The foreclosure crisis is something we can’t get away from if we tried. It’s on the television each night, in the newspapers and discussed actively online each and every day. And everyone’s got an opinion about the cause and the cure. But I’ve been writing on a different type of crisis, very much related to the foreclosure crisis, yet seldom discussed.
It’s the predatory renting crisis I first talked about in November of 2007 and I am both happy and sad to say more news is coming out on the topic.
Predatory renting, at least as I define it, is when a landlord executes a rental agreement with a renter and:
1. Fails to disclose the property is in foreclosure or in default to a renter
2. Has no means of fulfilling the contractual agreement with their renter because they know the property will be foreclosed on before the rent or lease term expires
3. Accepts rent but fails to pay their mortgage deliberately (rent skimming)
4. Fails to give renters sufficient notice of a change in ownership that may require the tenant to move
In passing conversation with other industry professionals I’ve heard it thrown around that waves of commercial foreclosures often come after waves of residential foreclosures. Today, the LA Times ran a story on low income families that are being kicked out of apartment complexes because the apartments are going in to foreclosure.
Source: LA Times
Boarded up apartment buildings have become common on impoverished city blocks while emergency shelters are swelling with mothers with children.
“The doors are busting down with people with this problem,” said Mercedes Marquez, city housing general manager. “And the wave is still coming.
In Los Angeles, neighborhoods in the city’s low-income south and central areas are being walloped. In 2007, buildings containing a total of 1,690 apartments were foreclosed on. In 2008, owners lost buildings containing 4,789 apartments, according to the city housing department.
While I may be a victim of predatory renting, I don’t see myself having to go to a homeless shelter if the property I rent is sold at a foreclosure auction. However, when the doors of homeless shelters are bursting at the seams with mothers and children, all victims of predatory renting, an immediate and rapid response has to come.
What can we do to deter people from rent skimming? Should the Attorney General lock people up that displace renters? Should apartment building owners be held liable for helping families get in to a new living situation paying for a deposit and a month or so of rent? Should Realtors, like the one that I rent from who skims on the property I live in have their licenses permanently revoked? I answer YES, YES and YES!
The Attorney General of California should immediately address this concern. I will continue to post blogs on this topic until something is done and make sure that predatory renting is taken just as seriously as predatory lending.