I decided it was time to update and rewarn all Las Vegas Renters and POTENTIAL Renters of the signs that your home you are renting (or want to rent) is in stages of foreclosure.
I perform many BPOs. BPOs are Broker Price Opinions which means banks are just searching for opinions on list pricing for a home. The home may already be foreclosed upon OR it may be in various stages of default or foreclosure. This allows me see trends before they start happening. While I have seen this in the past before, I have seen it way too much in the last week: homes listed for rent that are in default! This means, that if a solution doesn't come about for the owner of the home, the renter may pay all deposits, move in and find themselves speechless and homeless when the home goes into foreclosure.
Here are ways to protect yourself:
Find out when the home was purchased or if it was refi'd (for cash out) during the boom years (2003-2007.) This could help you gauge if the home is upside down and could go into default. This isn't a sure-fire way to protect yourself from heartache soon after you move in as I have seen some neighborhoods and areas have sub-80's pricing. You can see this information on the recorder's website which I am about to give you.
Get the deposits & rents escrowed. Instruct escrow to pay the mortgage payments AND HOA dues rather than relying on the owners to do that. Also instruct escrow that in the event of foreclosure, the deposits and rents are to be released to you, the renter. This will help protect you from the nightmare of having to fight a broke landlord, (who may file for bankruptcy protection,) for your deposits.
This is a tutorial for renters who are curious about the foreclosure status of the property you are renting (or are about to rent).
With the wave of foreclosures in the Las Vegas Area, many renters are concerned if the property they are renting is in good standing or about ready to get foreclosed on. Even if you have been paying your rent or even have a lease option on the property, it is not a bad idea to make it a habit to check on a monthly basis.
It is also a good idea to check prior to renting a home!
Step 1: Go to the Clark County Assessor's office and click on search, under real property records click "address". The reason why you may not want to search by name is that many investors hold title in an LLC.
Step 2: Fill in street number and street name. Make sure you check the box next to "show current parcel number record"
Step 3: Many addresses show up so write down the parcel number next to the address:
Step 4: Go to the Clark County Recorder Home page for "Land & RPTT Information". Scroll to the Arrow and choose "Search Records"
Step 5: Read Terms and Accept (if you accept terms:)
Step 6: Click on Parcel # (for Search):
Step 7: Look for the following:
Lien: Look for liens. Could be from homeowner's association or from master plan. These entities may foreclose on the house!
Breach or Notice of Default: Owner is in Default of their loan. Foreclosure may or may not be in the works. General rule of thumb, if house is going to be foreclosed on, it will happen in the next 3-6 months from recorded date
Notice of Sale or Notice of Trustee Sale: Foreclosure is imminent. Usually 30-60 days from recorded date
Trustee Deed: House is foreclosed on
If your rental home is in default, please consult a real estate attorney prior to breaking a lease or stopping your rental payments!
This post is very comprehensive. Sadly, the agent for a prospective tenant should always research a property for rent before showing.
Alas.
Hi Renee, great information for your readers! It is a shame the process is complicated. Someone wanting to find out this info on their own might not be able to do so. Very nicely laid out!
Hi Renee. Great steps to take in prevention of this mishap. Tenants being blindsided by what is going on with the mortgage of the house they are renting and being booted out is a travesty to say the least.
Great information, as always! This was a helpful reminder, I typically don't get involved with rentals but I am helping a family member out this month, and researching the property is key! I stumbled across 3 rentals that are also for sale as shorts in my market. ALL of them advertised separately as leases.
That's funny you wrote this because I had a client move up there less than a week ago and contact me about this same issue. He's renting and wanted to make sure the home wasn't in foreclosure. It looked safe to me but I'm glad to see your making others aware of the steps to go through to protect themselves.
Renee - THis could be a real shock to find out that you have to leave a home that you have already made a deposit on, and paid rent, Most renters I know don;t have a lot of extra cash around, so it could be a disaster.
Lenn: Or listing for that matter!! This is a rerun because the recorder's office changed their website several months ago. I thought it was worth (with all the rental defaults I am seeing) of a re-do as a public service announcement!. I feel like I am stuck in two years ago or something, this time the tenants are not already in place!
Bob: The mindset of a default is complicated! I am fortunate to see it beforehand by performing so many BPOs!
Gary: No doubt. There are very little safeguards in place for renters.
Lane: NICE (not!) I always want to scream!
David: Escrowing the funds and requiring the mortgage and all payments related to the house threw an escrow company is the best bet (but still not safe!)
