The Tenant Against the Predatory Renter/Realtor

dsc_0234My predatory renting saga continues…

As many of my readers know, I am a renter in foreclosure. Meaning, the home I am leasing for my family and I is in foreclosure.

My landlord, Sherry Mc Coy (who happens to be a California Realtor) is taking my hard earned money that I pay on time every month and she is DEFINITLEY NOT paying Washington Mutual (her mortgage company).

Welcome to what I have dubbed, “predatory renting” and have been writing about for about the last year and a half  (first blog post in Nov. 2007).  AKA “Rent Skimming.”

Real estate flippers and investors are apparently renting their homes, not paying their mortgage and skipping out of town with their renter’s cash and security deposits. Leaving unsuspecting tenants to suffer and be kicked out on the street, often with only 72 hours to vacate and move their belongings.

Rental scams involving properties in the foreclosure process are rampant at present. In these scams, owners facing foreclosure will offer renters lease agreements for less than market rents with a rental term that exceeds the time the property will be in the name of the buyer. Many of these renters received foreclosure notices on their doorstep less than a month before homes are sold at auction. The victims of these rental scams often lose not only their home but also their initial deposit.

How do I know this about my home that I am renting?

Well, the field representatives who happen to be my landlords colleagues (ex-Realtors) that work for WAMU come knock on my door once per month and ask me if I am going to make a payment. Apparently they think I am Mr. Mc Coy and this is his primary residence.

In case my readers do not know what that means, it most likely means that the Mc Coys possibly committed mortgage fraud when they purchased this lovely home in Corona by stating on their loan applications that this is their primary residence.

This week the interaction between my predatory renting landlord/Realtor reached the boiling point.

I am flat out refusing to keep paying this woman who I feel is rent skimming and operating a fraudulent rental business (AKA rent ponzi scheme). I know she has 3 other properties that she may be doing this on. It’s sick and I needed to make a stand against her.

I told my landlord/Realtor that I was going to start paying the rent into a neutral rent “escrow” account, and the moment they could provide me official documentation showing the foreclosure had been terminated, I would turn over immediately, all funds accumulated in that escrow account. The landlord went ballistic, calling me multiple times after I hung up on her.

She now has threatened me with a 3-day Notice to Pay Rent or Quit.

I again told her that she will no longer recieve my money until she can prove she is paying WAMU and that she can prove that she is not in forerclosure.  She needs to understand this is now about self and family preservation as well as doing what is right. I am going to protect my family and self and I will do what is right.

What is right to me is standing up against this scam and woman. I guess what is right to her is taking my hard earned money under the presumption she is paying the mortgage and living off the money. What I call a scam, she may feel is her “legal” right and her only way to survive (since real estate sales have dried up) is to scam me and WAMU.  Plain and simple.

Later in the day I received a call from a wanna be lawyer/legal consulting firm. The guy tried to strong arm me by saying I have no rights, no case and I need to pay. Apparantely they will have another thing coming when I get that 3 day pay or quit notice. 

I will fight for what is right and I will document this here on my blog. They are dealing with a man who is unafraid of their legal threats and deals with these type of scammers EVERYDAY!

My rights in California:

Even if your city has no specific legal protections in place, understand that the State of California has a law, signed by Gov. Schwarzennegger last July, which requires the foreclosing lender to provide at least 60-days notice to move to the tenants in occupation, BEFORE they are allowed to start a legal eviction.

If your property is in foreclosure:

You need to find out when the action started, and determine about how much time remains before the foreclosure concludes. You might consider doing as I am doing, and refusing to turn the rent money over to the landlord’s greedy, grasping hands.

Rather accumulate a move-out fund by depositing the rent into a rent escrow account that you can open in 15 minutes at your favorite bank.

With the economy and housing market in the horrendous shape they’re in, there’s more than enough pain and misery to go around. By taking proactive steps to protect your family’s ability to maintain a roof over your heads, you should be able to remain in the property for another couple or three months, and in that time, hopefully, locate and pay for more secure new housing.

