I rented from a homeowner in Coronado who couldn’t afford to pay for repairs on essential items like toilets and the stove. He got increasingly nasty because the rent checks (minus repairs) weren’t covering his mortgage payment. He bought in 2000 so he should have been okay, but he admitted that he had a lot of debt. It took me 5 months and a lawyer to get out of the lease. I rent a house through a management company now, and I am much happier. I would be hesitant to get involved personally again. My homeowner-landlord ended up getting emotional and caused me many sleepless nights.
bmarum, this is a solid concern. I discussed my landlord’s intentions before I signed my lease. He is a professional real estate investor since he started buying foreclosures in San Diego in the early 1980’s and has deals in various US cities and in Mexico. He seems very savvy, but could be overleveraged; how can one ever really know another person’s finances? So we put a clause in our 2 year lease that says if he is foreclosed, he reimburses us for some costs.
Before I signed my 2 year lease, I consulted with tenant attorney Steven Kellman. He explained if this house is sold, the new owner must honor the lease. If this house is foreclosed, my fate hangs on the layering of lease vs. loan: the most recent wins. If the lease was signed, then he refinanced, the lease is in effect despite a foreclosure. If the lease was signed after his last refinance, a foreclosure means I am booted too.
But Mr. Kellman told me if we need to move for any reason to break our lease, or a foreclosure or anything happens, we should stop by to see him, and he can help us out. This guy is as passionate about tenant rights as I am about the housing bubble.
Any renters out there, jot down this link for the Tenant Legal Center. It is a low cost legal service, so expect to be treated like just another of their low income clients, but once you get in to see Mr. Kellman, he gives you all the time you need. The guy knows tenant rights, is energized about it, and really nice. And he doesn’t even know I keep recommending him, unless for some reason he found piggington.
It sounds to me like the owner is telling of his financial woes as a means of improving his future negotiating strength or position. Although this could easily work the other way, letting someone know that you are losing money can sometimes make it easier when you raise the price, or rent in this case.
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