Posted on: 12th Apr, 2007 10:33 pm
i bought an investment property about six months ago. the property is rented but i still can't afford the mortgage payments because i lost my job. what would happen to the tenants if decide to do a deed in lieu of foreclosure?
Welcome Alberto,
Don't be sad to have lost your job. Keep trying to get back to your work life again.
If you decide to do a deed in lieu, you will not be able to keep the home. But the tenants must have signed a contract with you. Due to violation of the contract, you may have to pay them a certain amount.
I can understand it may difficult for you but then you can explain them your situation, give them some time, so that they can find out a new home and then pay them off a certain amount.
You can make a legal agreement stating that you will be able to pay them a certain sum of money.
Don't be sad to have lost your job. Keep trying to get back to your work life again.
If you decide to do a deed in lieu, you will not be able to keep the home. But the tenants must have signed a contract with you. Due to violation of the contract, you may have to pay them a certain amount.
I can understand it may difficult for you but then you can explain them your situation, give them some time, so that they can find out a new home and then pay them off a certain amount.
You can make a legal agreement stating that you will be able to pay them a certain sum of money.
Hi Alberto,
The affect on tenant is completely depending on the agreement between you and tenant and between you and your lender and also state laws.
Generally, if investment property borrower looking to foreclosed the property then it will not affect the tenants.
If the property gets foreclosed, then you need to refund the security deposit to the tenant or transfer the amount to the new owner (in your case it will be lender). The new owner will have to honor the contract between you and your tenant.
But I suggest you it will be better if you can have a clear talk with him and explain the situation. Then if he wants to continue the tenancy he can. Or, he can look for new home. But that case you need to refund his security deposit money.
Thanks
The affect on tenant is completely depending on the agreement between you and tenant and between you and your lender and also state laws.
Generally, if investment property borrower looking to foreclosed the property then it will not affect the tenants.
If the property gets foreclosed, then you need to refund the security deposit to the tenant or transfer the amount to the new owner (in your case it will be lender). The new owner will have to honor the contract between you and your tenant.
But I suggest you it will be better if you can have a clear talk with him and explain the situation. Then if he wants to continue the tenancy he can. Or, he can look for new home. But that case you need to refund his security deposit money.
Thanks
Alberto, from what I have read, tenant will have to go, http://www.abanet.org/rppt/public/realestate/foreclosure.html
Hi Brolsma,
I did not get any information related to foreclosure in case of investment property from the article referred by you.
Over here, Alberto has an invetsment property. So is it applicable in case of investment property too.
I think the information you shared is applicable for a normal property. Please let me know your view points.
Thanks
I did not get any information related to foreclosure in case of investment property from the article referred by you.
Over here, Alberto has an invetsment property. So is it applicable in case of investment property too.
I think the information you shared is applicable for a normal property. Please let me know your view points.
Thanks