RENTERS CAN SAVE LAS VEGAS NEIGHBORHOODS
Vacant homes, with overgrown lawns and trash in the yard, are not just an eyesore but a legitimate concern for neighbors because they lure in criminal behavior. Vandals break into vacant houses to steal copper wiring, meth dealers move in, and international sex traffickers set-up operation.
Metro Police officers hate vacant homes- so do Las Vegas Code Enforcers. Lenders, responsible for those consequences, can be held criminally and civily liable and are seeking billions of dollars in compensation from federal bailouts and mortgage insurance because of vacant homes.
One solution to mitigate the damages associated with vacant homes is for the homeowner to lease out her home as she heads into foreclosure. The homeowner should consider renting out her home anytime before the Notice of Trustee Sale, even after she receives the Notice of Default, during the short sale negotiations or just before walking away.
Renting is always a risk for the lender soon-to-be-landlord as explained here. But there exists a federal law specifically designed to prevent vacant homes and protect renters. The law obligates the lender to honor the lease agreement after foreclosure, which enables the renter to remain in the house for the term of the lease- potentially for several years. Rather than attempt to oppose the lease’s validity, the lenders should honor any existing bonafied lease agreement. So long as the renter pays and maintains the house, the lender wins.
Regardless of how the law is ultimately applied (and nobody knows right now), avoiding the creation of another vacant home is a huge benefit to the homeowner, the renter, and the community. The neighbors will thank you because a single vacant home can reduce neighboring home values by an estimated 12% or more, and the neighboors will no longer have to worry each time they see a strange car parked in front of the vacant house. The homeowner can pocket the monthly rent until the bank takes title- a nice monthly stipend.
Not surprisingly, the lender stands the most to gain if the home is occupied, since it will not have to fix a trashed home and will realize a better re-sale value. It can also earn a monthly rent while the home waits in line to be sold behind the other homes lying vacant in the shadow inventory.