My landlord is about to lose the building I am renting an apartment in. My contract is not up until May 2009 and I have paid a one month security deposit when I signed the contract.
He is now going to give up the building either this week or next week. He called me today asking me to make the November rent check out to his name and not the normal corporate name I usually make it out to.
Obviously this is shady. My plan is to have him apply my security deposit toward the November rent.
The question are: 1. What to do if he says no? Can I legally have him apply my rent to the November rent considering that he is holding one months rent and wont be around at the end of the contract to refund my deposit 2. Will having him apply my security deposit toward the November rent avoid a liability if the bank takes over before November?
I’m sure this had happened to others, but wasn’t sure what the best move is.
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My rental agreements specify that security deposits cannot be applied to rent. It is meant to cover repairs and you should get the remainder within 30 days after you vacate the property. (This may vary by state.)
Your suggestions equals to non-payment and he can evict you based on that. I would.
Will he lose the building to foreclosure? Do you know the auction date already? Is it likely that someone will buy it at auction? (You probably cannot answer that without studying pay-for sites like RealtyTrac.com) If it does not sell at auction, then the bank owns it, your lease contract is worthless, but he cannot evict you. The bank can evict you. Will they? I don't know. In cold parts of the country, the bank may be happy to have someone in the house to keep pipes from freezing etc.
If / once the bank has a realistic hope to sell the property, they will evict you.
If the property sells indeed at the trustee sale, the new owner most likely will also evict you (I have).
I have no legal education but many years of landlording experience and also bought at a trustee sale.
I would continue to pay rent at least until the auction happens.
Since you said 'lose' the apartment, I'm going to assume bank takeover. Landlord is wanting to change the payment name and is losing the building, definitely sounds like trouble (take payment and run). If everything was normal, what would it cost you if you were a couple weeks late with rent? I'd give him the run around till you know what's going down. {If assumption is wrong then ignore comments}
If the corporation holding the property is insolvent, then I wouldn't be handing him a check for another month's rent without assurance that your security deposit is still intact. The $25 late fee or whatever it may be is a much better choice than gambling whether or not you're going to get your SD back. I would wait and find out more.
I don't know about the whole security deposit issue, but I know for darn sure that I wouldn't give my rent check directly to him. Then what happens when the Corporation comes after you for back rent and you can't prove that you paid it??
Why assume the worst? Ask your landlord who the new owner is and what is going to happen to you security deposit. If he says the new owner will assume the contract and receive the deposit, then call the new owner to verify. If the new owner contradicts his statements, then you have grounds for withholding next months rent to apply the security deposit as rent. As for the possibility of eviction due to non-payment of rent:
1) it takes time for landlord to complete the eviction process. Presumably, he will lose the building before this happens.
2) you can state to the judge in court that he lied about the new owner assuming the contract and receiving the deposit.
Pakman0209 said:...What to do if he says no? Can I legally have him apply my rent to the November rent considering that he is holding one months rent and wont be around at the end of the contract to refund my deposit....
I hate questions like this because they seem to betray a basic misunderstanding of 'the system'.
Here's the deal: You can do anything you want. It doesn't matter what the contract says, or what's 'legal', or anything else - the only thing that matters is what the other guy may or may not do about it.
People get all sweaty about "can I do this" or "is it legal to do that", and then a buncha barracks-room lawyers start opining about everything under the sun. At the end of the day, the contract means nothing unless the other guy is willing to go to court to enforce it, and EVEN THEN, in the world of tenant-landlord relations, the tenant holds most of the cards.
Simply because your rental contract says you gotta pay by the 5th or you incur a late fee means nothing. If you're nervous about paying - don't pay. If he charges you a late fee - ignore it and keep paying the normal rent. If (as you believe) the owner's in the process of foreclosure, than your failure to pay one or two months is gonna mean nothing. It's all gonna get lost in the noise.