PLEASE BEWARE OF PREDATORY LANDLORDS!

Moe’s past blog posts on predatory renting:

First let me disclose that I am a “renter” and my investor/landlord/Realtor is being foreclosed on

November 10, 2008

“I love LA!” Well, at least their new policies in regards to tenant rights of recently foreclosed homes. However, let me disclose that I am not from Los Angeles, I …

Cook County Sheriff Takes Stand Against Predatory Renting

October 9, 2008

In an op-ed piece in the Chicago Sun-Times explaining his decision, Sheriff Tom Dart said that “too many times,” his deputies have arrived at foreclosed properties to find tenants who …

I must confess: I am a renter and my landlord is being foreclosed on

August 8, 2008

I have now officially become a “victim” of the foreclosure crisis. I don’t own a home, I do not have a mortgage and the ironic part of this is that my job actually …

Predatory Renting – New Yorker Renters May be the Next Victims of The Foreclosure Crisis

July 2, 2008

Certain homeowners and investors seem to be collecting rent from unsuspecting renters and forgetting to send their mortgage payment to their lender. I like to call this new unfair and deceptive …

Predatory Renting

November 20, 2007

The perfect crime is being perpetuated across America and there seems to be no laws or any way to prevent it.A new scam has been born with the advent of foreclosure boom. …

California Rent Skimming Law:

(a) A seller of an interest in residential real property who
received a promissory note or other evidence of indebtedness for all
or a portion of its purchase price secured by a lien on the property
may bring an action against any person who has engaged in rent
skimming with respect to that property.  A seller who prevails in the
action shall recover all actual damages and reasonable attorney’s
fees and costs.  The court may award any appropriate equitable
relief.  The court shall award exemplary damages of not less than
three times the actual damages if the defendant has engaged in
multiple acts of rent skimming and may award exemplary damages in
other cases.

(b) A seller of an interest in residential real property who
reacquires the interest from a person who has engaged in rent
skimming with respect to that property, or a law enforcement agency,
may request the court for an order declaring that the reacquired
interest is not encumbered by any lien that is or has the effect of a
judgment lien against the person who engaged in rent skimming if the
lien is not related to any improvement of the property and does not
represent security for loan proceeds made by a bona fide lien holder
without knowledge of facts constituting a violation of this title.
The motion or application shall be made with at least 30 days’
advance written notice to all persons who may be affected by the
order, including lienholders, and shall be granted unless the
interests of justice would not be served by such an order.

 (c) A mortgagee or beneficiary under a deed of trust encumbering
residential real property may bring an action against a person who
has engaged in rent skimming with respect to that property as one of
multiple acts of rent skimming, whether or not the person has become
contractually bound by an obligation secured by the mortgage or deed
of trust.  The mortgagee or beneficiary who prevails in the action
shall recover actual damages to the extent of the amount of the rent
collected on the encumbered property and attorney’s fees and costs.
The court also may order any appropriate equitable relief and may
award exemplary damages.

 (d) A tenant of residential real property may bring an action
against a person who has engaged in rent skimming with respect to
that property for the recovery of actual damages, including any
security, as defined in Section 1950.5, and moving expenses if the
property is sold at a foreclosure sale and the tenant was required to
move.  A prevailing plaintiff in such an action shall be awarded
reasonable attorney’s fees and costs.  The court also may award
exemplary damages; it shall award exemplary damages of at least three
times the amount of actual damages if the payments due under any
deed of trust or mortgage were two or more months delinquent at the
time the tenant rented the premises or if the defendant has engaged
in multiple acts of rent skimming.

 (e) The rights and remedies provided in this section are in
addition to any other rights and remedies provided by law.

 (f)  Rent skimming is unlawful, and any waiver of the provisions
of this section are void and unenforceable as contrary to public
policy.

   (g) Sections 580a, 580b, 580d, and 726 of the Code of Civil
Procedure do not apply to any action brought under this title.


