go through foreclosure - what do we need to do?
A.  Ideal perfect situation is that we get to break the lease at no fault (no blackmarks on our record no additional rents due).  We want to walk away and find a new home to rent.
B.  Does anyone have any clues on whether the contract with the property management company can typically be broken when the house is foreclosed on if the foreclosure sale processes?  I think the answer is yes.  I understand I need to review the Arizona landlord and tenant handbook along with carefully reviewing the lease.
C.  How long do these processes take?  I figure I have at least 30 days to find a new home, but if it takes up to 6 months, that is fine too.  I just don't want to get a notice one day that I have 14 days to vacate because there is a new owner.
D.  I clearly need to talk with Renter's Warehouse and deliver this letter to them to get it to the owner.  Anything I should ask them? 

TIA for reading and responding!

sokoloff

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Make sure you know the amount and status of any deposits that you originally paid and determine the disposition of those.

SwordGuy

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See if you can put a lien on the property for your deposit, any pre-paid rent, and maybe even fees to cover moving since the owner is breaking the lease.

It's worth a try!  (And report back what you find out!)

Kroaler

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Tough to answer.   Up until December 2014 you were protected with the right to stay in the property... However thats not your goal. 

To be honest, I would call the property management company with your question.  They may have no idea about the property going to a trustee sale and can also answer your question.

Your deposit should be sitting in their escrow account still.

Another Reader

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Was the letter addressed to you or the landlord?  Normally tenants are not notified.  If you opened a letter addressed to your landlord...

Call the property management company on Monday.  Deposits are supposed to be in a trust fund.  Likely the buyer will have to honor the lease.  And give the management company the letter if it was not addressed to you.  That letter may be the notice of the trustee's sale.

Another Reader

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In Arizona, property management companies hold deposits in trust accounts.  They used to be able to disburse them to the owners, not sure if they can do that now.  In your shoes, I would make a copy of the letter and note the date received.  I would deliver the letter to the property management company and document the delivery.  Ask them if they have your deposit in a trust account.  They should have a canned speech about what happens to you in the event the house is foreclosed.  They have been around long enough to have gone through quite a few.

Your lease should specify to whom you pay rent.  It's likely the property management company.  It's their responsibility to disburse those funds, not yours.  You should remind them in writing of the water damage that you have tried to get fixed.  You want your deposit back.

Depending on the response, you may want to contact an attorney that represents tenants.  Wait until you have talked to the management company before doing that.

Sorry you are going through this and that your landlords are irresponsible.

Another Reader

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Have the conversation with the management company and get as much information as you can.  The most important information is who holds your deposit.  If you received the notice of trustee's sale, it should contain a lot of important information, including the date of the sale.  Also the amount due, IIRC.  If the amount due is higher than the market value, the servicer of the loan will likely be taking the property back on behalf of the owner of the loan.

Once you have gotten all the information out of the property management company you can, then would be the time to call the attorney.

MommyCake

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I wouldn't spend $200 on an attorney yet - that seems premature.  Deliver the letter to the management company, and let them know that you would like to be let out of your lease without penalty due the foreclosure.  See what they say - they will probably say they need to talk to the owner and get back to you.  The foreclosure process generally takes a long time, sometimes years, and often the sale date gets pushed back multiple times.  But, since you don't seem to want to stay, simply ask to leave.  There is a chance that with the low rent plus pool cleaning, they may be okay with letting you out of the lease.  They can actually still legally rent to someone else, even with the foreclosure proceedings. 

Another Reader

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Deed of Trust is what you mean.  I own property in Arizona, so I am somewhat familiar with this.

I think your reading of the law is not reflective of what happens in most cases.  Most trustees sales get postponed a couple of times for various reasons.  In most cases, the highest bidder is the loan servicer, on behalf of the owner of the loan.  Fannie and Freddie did not kick tenants out during the foreclosure crisis, and they owned the bulk of the loans.

Have you talked to the management company?

Dicey

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Talked to the property management company (a customer service rep).  Wasn't as bad as I experienced previously - only had to call back twice, but actual hold wait time was less than 5 minutes.

The landlords (homeowners) hold the deposit.  Except they changed that policy this year.  So the customer service rep claimed that if I had signed a lease last year, they would have had the money transferred from the homeowner to the property manager and it is in an account earning interest. I did not get the feeling that he was 100% positive that this would be the case for us, but that he strongly believed it should be the case.
Please call back and talk to someone else, preferably the owner of the PM Company. That bolded sentence is scary. This is no time to rely on feelings. You want the answer in writing. If they aren't holding your deposit, there's a good chance you will lose it unless you can figure out some pre-emptive action.

Also not sure how this could trash your credit. The proceedings are between the LL and their lender(s).

Another Reader

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Someone at the PM company should be able to look on a computer screen to see your account and if it includes the rental deposit.  If they can't answer the question, you can report this to the DRE.  The DRE oversees property management companies as well as licensed brokers and agents.  PM companies are required to keep monies in trust accounts.  The DRE is strict with management companies and audits frequently for violations.

revisednut

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I work for an investment company that buys non-performing mortgages nationally, so deal with this type of matter quite often.  As previously stated, AZ is a non-judicial foreclosure state (no formal court process, a trustee handles the notice of default and foreclosure action.)  I'd look up the owner's name in the land records and contact them directly, and ask some pointed questions--most importantly "Do you intend to enter into a payment arrangement with the mortgage servicer, or file bankrtupcy to stop the sale?"--this can help you gauge how much time you may have, depending on how forthcoming the owner is--PM company will probably be relatively useless here.

I'm not sure your odds for getting deposit back, but standard industry practice is to over $1500-$5000 (depending on value of the house), for the occupants to vacate 30-60 days after the foreclosure sale, leaving the house in "broom swept condition".

I'd negotiate best you can and turn this into a blessing on the way out.