The Miami Herald recently published a story regarding the lawsuit filed by Bank of America against Everglades on the Bay. This story was extremely informative to us; as a brokerage specializing in luxury rentals we are constantly seeking great deals for tenants while trying to ensure a safe and secure community for the tenants.
Apparently Bank of America filed suit against the developers of Everglades on the Bay; this motion entailed the banks effort to seek dismissal of the communities chapter 11 case. The bank was claiming that the developers rental program would diminish the value of the property which is the collateral for the loan; therefore, endangering the banks position. There were also some accusations regarding the developer’s sub-standard practices in screening the tenants; thereby allowing persons with criminal backgrounds to enter the community. This second accusation (screening practices) was apparently found to be unsubstantiated. The judge also found that the property was not losing value due to the rental the program.
In a nut shell the developer was rewarded the case and will (at least for now) be able to continue it’s chapter 11 bankruptcy which will allow for re-organization and actually pay back a good portion of the debt it has incurred. The developer may also continue to rent unsold units. In addition, the bank may have opened themselves up to some liability; the developer may now seek to recover funds “for any extraordinary damage caused.”
Everglades on the Bay is a 49 story, two building luxury condo community located on northeast second street and Biscayne Blvd. This community is very attractive and with 849 condo units of which only a fraction have sold you can only assume that the develper will be offering attractive incentives to buyers as well as tenants. If you are in the market for a primary home (buying or renting) or perhaps a nice investment property be sure to consider this property as one to place on your roster to view.
As foreclosures have increased in recent years; tenants have found themselves to be major victims of lack of information and much frustration. We hear the same story all the time; “I have been paying my rent and now I come to find out that the landlord has been pocketing the money and not paying the mortgage and now they are in foreclosure”. Naturally, this brings up many issues and questions. First, is the landlord in breach by not paying the mortgage? Second, can the tenant break the lease? Third, what about the security deposit the tenant may have placed with the landlord or perhaps advanced rents paid to the landlord?
These are all valid concerns that a tenant may have and the reality is that the tenant is usually the least informed in such an instance. Well, it looks like finally there is some relief for tenants in this exact situation.
In the past landlord / tenant issues have been governed solely by The Florida Landlord Tenant Act ; however, recently a new law was passed to address specifically tenants in a foreclosure situation.
The Protecting Tenants at Foreclosure Act became effective on May 20, 2009. The new law has several aspects to it and although I am certainly not a lawyer by any means and am not interpreting the law I would like to point out some of the obvious aspects which may be of use to a tenant in this situation.
1. The law will require the purchaser of a foreclosed property at the actual foreclosure (this could be the bank or another party) to give a tenant a 90 day period in which to find a new property to live. This certainly alleviates a ton of pressure and the fear of getting “kicked out” of your home.
2. If the tenant has a written lease the bank that foreclosed must allow the tenant to live out the lease term and in essence become the landlord; unless the home is sold to a new buyer who actaully wishes to occupy the home as a primary residence. In which case the 90 day to vacate clause would kick in. Again, this is a nice peace of mind for the tenant.
Some practical advice for prospective tenants when looking for a property:
1. Check public records for any “Lis Pendens” or action against the property you are considering prior to signing a lease agreement.
2. Know exactly where your security deposit is being held.
3. Use a licensed real estate professional when locating your lease property.