Dec 7, 2007 5:07 pm US/Eastern
Renters Beware, Foreclosures May Affect You Too
MIAMI (CBS4) ―
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Many residents renting in Downtown Miami apartment buildings such as this one are weary that foreclosures might force them out.
CBS
When Tamara Rutter moved into her new downtown apartment, she couldn't wait.
"We we're so excited," said Rutter. "It was our first place together."
But things quickly changed with a knock on her door.
"She handed me over a huge stack of papers and said you are being foreclosed on," said Rutter.
Tamara may have seen it coming if she owned a condo, but she rents. It was shocking for her.
What happened to her is happening across South Florida. Despite rents paid on time, landlords can't afford the mortgage, often double what they are renting for. Tamara had 60 days to move out while they foreclosed. She held back rent, in essence getting her deposit back.
"It sort of felt even, but you go through the headache and being told to move right then," she said. "It was like a panic and frustrating."
The building Tamara moved in by all accounts looked like any other downtown high rise, but The Club at Brickell Bay has a secret many people don't know--dozens of units are in foreclosure. Some even call it ground zero for South Florida mortgage fraud.
"I see what's happening in this building could very well happen in some other buildings," said realtor Evan Goldman.
Goldman specializes in renting units. He says the club at Brickell Bay is now, in a way, blackballed by renters worried about foreclosures.
"If someone is interested in it, I will obviously give them as much information as they want, but tell them to be quite cautious," said Goldman.
So what happens to renters caught in the middle of a foreclosure?
Your contract dissolves. You have to sue to get your deposit back. It begs the question, where is your protection?
"If you're a tenant, the government doesn't want to encourage protection so much, because they want to get these renters to go out and actually buy homes--to realize the American dream," said Solomon Genet, of the National Title Insurance Company.
Genet is a real estate attorney who sits on Miami-Dade County's Mortgage Task Force. He believes renters are in a new era. They have to look out for themselves.
"All renters know that the landlord checks them out before they sign the lease, the tenant or the potential tenant should check out their landlord before they sign the lease."
And a way to do that for free is by going online. You should check property taxes, civil lawsuits, and make sure the unit your looking to rent isn't already in foreclosure.
Tamara learned her lesson and put that into practice this time around.
"It's happening to a lot of people," she said. "And I think that the best thing now is to pay attention and be as knowledgeable as you can."
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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