Leasing concerns, help needed maybe real estate attorney.

SigSaurP229

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My wife and I are having our 2nd child in 10 days, up until 03/01 we lived in a 2 bedroom apartment which was fine, however with a new baby we decided that we needed to upgrade so

On 03/10 we located a condo, and signed a lease paid a deposit, for the condo to be ready for move in on 03/25/12 as we had found a new renter for our apartment and that new renter needed to move in exactly on 04/01. On 03/10 he took the check to my bank and cashed it.

On 3/20 I called the landlord at the condo and was assured in would be ready on 03/25

On 3/23 I called the landlord at the condo and was assured it would be ready on 03/25 so I went ahead an provided him with a rent check for the first week and month. So I am now at $700 deposit and $700 first month rent +$125 for the week.

On 03/24 I get a call no way is the condo going to be ready on 03/25/12 will be ready by 03/29 so I can at least begin moving my stuff and have it completely out no later than 04/01 and get the old apartment clean so I can get my damage deposit back.

03/29 I get a call from the condo owner, no way is the apartment going to be ready by 04/01. I request a refund on all monies paid to this point. Landlord says I do have a compromise I have a house vacant and it is ready now I will rent it to you for $850 per month, but the electricity will be included because my shop is behind it.

On 03/29 I agree to take the house and sign a New Lease agreement. I take the lease to the water department and have water and cable turned on in my name. We love the house it is by far the nicest place we have ever lived.

On 04/20/2012 I pay rent for the month of May in full in advance.

On 05/01/2012 I am enjoying my front porch at about 10 am in the morning, when a vehicle pulls in the driveway. The gentleman introduces himself as L*** from ****** Bank. L tells me I am looking for the tenants in the house I introduce myself. He says I am here to inform you that we at ***** Bank actually own this house. Your Landlord doesn't and he has a lease agreement with us that plainly states NO SUBLETTING. We have sent you Landlord a notice of violation of his lease and have voided it in its entirety. L says we would like to enter into a lease agreement with you or sell you the house. I tell "L" well I am really shocked at this point and very confused, I need to talk to my wife and can we set up a meeting with him, so I can get all of my paperwork together, and review it all. I talk to my wife and set up a meeting at the bank with "L". Meeting was set for 05/04 at 1:30

(The house was a bank foreclosure had been vacant prior to my "landlord" leasing it).

On 05/02 and 05/03 I went and did a title search on the property ***** bank does actually own the property not my "landlord". I get my copies of the lease agreement with the "landlord", I get copies of my cashed checks that I paid for rent.

On 05/04 We meet with "L" from the bank, he tells my wife and I the bank has no intentions of throwing us out on the streets. Which is a good thing that of course the bank would love to sell us the house they don't want to carry it anymore they have had it since 2009. From my research and talking to real estate agent the bank bought it back on the courthouse steps for $175,000. So real estate agent says go in and offer $140,000 80% of the cost to see if they will short sale the house out, in the mean time we need to get to work on a lease agreement. We leave the bank not overly comfortable with how things went as there was no resolution in writing other than we want to sell you the house which of course what bank wouldn't, and the bank was nice enough to send out a locksmith to rekey all of the locks, so that my wife myself and the bank would have the only keys.


On 05/06 The "Landlord" calls and says he and his wife just split up and he is bringing all sorts of stuff and leaving it in the driveway and shop, and that the electricity is actually in his wife's name and will probably be turned off tomorrow. I immediately called "L" at the bank on his cell phone at 9 pm on Sunday night. He made a few calls and had someone from the bank call we amazingly have electricity still today. Not that I would mind having electricity in my name but I can't turn it on in my name without a valid legal lease saying that it is to be on in my name which I don't have from the "landlord" or from the bank, so if the electricity gets turned off I am screwed.

On 05/07 I had a brief conversation with "L" this morning no news and supposed to call when something changes.


So I have a few questions for my friends here.


1 I see it as this I have permission from the bank manager to be on the property, but I have nothing legal in writing so as I see it my family and I are basically squatters do I have any rights at all?

