Why Your Landlord’s Credit Affects You as a Renter or Tenant May 29
Most people who rent a house, condo, or apartment have no idea that the financial credit of their landlord has a potentially dramatic and life-changing influence over their own situation.
Generally speaking, the issue never comes up and so it is rarely discussed or understood. But within the past year millions of renters found themselves in terrible, financially and personally devastating situations because of deadbeat landlords who failed to pay their own bills on time. That’s because when landlords get behind on payments – especially mortgage payments – lenders take action.
Many renters have been evicted during our current housing and credit crisis because their landlords went into foreclosure. Under the law tenants do not have to be notified if the landlord goes into foreclosure, and the first that many tenants ever hear about the situation is when they come home to find an eviction notice on their door. Evictions usually happen within a matter of 30 days or so, and that gives tenants very little time to prepare. But if they don’t move by the eviction date the sheriff can come and legally and forcibly put them on the street with all their belongings.
Keep tabs on your landlord’s credit by asking to see copies of recent mortgage payment statements or by visiting the local courthouse to see if anyone has filed legal collection actions against them. If your landlord is in financial trouble he or she may conceal that information from you in order to keep collecting rent. But if there is a foreclosure you may risk losing your security deposits and will then have to come up new deposits and first and last month rent for a new place to live.
Landlords that have nothing to be concerned about should be willing to share copies of their credit report or let you speak to their banker. Or they can show you cancelled checks that verify that they are making their house payments on time. A little extra vigilance may take some effort but it is much better to be safe than sorry as a tenant in today’s chaotic housing market and unpredictable economy.