19 Comments

19 Responses to “The Tenant Against the Predatory Renter/Realtor”

  1. Tony Orlando says:

    Hello. I was reading someone elses blog and saw you on their blogroll. Would you be interested in exchanging blog roll links? If so, feel free to email me.

    Thanks.

  2. Tony Sena says:

    I can completely understand your position but you might want get legal advice before with holding rent.

    Just like your landlord, you signed an agreement stating you would pay a certain amount of rent over a period of time. She signed an agreement with her lender that she would pay a mortgage payment over a specific amount of time until it is paid off.

    Unless you wrote in the lease agreement that your monthly rent payment would be held in an escrow account and it would be released contingent upon your landlord paying her mortgage payment every month?

    The Lender can’t just go and take her home back because she stopped paying her mortgage, they have to go through a legal process. I am sure you would have to do the same but again, I am not an Attorney just stating you should get legal advice.

    Either way, her actions are not ethical!

  3. Brad Sperring says:

    Moe, I am very surprised that you’re seemingly trying to incite renters out there not pay their rent if they know, or even suspect, their landlord is not paying their mortgage. That is totally wreckless.

    You’re putting your family, and potentially thousands of other families, in legal jeopardy. Your landlord’s contractual agreement with her bank has literally NOTHING AT ALL to do with your contractual agreement with her. If that’s what she’s doing then it’s not morally right, there’s no doubt about that, but you deciding to act as judge and jury is not legal. It feels right yes, but it’s not legally right.

    If your contract has been breached then there’s a legal system in place for you to remedy that situation. If not, then you’re no better than her by withholding rent. That’s what she’s doing to her bank, and now that’s what you’re doing to her.

    Why don’t all of you with car loans through GM Motor Credit stop paying your car payment because you know they’re not paying their creditors? Sound like an intelligent thing to do?

    Doing this will do nothing more than get you and your family kicked out on your butts and probably sooner than you would have if you didn’t withhold rent. Don’t confuse your legal obligations with those of your landlord. They ARE NOT RELATED.

  4. Moe Bedard says:

    My intentions here are not to be judge and jury, but to have the right to have my case heard in front of a judge who can tell me what my rights are.

    I have sought legal council and as such with loan modifications, you speak with 10 attorneys and you get 10 different answers.

    As far as my family getting kicked out on our butts, at least I will have stood up for what I feel is right and I do have back up plans for that since my landlord is in foreclosure and it is either the judge, WAMU or? who will be kicking us out soon….

    What about my $7,500 security deposit? I am sure once I get foreclosed on its gone right?

    I’ll stay and fight.

    The foreclosure saga continues!!!

  5. Rich says:

    Hey Moe; it almost sounds like you should consult with an attorney; especially if you are convinced your landlord plans on robbing you of your security deposit. State laws vary sometimes; maybe you could legally stop paying. Also; I know this is a longshot but is there any possible chance that your landlord might be fighting to get a loan mod and will keep the home if the bank helps her; or are you 100% certain your landlord has decided to simply walk away? On a sidenote; thanx for your fantastic site; both the forum and your daily news updates.

  6. Moe Bedard says:

    I have spoken to many attorneys and have obtained many inconsistent answers. I feel that my only recourse is to let a California judge decide……. Thanks for the kind words :)

  7. Brad Sperring says:

    You can’t defend youreself before someone attacks you because that’s assault. Similarly, you can’t withhold rent because you think she might not refund your deposit or that she’s not paying her mortgage. That’s YOU breaching a legally binding contract. She’s breached nothing UNTIL she’s breached something. That simple.

    On Rich’s point – What if she’s working out a deal with her bank (modification, etc) and ends-up keeping the property? Man-o-man, she could have a legal case against YOU to keep your deposit for breaching the contract so wilfully. The only lesson you’re teaching here is how to get sued tout suite.

  8. Brad Sperring says:

    “(d) A tenant of residential real property may bring an action
    against a person who has engaged in rent skimming with respect to
    that property for the recovery of actual damages, including any
    security, as defined in Section 1950.5, and moving expenses if the
    property is sold at a foreclosure sale and the tenant was required to
    move.”

