Q: First of all, I adore your radio show! I drive rental cars for a living, and I listen to you each and every Sunday.
Our problem in a nutshell, however, is that our apartment complex was foreclosed on this past February, and we are all fearful we will be out in the street. The bank has stepped up to the plate, and hired a phenomenal property manager, but, since the complex is half full, and since half of them are deadbeats, and since the previous owners who defaulted left a water bill to the tune of $30,000, we are all genuinely concerned that we will be out in the street at some point in time.
If I understand what I read in the Georgia Landlord Tenant handbook, they have to give us 90 days notice if they are going to close the place down. Also, I guess technically we are all tenants at will because the leases we signed are from approximately four owners ago.
My husband and I would love to move, but, we would rather continue with our debt snowball and finish paying off the plastic. If it matters, we have excellent credit.
Do we need to be worried about getting evicted? (It seems funny to even write that word.)
A: Here’s the good news: It doesn’t seem to us that the bank would be inclined to get rid of the few tenants it has that are paying rent.
The bank should and will proceed to evict those tenants that haven’t and won’t pay their monthly rent payments. But if you’re paying on time, you should be safe for a while. As you have seen, the lender appears to have hired a good property manager to put the property back into shape, get rid of tenants that aren’t paying rent and get the property ready for resale or lease.
What the lender wants is to recoup the amount they put into the property. They don’t want to be a landlord but would rather have someone else buy the property from them and get the property off their books. To do that, they need more tenants like you.
Once they have rented out the other units, shed the non-paying tenants, and stabilized the property, they will seek out other buyers for the apartment complex. Once they find one, they will transfer title and management of the complex to that new buyer.
For now you should be safe, but the new buyer of the property may want to increase rents, if possible, or could decide to convert the building to condominiums and sell them. Either of those scenarios would mean trouble for you.
Given, however, what’s happened to the condominium market in many parts of the country, the new owners will probably opt to keep the building as a rental building. You might have to sign a new lease and agree to a higher monthly rental rate. At that time, you could decide to move on and perhaps even qualify to buy a home of your own.
Keep us posted and tell us what happens with the building. Thanks for your kind words and keep listening.