2. Am I liable to pay back rent to the bank since I have already paid the wrong person.

3. Since they have voided the lease with the landlord does he have any rights to be on the property at all?

4. I am pretty sure I could go to the electric company and show them my lease with the "landlord" and they would turn the power on in my name how much trouble could I get into if I did this?

5 Can the "landlord" have me evicted for any reason? I have upheld my lease with him to the letter.

6. Is there anything I can do to keep him off of the property?
 

Tempelton

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Re: Leasing concerns, help needed maybe real estate attorney.

First let me preface this post by saying I am not a lawyer, but did study law in college so I would not take what i am telling you with as 100% accurate.

1. I am unsure of the laws regarding squatters where you live but I would have to say the bank would be the ones that would have to be the ones to initiate any legal recourse as i see it regarding your post.
2. You might be liable to the bank for back rent but you could also take the "landlord" to small claims court to get your money from him since he could not legally enter into a leasing contract with you.
3.Since the bank voided his lease I would imagine that he has no legal reason to be on the property unsupervised. The only thing I could see would be a police supervised session to remove his personal property from the building.
4. Unfortunately the lease you entered into with the "Landlord" is not legal because like I stated earlier he had no legal standing to enter into said contract. Due to his non-ownership of the property and his previous lease agreement expressly forbidding such a contract.
5. Due to the above reasons I see no reason that he should be able to evict you.
6. the only thing i think would about his presence on the property is to contact the bank and see how they would like you to handle it if he comes around. They might tell you to call the police if he shows up.

With all that being said here are a few things i would do to try to help your situation and ease your mind

1. Do not pay the "landlord" any more money, instead open a different bank account and make your monthly rent payments to that account. So that way you have the money ready to pay the party who legally gets it when the time comes and you have documentation of the funds in case you are required to produce them.
2. I would call "L" and ask for some sort of legal letter stating that you have the right to be there during the dealings with a new lease and possible short sale.
3. I would try to get as a part of the lease agreement that the monthly rent you are paying be applied to the price of the house.
4. also as a side note short sales can take a few months to be approved.

I hope this helped and I hope someone comes along that provide a lot more information and advice. Good Luck
 

MTboatguy

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Re: Leasing concerns, help needed maybe real estate attorney.

I am not going to offer any advise except, first thing in the morning, secure an attorney that knows the laws in the state you live in.

I do offer my sorry, this these things are happening far to often now a days.
 

Fishing Dude too

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Re: Leasing concerns, help needed maybe real estate attorney.

I would make an offer to the bank of $85,000 and 30 they write a fixed rate morgage at market terms. They may counter offer or accept it.
 

tomdinwv

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Jun 22, 2008
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Re: Leasing concerns, help needed maybe real estate attorney.

Sig, I can offer no advice on your house/lease situation (other than get a lawyer quick) but congrats on your soon to be born second child.
 

joed

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Re: Leasing concerns, help needed maybe real estate attorney.

What happened to the condo deal? Is that completely done? My impression was that the house was just a layover until the condo was ready.

I also agree you need a local real estate attorney.
 

BuzzStPoint

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Re: Leasing concerns, help needed maybe real estate attorney.

The previous landlord has no legal ground to uphold the lease you signed with you. I either was invalid from the beginning or now voided from the bank. A for your previous costs.. If the lease was invalid from the get go, you are entitled to get your money back. Might have to take him to court over that one... Put your next "850" into a different account (Not at the same bank) and keep putting that in there till you either get a lease or mortgage papers from the bank

Here is your chance to get the property at a nice discounted rate.
Call the city/county and see what the latest assessment amount is. Then call a Realtor and see what they would sell it for. Are you getting it for a bargain? Is the property worth the 175k?

I dont know the rental market by you, but if you are paying 850 a month, and have no plans on leaving the area, you should be looking at home ownership anyways.

