Dangers Connected With Leasing Homes During Periods of Increasing Unemployment and Foreclosures


Many people and companies leasing a home require a credit or background check. With the current increase in bankruptcy and foreclosure rates, the lessor may need to demand the same credit and background check from their potential landlord.

A background check should include credit checks, criminal records, partial or total real estate property transfers or sales, outstanding legal judgments, outstanding hot checks, multiple drivers licenses, multiple names, more than one passport, ongoing personal and corporate bankruptcies, past bankruptcies, past lawsuits, current lawsuits, and tax liens. This background check can extend to include the loss of medical and legal professional credentials. Look carefully at records for multiple drug arrests and driving under the influence of alcohol. Never assume that a person holding professional credentials is ethical.  My previous real estate experience gives me pause to understand that even judges and ministers can behave in unethical and illegal ways in their personal real estate transactions. Do not assume that any profession is exempt from bad behavior.

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Realtors may provide the lessor with a false sense of security. Realtors usually serve as a buffer and eliminate or reduce any problems for either side of the lease transaction. Unethical landlords can also victimize realtors. A lease in an expensive neighborhood may require deposits up to ten thousand dollars or more. There may be additional deposits for garage apartments or pets.

My experience leasing a home in Austin will illuminate several of the issues that can arise. My lease required a large security and pet deposit for a lovely home in one of the best Austin neighborhoods. A prestigious well-respected Austin real estate firm handled the leasing of this home. Initially, the landlord failed to make repairs that were agreed upon as part of the lease agreement prior to move-in. The Austin Tenants Council provided guidance to move out of the property. I did not follow their advise due the time and expense. Do not move into a rental property where the agreed upon repairs have not been made. This home later went into bankruptcy court in Texas when the landlord filed bankruptcy.

The courts and Texas do not accommodate this situation for the lessor very well. I tried very hard to receive guidance from the bankruptcy court on how to handle the payment of rent to a landlord who is in bankruptcy for the second time and has over three thousand dollars of my money in deposits. There was complete disregard for my situation. I had a total of five trips to court or the bankruptcy trustee. The landlord did several things that were illegal including attempting to evict me from a property and ordering me to vacate a property during the middle of a month when the rent was fully paid. I never received my deposit back and had a bankruptcy judge refuse to order the return of my deposit money. The realtors were not paid by the landlord. The laws of the State of Texas are not sufficient to protect people that are not attorneys.

In bankruptcy issues where you are the lessor, your home will enter the care of a bankruptcy court and its trustee. You will be at the mercy of an institution that cares little about you and your financial situation or your safety. Their primary relationship is with the bankrupt landlord that used to own or control your home. I had this situation occur and attempted to contact Bankruptcy court judges by certified mail on three separate occasions and went in person to talk to the trustee. I was given no information about who to pay and was instructed to contact an attorney if I wanted to know anything.

Landlord issues that may directly impact the lessor include landlord credit issues, property taxes in arrears, mortgage payments in arrears, home repair failure, failure to return telephone calls, failure to reimburse for required repairs, failure to respond to mail, many civil lawsuits against the landlord, criminal background, bankruptcies, multiple divorces, and multiple simultaneous deaths in the family of the landlord.
Imagine that you are in a home and you find out that your landlord has a criminal background involving murder. In most states, a landlord has a key to the home that they have rented to you. You could be in a situation where murderer has a key to the home that you are leasing. If the landlord is a felon convicted of stealing personal property, you have a different type of security problem.

Do not fail to understand the full range of issues associated with leasing a home and how your rights may not be protected. These issues will occur much more frequently as bankruptcy rates increase. Do your investigation before your lease is signed. It may also be prudent to check the taxes at the county courthouse to see if these are current on your prospective rental property.

©Dr R Stone, MD in Alternative Medicine-India


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