San Diego Housing Bubble News and Analysis

Don't pay him tomorrow, red flag for early rent pick up. He's likely upside down so it's doubtful he will have to sell it to you, it's almost not his anyway. He can file eviction paperwork if you don't pay, just keep records of the nod in case he tries to put a lien against you so you can rent again. My advice, run for the hills, move, advise him your security deposit will be your last months rent, don't give him more money, figure out what day makes you even and notify him in writing you will be out that day. Don't take anything for free but don't risk anything and rent somewhere else. Been there, done that, still have the t-shirt.

Don't say this often but ditto.

The other option is to get the deposit back now and explain you will pay rent to him on a weekly basis.

Remind him of how hard it will be to evict when he is not the owner. You really have nothing to fear here. Just need to work out the deposit with this dude. Honestly, if you can get the deposit back it is to your benefit to stay. The bank will offer you cash to move once they own the place again.

I wouldn't trust this landlord and don't buy from him. But you are on a lease with him. Personally, I wouldn't pay him but it is against the law and you will ruin your credit down the line.

I forgot to mention we have four young children and I don't want to have them move again. Stability is more important. I contacted his bank and they are willing to work with me directly and sell the home to me directly at fair market value. what do I dow ith this "rent skimming" landord in the mean time?

P.S. There is an addendum to my lease that states he can not put the house on themarket for sale while we occupy the property. it also states that he must offer me the home first at fair market value if he elects to sell it.

lol! You don't have to worry about him selling.

Just find another place nearby, OR just put up with the sheriff knocking on the door. The kids will love that.

The odds of you buying the house at fair market value now, are slim to none. If you have cash, you can maybe pick it up at auction... a long shot.

The most prudent move for you is to look for a better rental deal while time is on your side. When you find it, give your thirty day notice on your current place and state: that because the house is in foreclosure you will use your deposit as last months rent etc.

If you can afford to buy the house now, why would you want to pay fair market value for it? You could probably buy a nicer house in the neighborhood for less than fair market value.

The landlord is not rent skimming. He legally owns it until he is foreclosed on at the courthouse. There are landlords in San Diego that have multiple properties in foreclosure that are doing the same thing. My former landlord is one of them. Bad Karma... YES! Illegal... no.

Yeah, it's still your LL property. Their behavior is not kosher, but not illegal either.
Start looking for another place and let the lender know of this situation. They may have some good advice. And they may give your LL a little heat. Karma's a beootch.

Your children will find stability in solid parents, not a house. Also - how do you expect to maintain stability with such a landlord ? Lastly - do you really think this idiot who is upside down is going to honor his obligation to sell you the house? And you have to go through a short sale process? What a mess.

Seeking stability around a flake is just not wise.
Find stability elsewhere.

Get out, get away. Break the lease. If he says he'll sue, tell him you'll call the bank and tell them he has been cashing rent checks.

One other thing - a little instability is good for the kids. It teaches them to be flexible. Likely, they will deal with the instability better than their parents.

You could also tell him you'll pay the rent three days early if he brings a new month-to-month rental agreement.

peterb

You are wrong. Rent skimming is illegal. California Civil Code 890

edited to add
891(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.

Sure it's illegal, that's not the valid question. The issue is "Is the LL committing an act of 'rent skimming'" ?
For more accurate definition of 'rent skimming'.

So, have they owned it less than a year? If in fact they did take ownership in 11/07, then, yes, it is 'rent skimming'.
------------------------------------------------

Civil Code 890
890. (a)

(1) "Rent skimming" means using revenue received from the rental of a parcel of residential real property at any time during the first year period after acquiring that property without first applying the revenue or an equivalent amount to the payments due on all mortgages and deeds of trust encumbering that property.

(2) For purposes of this section, "rent skimming" also means receiving revenue from the rental of a parcel of residential real property where the person receiving that revenue, without the consent of the owner or owner's agent, asserted possession or ownership of the residential property, whether under a false claim of title, by trespass, or any other unauthorized means, rented the property to another, and collected rents from the other person for the rental of the property. This paragraph does not apply to any tenant, subtenant, lessee, sublessee, or assignee, nor to any other hirer having a lawful occupancy interest in the residential dwelling.

You are quibbling over semantics. You were wrong.

I didn't care to post the entire code. My point was it was illegal and there were penalties for rent skimming. Of course good luck getting your money. As my father always said you can't get blood out of a turnip.

I absolutely know it is illegal. I put the dates so everyone who needed it understood the facts.

He wants his rent check and i am talking about putting it in attorney trust until he pulls it out of foreclosure. I know it is going to piss him off. Why can't i file a suit against him for rent skimming, put the money in trust, call the bank and tell them I want the house and I am not leaving.

Well ok i already called the bank, they are a small one fortunate for me and mad as hell at this guy and plan on filing fraud on him after the forclosure also. So the bank is sending someone to put a number together to give me a sale price. BTW bank told me not to pay him... but that was not their legal advice!

Now that i am talking to the bank... do i still have to dead with mr. skimmer?

The question is can you find some legal assistance/renters advocate?

In Google try "tenant legal aid" with the town, and call them... They should have a rent escrow... while things are worked out.

Don't forget to "make friends" with BPO Agent that comes out to value your property!