    Read (d) very closely people. For the recovery of ACTUAL DAMAGES. UNTIL she has breached the contract and you, Moe, have suffered quanifiable monetary damage, she has not breached ANYTHING.

    You’re setting yourself up for a fall Moe. I’m telling you straight-up brother that this has a good chance of back-firing on you and anyone else who does this.

  9. Julie says:

    Moe, Please contact me I have a few questions I’d like to ask you as I am in the same boat

  10. Rosie Greer says:

    Hello,Im a single mother of four,who is renting a home in forclosure.I don’t feel it’s fair to me in my family that the owner rent his house knowing he is in forclosure.There calling demanding rent.Now he is saying he is going to do a quick sale on the house.He also states I WILL BE RECIEVING A THREE DAY NOTICE.

  11. Rosie Greer says:

    HELLO,IF ANY ONE CAN HELP ME OR PLEASE JUST ANSWER MY QUESTIONS I WILL GREATLY APPRECIATE IT..

  12. Ohio Landlord says:

    Tenants do not understand that they are not co-purchasing the property with the landlord, and as such, should have no expectation other than the landlord fulfills on his/her part of the lease agreement. The landlord takes on the entire credit risk of the non-payment, and this becomes even more likely should tenants not pay. The top reason tenants give for renting is not having “all that responsibility.”

    I often find tiresome when tenants make the law up in their own head as to what they “feel” is fair, not knowing that there are many reasons why the arrangement in which they have agreed is deemed legally equitable.

  13. kurt says:

    Moe be careful before you breach your rental contract with the owner. You have agreed to pay rent each month for you occupancy of the property, if you fail to pay you could be evicted, and could be liable for the cost to evict you and your family. It is NOT a defense for you to say “the landlord is not paying so i do not have to pay”. your obligation to pay is Not related to the landlords obligation to pay.

  14. Moe Bedard says:

    I understand what you are saying. I ended up just moving and not paying her for 2 months which equaled my security deposit which she didnt have and had spent. So, essentially she was in breach of the lease agreement and I was also. It was a rental stalemate. Now, I am in a better home, in a better location and my family is much happier. So, maybe this was all meant to be.

  15. tish says:

    I am in the same situation thank you for your story.
    These landlords are so selfish and mean,they should let the tenants know whats going on. But they do not have a heart so they go through hard times it is screw everyone, they do not care if you have children or not. Heartless landlords.

  16. david says:

    If you have been doing this for a year and a half now and you rent, then why would you not have already found yourself another place to live? Do you like the drama?

  17. Jack says:

    It seems like renters are forgetting the the ultimate responsibility for everything is on the owner. The owner in many cases had to pay closing and put down money when they bought the place and are loosing already. Seems like those people on here pointing the finger and talking about how things are not fair, are themselves the ones who are trying to get a free ride and get something out of it. Renters do not own anything, you rent either because your credit sucks or you do not want to buy or do not have the cash to buy a house. This person is writing this article as if they are the victims and has been doing it for a long time. You do not own. You obviously know what is going on and you have known for a while, get another place if you can or is your situation just as bad and this is really the pot calling the kettle black? If the property is in foreclosure as many of you are stating then that means that the bank has taken possession and the owner does not have title to the property anymore. Your fight is with the bank, not the owner who just lost. Drama queens!

  18. joe says:

    hi
    we signed a two year lease in May 09 and figured out in October that the landlord stopped making his payments just after we moved in. we notified him that we would not be making any more payment until he could so that he was in good standing with the bank. at that time the monies (our rent ) would be released to him from our escrow account. i am now being evicted and get to go and sell the case to the judge on the 11th of this month … any last minute words of advice?????

  19. Seal Beach says:

    Is the landlord still past due? He may be trying to get a mod so that he can keep the house. There are a ton of issues here. You need to talk with the guy and try to mediate before court.