You may have some bargaining chips with the bank. 1 You are already there. 2 it's true, the bank doesn't want the house, it costs them money to hold on to that property. 3, forclosure, the bank already lost money. And that can also be a downfall. Sometimes if the house/property is well below the fair market value, they wont be very flexible on the purchase price.
 

Chip Chester

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Re: Leasing concerns, help needed maybe real estate attorney.

First thing to buy is your lawyer, of course.

But on the pricing, keep in mind that the bank won't have to pay commission to an agent, advertise it, "insure it" (although they're probably self-insured on this stuff) or pay for any upkeep if they sell it to you. Plus, it moves from the middle of the 'gotta go' pile to the top of the 'gone' pile... all good for them, because all that stuff costs money. So don't be shy about your offers... it's a negotiation, after all.

Be prepared for drama in clearing out the shop, though. You know not to trust anything the guy says, so be firm about exit dates for him, and don't hesitate to call the sheriff to back you up. I imagine there are private security folks for hire, too (legitimate ones, that is) that can oversee his ultimate exit.

More drama than you wanted, of course, but it seems you like the place, and the bank is cooperative so far, so keep a positive attitude and look for ways to make it work best for you.

And be thankful that a house can't sink at the dock...

Chip
 

SigSaurP229

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Re: Leasing concerns, help needed maybe real estate attorney.

The wife and I have given a great amount of thought to purchasing the house, this house could never be purchased as an investment property, it is only a viable option to live in for minimum 20 years. The construction style of the house is all custom, and it is beautiful the nicest place I have ever lived. The prime factor in real estate being location, the house is surrounded by mobile homes.

The house itself according to tax appraisal is worth 221,000 the bank bought it on the courthouse steps at 175k we actually made an offer of 140k based on the advice of a real estate agent was to offer 80% of what the bank bought it at auction for.

This house is constantly referred to as the mansion in the trailer park, and the property around it significantly detracts from the value. The bank currently has it listed on their website for 189,900 but I can get foreclosures in this area easily for 120k-130k so I am not actually sure that this house is a good deal. I love it because it has a 3 bay garage deattached from the house with central heat and air in it.

This house is my dream house there is no doubt about it and if purchased we would plan on living there until both children are grown 20 years, but at the end of 20 years I would want to sell and I wouldn't be able to get what the house is worth. The mortgage would also be on the very top end of our budget. The house even in foreclosure is priced above Fair Market Value.


The condo deal is done he has finished and rented that unit from someone else I signed a 1 year lease agreement on the house.
 

BuzzStPoint

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Re: Leasing concerns, help needed maybe real estate attorney.

"on the very top end of our budget"

This raised my eyebrow...
My wife and I looked at many houses.. Must have been 20 or so before we found on we liked.. 3rd house in was our "Dream House". Sellers were not flexible (3 sellers - estate sale). But we had to keep looking. Found another but was too expensive on our budget.. We could do it, but it would have been tough.

You don't want to be house rich and cash poor.
Look up the tax data on the house. There you should be able to see previous owners, and what they bought the house for.. Is there a trend of selling it at a higher rate?
 

southkogs

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Re: Leasing concerns, help needed maybe real estate attorney.

Congratulations on the BABY! As to the property, I've got a little bit of experience leasing both apartments and homes but I'm not an expert or a lawyer. I also think you're in Tennessee, correct? I'm going to answer based on that assumption:

1 I see it as this I have permission from the bank manager to be on the property, but I have nothing legal in writing so as I see it my family and I are basically squatters do I have any rights at all?
Consider yourselves "guests" of the bank who owns the property. Your lease is void, so the bank essentially has you in a verbal contract month to month lease. They can terminate that verbal contract at any time and standard fare is about 45 days notice, but I think 30 days is common as well. They can also evict at any time, but that process takes about 90 days and is pretty formal. By considering yourselves guests of the bank (while everything gets sorted out), you'll be prepared.