Sorry I am not up on abbreviations what is BPO agent? I already had an appraisal done. I don't know what mickey mouse antics this guy pulled but when he had it appraised in nov it was appraising for 120 over market value then. Now it has drop 170k in seven months.

Is there anyone else to make friends with and is it in my best interest to try and be friendly with the LL

If you want free LEGAL advice I would go to the University of San Diego legal clinic. They have law student there who are supervised by an attorney and they can give you a better idea as to your legal options. Google USD legal clinic

He wants his rent check and i am talking about putting it in attorney trust until he pulls it out of foreclosure. I know it is going to piss him off. Why can't i file a suit against him for rent skimming, put the money in trust, call the bank and tell them I want the house and I am not leaving.

Don't tell the bank that you want the house and you are not leaving. They will feel they have a lock over you. You will not get a good price. Instead you should notify the bank of what is going on and get ready to move.. for real. Tell them that you are willing to purchase it for a good price but they need to move. Give yourself a timeline and if the bank doesn't move in time or asks too high a price.. move!!

Kids don't need stability in a house. They need stability in family relations. The stress of this unknown is worse than just moving for them.

two migraines later, I am beginning to agree that this is not worth the drama.

My other thought process was to tell the LL hey look I won't sue you for the rent already plus damages times 3 if you don't file a UD, collect more rent or try to evict me. i thought it was a win- win but my husband said it sounds like i am threatening to sue him. My thought is quite the opposite. Leave me in peace I will leave you in peace. Of course for the trouble and the fact that i paid a HEFTY deposit... i am not leaving until they put that note on the door.

does that offer sound threatening or am I naive to think that he might possess an ounce of common decency.

So are you suggesting that in exchange for not suing the LL, he would let you live there for free? Sounds like the two of you deserve each other. Karma indeed.

BPO- Broker's Price Opinion I think. They send someone to give them an estimate of what a broker would put it on the market for- as opposed to an appraiser. If you're planning on purchasing come hell or high water, pay the rent and buy the place. That's what you were originally planning on anyway right? Withholding the rent (while totally understandable and desirable) has potential ramifications that you don't need, if indeed you're going to purchase. I'd only stop paying the month of the trustee's sale. But it would still irk me about that deposit you're not going to get back.
Negotiating I'd look for a win win win. Bank wipes a bad loan off, you get a house, landlord gets out from under a bad deal (and without any more of your money) Don't know if there is one, but maybe you can think of one.

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The rent is rather inexpensive so that was not really the issue. We are prepared to continue paying it.

So No I am not, trying to skirt the rent but the concern is by hiring the attorney and putting it in escrow he is going to play all his little games. I am going to have to deal with him because we decided we do want the property. I was just trying to think the way he thinks... I guess I stink at it.

The rent is rather inexpensive so that was not really the issue. We are prepared to continue paying it.

What "games" are you worried the LL is going to play? If you want to rent then pay your rent. If you want to buy then go buy. At the very least you should admit to yourself that you are looking for an angle (AKA "game") to play yourself. "Oh, but its for the children." That is BS.

This same scenario came up before except the renter did not have the money to pay the rent and then justified not paying rent because the landlord was rent skimming.

I don't see how the relationship between the bank and the landlord have anything to do with the relationship between landlord and the tenant. You contracted for a place to live and you have a place to live.

Now if you have a down payment and feel that you could potentially lose that, you might mitigate that loss by withholding a month payment. I guess I am with jonnycsd. Seems that all you want is a cut of the action at the banks expense.

If you are going to set up a trust and are willing to turn the rent over to the bank then I will ammend my statement.

I am just going to throw this out here, but you could sublet it.

Maybe that's evil but it could be funny.

Kind of like Dick Cheney.

Thank you for all your comments.

The rent was deposited into a attorney trust account today (yes sat of a holiday weekend.. Very nice attorney). We hired the attorney to protect future rent from loss should the property foreclose and we need to move. At this point we have elected to not sue for damages from his rent skimming because we have not been forced out.

As I stated before we have the legal obliation to pay him but at the same time he has the legal obligation to provide the domicile for the full legnth of the contract. Since that is in jeopardy the best thing was to "escrow" the money since we ar enot ready to move yet.

He will receive it if he should cure the loan (as it was explained to me). Should he not cure the loan then the judge determines who gets what.

Thanks again for all the input.

That seems like an excellent solution and very professional way simplifying what cold otherwise be a complicated situation.

That was a smart move from several standpoints. It tells the LL you are paying rent, and he'll get his due if he does the right thing. It tells the bank and LL you have someone to negotiate on your behalf for an interim solution. Finally, it shows you cannot be pushed around by empty legal threats by either of the other two parties.

One last note... We agreed to withdrawl the sept rent from escrow and pay to him in exchange for him signing the short sale offer. We have already been in contact with the bank so (small investment bank- easy to get through to negotiator) looks like we will own this property in about 30 days.

the rest of the rent is being escrowed should there be a hold up with the sale. No one gets any money until the transaction is complete. Once we own the house he gets any rent monies due.

On a personal note... I think the law that allows LL's to collect rent on a foreclosing property with no intent to resolve the loan is pretty crappy. That law should be changed.