With 32,000 foreclosures pending in Maricopa County since the start of 2009, renters and homeowners could be at risk, experts said.
Dean Wegner, director of the Arizona Multihousing Committee, said that last year there were 45,000 foreclosures in Maricopa County.
This year, what amounts to 71 percent of last year’s total foreclosures, have already been reported.
“Foreclosures may double or even triple this year,” Wegner said.
“It’s an epidemic. It’s not fair, but it’s happening.”
A foreclosure is a result of a homeowner or landlord defaulting on a loan. Defaulting usually happens when the lender fails to pay loan installments for three consecutive months, Wegner said.
When apartments or condominiums foreclose, the renter has a few options, Wegner said. With many ASU students renting off-campus, learning the options prior to foreclosure can be beneficial, though there are certain precautions to take.
If renters learn their apartments are foreclosing, they should have a copy of their lease at hand, Wegner said, and be sure to “know the ins and outs of your lease.”
Property manager for The Lofts at Rio Salado in Tempe Micheal Boyce agreed that understanding lease agreements is important for renters.
“Be aware of what is going on,” Boyce said. “Look at all options as a renter and ask, ‘Is there any way to get out of this uncertain situation?’”
Another option is taking legal action to understand rights as a renter, Wegner said.
“Feel free to talk to an attorney to help you. Lots of times attorney fees are less than a month’s rent,” Wegner said.
An attorney can help renters make the most of their situations, he said.
And when a landlord defaults on a loan, it usually means the lease will be void, he said.
“Normally the lease agreement is in default, and you can get out of it,” Wegner said, “Unless [the landlord] reinstates the loan within 30 days and proves to you in writing that the loan is back in good standing.”
In most cases, if a landlord is foreclosing, renters can get out of their leases with relatively little trouble, he said.
Otherwise, renters can stay in their apartments or condos and wait for new management to take over and possibly talk down their rent payment.
“[Renters] can always stay at the property and wait for the new owner and renegotiate a new lease,” Wegner said. “It is an opportunity to negotiate your new rent down.”
And a renter has some time to make a decision, Boyce said. If an apartment forecloses, there will not be an immediate change.
“It is highly unlikely that you’re going to have to move within a week or a day.” Boyce said. “A foreclosure takes time.”
And as foreclosures in apartments and condos continue, the federal government is taking action, Wegner said. Legislation is in the works that would result in landlords facing a large financial penalty and possible jail time if they fail to notify their tenants.
“I believe there is 100 percent chance it will pass,” Wenger said. “We want to protect the tenants.”
Reach the reporter at abigail.gilmore@asu.edu.
