A foreclosure is not the end of the world for the family that has lost their home to the bank in a foreclosure proceeding. That family can still have a new home, except it will be one that they will be renting instead of owning. Now, they will be dealing with landlord/tenant and leasing issues, instead of issues related to mortgages and escrow balances.
Leasing Your Home After a Foreclosure in Florida
For many Florida homeowners, they have been dealing with a mortgage for many years and returning to a tenant-landlord situation is something that they haven’t dealt with in a long time. Here are answers to a few questions that most foreclosure renters seem to have (remember, these are generalities and your specific situation may be different so don’t procrastinate on asking a lawyer for advice):
1. Can you lease a home for your family before the foreclosure process is completed?
Yes. Many families need to get kids in school or otherwise relocate and this does not coincide with the legal calendar of a foreclosure proceeding. You do not have to wait until your home is officially taken under Florida law by the bank to rent another place to live.
2. How much deposit will we need to put up as security deposit on the rental home?
That depends upon the property itself, the owner, and the property manager. Each deal is different, and some may be happy to negotiate with individuals while others may have set requirements that they will insist be met. Often, those in foreclosure will offer more money in a security deposit to offset the foreclosure on their credit report, for example 2 or 3 months rent as a deposit instead of just one month.
3. Can I rent out my home that is in foreclosure and move to a rental, to try and save my property from foreclosure?
Yes. There is nothing in Florida law that will block you from renting your home out – and if you can get a high enough rent, you may, in some situations, be able to save your property from foreclosure. This strategy may work for some and not others: it depends upon many variables: the property, the rental market, the length of the tenancy, the aggressiveness of the lender, and more.
4. Should you reveal that you are facing foreclosure to your new landlord?
Most Florida landlords and property managers are very, very aware of how hard hit this state has been in this housing crisis and Foreclosure Fraud mess, so the stigma that many assume exists regarding foreclosure simply isn’t there any longer. It is easy enough to note on your application or to attach a letter of explanation that you are going through a home foreclosure – and if your credit report is strong other than for the foreclosure, and you have the income to make the rent, then most landlords probably will not hold the foreclosure against you as a possible tenant.
5. Is It Harder to Lease a Home as a Home Owner Facing Foreclosure Than Someone Is Who a Regular Tenant?
Probably Not, a home owner in Florida that is already going through the stress of a foreclosure shouldn’t worry transitioning to taking on the role of tenant. In fact, many landlords and property managers understand that in the current economy, not only are Florida homeowners who are returning to being tenants just as reliable as those who rent their homes as a standard practice, in some ways the Florida foreclosure victim is potentially a stellar tenant.
Why? Foreclosure victims:
- usually know how to take good care of properties and will continue those pride of ownership habits in their new dwelling;
- they are settled and more mature in their lifestyles and landlords usually won’t be finding these tenants facing police reports or neighborhood complaints for loud parties, drugs, etc.
What Should You Do?
If you are dealing with an issue with the home you rented after a foreclosure, a good piece of advice is to speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.
For more information read:
How foreclosures impact your credit scores, read our earlier post discussing FICA scores
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