Larry: It is usally a disaster. I found one listed yesterday (that is in default) and it listed OAC = all deposits and monthly payment will go up if credit and good employment, rental histories are not there! So where does that leave a desperate renter who just got foreclosed on (a good number of renters since those that can buy are generally buying)? Using every penny to make something work. What will they do in 3-6 months when they are out looking again?
Great information. Its something a renter may not think of before hand.
Great information. Its something a renter may not think of before hand.
Renee, It's definitely a crucial issue to determine before you rent a property. I lease executive homes in Atlanta and have had quite a few folks looking for places that were "foreclosed" out of their existing rental. That's not a pretty picture. Also, another factor related to that is can the owner "afford" to maintain the property. You might get a great rental deal, but with items that don't work. Heating and Air are important components. All the best, Michelle
Great information. I wish we could just go check like that, but we do put a clause in to review to make sure the seller now landlord is current on mortgage payements.
Renee - This is important information for any renter. I wish we had the ease here to check online real time.
You should copy this to the local press. Great feature
Great advice, i have put a clause into my rental agreements that the owner has to keep the home out of default, also i show the tennant where to check and what to and where to go.
Renee - Excellent post! This is something prospective tenants or their agent need to do in our area too. I personally check all these records for my clients.
Hi Renee...Congratulations on your feature...This is good advice for renters in your area to read.
Here if a home goes into foreclosure then tenant has to move, if the Buyer wants to move in, leases are not enforceable with our foreclosures.
Absolutely! It really is not difficult to find out of your Landlord is under a notice of default and it can save you a lot of heartache and money. It is important to remember many home owners think renting their house out is a way of holding off the foreclosure but this is rarely the case.
I found your post to be very comprehensive, and looked up a property I was somewhat familiar with. It was a real eye-opener. I hope lots of prospective tenants find this post!
Did you know that if your rental agreement went into effect before the NED was filed, the renter had at least 3 mos. after a foreclosure to move out? It is called tenant protection act (or something to that effect) and went into effect in May.
Great info for everyone. Ill have to try that out here. Thanks
Anyone who hears or learns of these types of situations needs to refer the tenants to this FEDERAL legislation. They need to respond to ANY and EVERY communication they may receive with a copy of their lease and assert their rights under this new legislation!!
The FDIC has published highlights of the “Protecting Tenants at Foreclosure Act of 2009,” which became effective on May 20, 2009. The law is intended to protect tenants from immediate eviction by persons or entities that become owners of residential property through foreclosure and extends additional protections for tenants with U.S. Department of Housing and Urban Development Section 8 vouchers. It establishes a minimum time period that a tenant can remain in a foreclosed property before being evicted. Tenants must be given at least 90 days notice; tenants with leases must be permitted to remain until the end of the lease, except that a lease can be terminated with 90 days notice by a purchaser who intends to occupy the property.
The new law AB140 that took affect on October 1st, 2009 represents changes in the area of foreclosure and tenants rights. Property Managers are required to disclose, in writing, to a prospective tenant if the property is subject to foreclosure proceedings. Failure to disclose this information can lead to civil and/or criminal penalities for the property manager.
Renee, we still need to connect :)
Renee: This is excellent advice. Tenants need to be careful!
What a good real estate agent you are!! Taking care of ALL, or at least trying to! Having a rental that's about to be foreclosed, or is in default can and does play a sad trick on the unsuspecting renter. GREAT advice on having the rental, deposits escrowed!
Renee,
Getting an escrow and having it make those monthly payments is what this market requires for the tenant's protection. You never know. The new law in effect now in Nevada should be helpful, too.
Renee, as always your information and knowledge of the happenings in the Las Vegas market are the best out there. Keep it up!
Renee,
How frightening; what a domino effect this could create in some scenarios.
This is really great information - and also scary that renters have to look into all of this!
This is excellent information. With so much focus on the risks to the landlord, many do not realize the risks to renters. Rentals have become so complicated - like everything else, there is nothing left untouched in the whole financial meltdown.
I have read alot of stories about people this has happened to. As susan mentioned, there is so much focus on the landlord sometimes people forget to do their due diligence for the tenant!
Great post Renee, I think anybody could follow this and get the information.
Renee...what a great post and I can see some ideas I can pass along to my clients/readers here in the Atlanta area.
It appears our system of checking the Assessors records is much easier...no requirements..you just type in an address and there you are.
I can see me doing these screen captures now....I'll be back in a month!