Wednesday, January 12, 2011

Foreclosure, part III - they gotta go, sorry.

I purchased a townhouse at the 2010 tax foreclosure auction, and I've written about the purchase and my initial visit here, and a few weeks later I wrote another blog entry about it here.

I've been wrestling with whether to rent the unit to the previous owner or not.  I worked out an agreement that allowed them to stay through the holidays for no rent, and today was the day I needed to make a decision. 

I've decided not to rent the townhouse to them.  The primary reason is that I'm fundamentally uneasy extending credit to someone who's willing to walk away from their obligations.  There really isn't any reason to go into more detail there, that's the basic conclusion I came to. 

If I'd had this couple come and fill out an application, and the credit report came back with a foreclosure, that would pretty much be it when considering them for tenants -- there are plenty of good tenants that don't have that sort of black mark on their records. 

Yea, it's not an easy path, but I'm betting that there's a good chance of future problems, and might as well deal with it now than put it off any longer.  


Anonymous said...

Let's hope you have an easy time trying to get the tenants and their belongings out of the house. You might want to bring the Sheriff along with you. Good luck.

Dave said...

I agree with your decision, especially as you know the history and reason for the foreclosure. However I would not be so quick to throw everybody with a foreclosure in their history into the same boat. Many folks find themselves in that situation and have worked hard to try to overcome the problems of the recent past. I have read many stories of folks who were working with the banks thinking they were making progress only to have the bank pull the rug out from under them.

Anonymous said...

Keep us updated about how this goes. I have been a landlord for more than ten years and have so far avoided having to take legal recourse to convince a tenant to leave. So I am very interested to hear what you run into on this.

Tennant landlord law varies a lot from state to state, so it would be interesting to hear how the specifics there play in your situation.

It would also be illuminating to hear about any costs that you run into, including how much of your time it takes up.

Jason W. said...

It may not be easy - hire a lawyer and have them do it properly. While it can be done without a lawyer, if you screw up, you generally need to start over. With a lawyer, they have the checklists and timelines, they (should) have experience with evictions, know exactly what's required legally, and if they screw up... they should have malpractice insurance.

It'll cost more financially, but save time and headache in the long run.

Bruce King said...

I agree. If you're going to have to evict a tenant you should be using either an eviction service (who has an attorney and plenty of experience) or an attorney who specializes in this.

In this case, the legal advice I was given was to offer them $500 to be out by a certain date, with the house in good condition. If they they do vacate, you've saved a few hundred on the cost of an actual eviction, and it gives them some incentive not to tear the place up.

Robin said...

That is a good idea (the $500 dollar thing). I hope it all goes well.