2. Am I liable to pay back rent to the bank since I have already paid the wrong person.
The answer in TN I think would be "no" for the moment, based on the information you provided. The bank hasn't given you a rent amount verbally or in writing. You could challenge a claim to rent in court based on that. HOWEVER, it is common and accepted that rent get's paid to a landlord for residing in their property so a ruling might be that you should have some reasonable expectation to pay rent. What I would do (personally) is stop all payments to the original landlord, and begin the process of getting your money back. He's guilty of fraud at this point (I would think) at least, and the amount is over $1,000. You might even talk with the DA about getting the authorities involved if the original landlord doesn't want to return your money.

I would also start setting aside a reasonable amount (whatever you might estimate rent to be) to cover any back charges that the bank (current owner) might require. You could challenge it, but you might lose.

3. Since they have voided the lease with the landlord does he have any rights to be on the property at all?
No. In fact since the lease is invalid, make sure you deny him entry rights which he would have had via the lease he wrote (or should have). BUT, only on the residence. Don't get too crazy trying to enforce that on the shop or the property. Document every move he makes on the property, but don't get too involved. You're a guest of the bank. Ask if they'd like you to monitor what he does or lock up the shop or whatever ... but let them make the calls.

4. I am pretty sure I could go to the electric company and show them my lease with the "landlord" and they would turn the power on in my name how much trouble could I get into if I did this?
No clue how much trouble, but if you've currently got power don't do anything. The bank likely will not cut power to the house. We've got two foreclosed houses in our sub and they keep the power on those to keep the temperature stable.

5 Can the "landlord" have me evicted for any reason? I have upheld my lease with him to the letter.
What lease? ;) It was invalidated by the real property owner and a fraud to begin with.

6. Is there anything I can do to keep him off of the property?
Leave that to the bank for the most part. However, you can ask the bank if you ask him to leave as he (not being the owner) is technically trespassing on their property.

The house itself according to tax appraisal is worth 221,000 the bank bought it on the courthouse steps at 175k we actually made an offer of 140k based on the advice of a real estate agent was to offer 80% of what the bank bought it at auction for.
Depending on where you are - I might even shoot a little lower and let things counter offer back up. Again, assuming TN - real estate is in better shape than most places, but not what it was 5 years ago. Depending on the bank and on the house, there are still some sweet deals out there. Play hard ball a little, but be nice about it.

Best to you, and your family +1.
 

SigSaurP229

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Re: Leasing concerns, help needed maybe real estate attorney.

Thank you all so much for your advice and assistance. The hard part about buying the house is that the house was just built in 2007 it is only 5 years old, the original owner had the house until October 2009, then the bank took it in foreclosure. The property has been owned by the bank since Oct 2009 it has not been bought or sold since. So I am really having a hard time coming up with a suitable number. According to all of the calculators and the bank on our income we could potentially go up to 220k on a mortgage but 140k is the top end number my wife and I feel comfortable with.

We are also looking at putting in about 25k in cash to come out of the 140 to put us at 115 where we are really comfortable.
 

Chip Chester

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Re: Leasing concerns, help needed maybe real estate attorney.

This would be after he takes ownership, (which logically would be the only way he's worrying about clearing the guy out, rather than the bank.) I didn't state that, though. Chip
 

Boomyal

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Re: Leasing concerns, help needed maybe real estate attorney.

Keep in mind that when a foreclosed house goes up for auction on the courthouse steps. the minimum bid is computed based on all of the bank's costs and charges. The 'bank' doe not really expect the house to sell at auction. It is primarily a method for the bank to gain full title to the property.

If the bank 'bought' the house at that auction it is because no one else offered the minimum bid or higher. At that point the bank buys the house to become the owner of record. It is not then uncommon for the bank to put the home on the market for a considerably lower amount.

Case in point, a house two doors down from me was foreclosed on. It went up for auction on the court house steps for 244k. There were no bidders so the bank 'bought' the house, finally evicted the occupant, then put the house on the market for $165K. The home finally sold for $192K because it was in a good neighborhood but unlike the house you have leased, it was in great need of repair.

The moral of the story is that houses rarely sell on the courthouse steps because they are overpriced.
 
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