Even if your contract stipulates that the security deposit cannot be applied to the last month of rent, it surely does not indicate that you should make a check personally payable to your landlord. If you don't pay the last month's rent, what is he going to do? You're already leaving the premises and the corporation may very well be insolent. It seems he doesn't have much means of recourse, and taking you to court for November's rent while holding onto your security deposit in the same amount would not be a logical or rational move on his part. Banks are not in the business of being landlords, so when the bank takes over you very well may have to move; if not, they likely aren't going to care what your standing was with the old/present landlord. I say don't pay, ask him to apply the security deposit to November rent, and if he says no, still don't pay.
I would not pay first off. If he is losing the property in a week, he would not take the time to evict you, nor would he because you have until the 4th to legally pay rent (put in place incase there is a holiday or weekend or both). I would wait until the last minute. Plus if he is losing it, you are not likely to get the SD back at all, meaning you just paid Nov. rent with that, or at least whatever part of it you are able to stay.
Like everyone else is saying, find out what exactly is going on.
I'd be very, very careful here - is there a housing office in your city you can talk to? My apartment building was sold midway through my lease to an estate management company, and my deposit disappeared into the ether. If your current landlord won't accept the deposit as rent, then ask him to refund it before giving him his check. Also be sure to talk to the new owners, if you know who they are, to be sure they will honor your existing lease. good luck!
I'd do a little research on tenant laws in your state.
I had a similar situation a few years ago where my then-landlord looked like he might be losing the property, and I did some research. Maryland, where I live, has some very pro-tenant laws, and I think it would have been 30 days minimum to evict, and I think a new owner would also have to honor the lease for 30 days.
If that's the case where you live, and if you are sure that he's going to be losing the property next week, I would definitely not pay him.
swandown said:I don't know about the whole security deposit issue, but I know for darn sure that I wouldn't give my rent check directly to him. Then what happens when the Corporation comes after you for back rent and you can't prove that you paid it??
Bingo. Tell him that you will not change anything unless he tells you to do so in writing.
Send a letter certified mail to him explaining your understanding of the situation.
"You are losing building, but still have my SD. I will pay next months rent to you, then get SD back from you no later than X date. If it is easier for you, I the tenant am amiable to the waiving of the SD not used for rent clause in my lease so that you may use my SD as the last months rent."
Oh, and IGNORE every comment about eviction. You won't be on the street in less than 2 months (unless you leave in a cash for keys exchange).
Why would the landlord give him his security deposit back? If the building changes owners, the landlord is legally obligated to hand over the security deposit to the new owner.
gosocks said:Why would the landlord give him his security deposit back? If the building changes owners, the landlord is legally obligated to hand over the security deposit to the new owner.
What's legal, and what's actually going to happen are two completely separate things. Especially if the corporation is insolvent. What are you going to do, sue them? Take a number and get in line...
I'm located in Chicago. One apartment was sold a year ago, 2 are rented and 3 are not completely built from the inside.
From what I've found the amount of time to eviction can vary. Usually the landlord is not a stickler about getting his rent on the 1st of each month. He has guaranteed that he is losing the building, he said its just a matter of him and the bank trying to agree what to do with his other buildings and personal credit card debt (that he took on to support the building). He also said that the bank plans to hold on to the property because its the nicest building in the area (which it is) and doesn't plan to evict anyone- which may just be lies.
I'm having my contract faxed over and will see what it said. I don't plan on giving him a single cent, but I'm sure he wont be returning my security deposit to me (not sure if it goes to the bank, but I doubt it).
I didn't know if I should just keep giving him the run around for a few days or tell him he has the deposit to use as rent and if he doesn't like it we can discuss the whole personal check issue with the bank...im sure they wont like it.
I wouldn't give him one cent. If you pay him directly, what incentive does he have to give your security deposit back? None, he has both! Simply tell him to use your security deposit as next months rent, or continue to pay the money as you have been doing. Once he looses the place officially, you can deal directly with the bank or whomever they choose to manage the place. Just don't be surprised when the new owners tell you that they want another secuirty deposit cause the old owner skipped town with it.
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