Renter Forced To Move Out Of Foreclosed House, Can't Get Security Deposit Back

Silpa had the bad fortune of renting a house from a deadbeat owner who let the property go into foreclosure. Now that $2,200 security deposit could be lost forever amid the turmoil. Silpa’s story:

On May 29th, I came home to a notice on my door that the house I was renting was getting foreclosed on, and sold at auction.

I was confused and upset, but got it together long enough to find a new place, and schedule a move. I did some research and found out that new owners of the property would owe me my security deposit. I also got information that mortgage companies tend to offer cash for keys. I figured that if I couldn’t get a little extra cash at least I would get my deposit.

Forward, ahead three weeks, and I find out that the house does not sell at auction. This means that the mortgage company now gets to sell it through a real estate agent, in this case Armando Delgado of realestateprofessors.com. I contacted Armando, and let him know I was the tenant and in the process of moving. I asked him about my deposit, and he said he’d pay it and send me all the paperwork by email. Few days go by and no email. So I call again, turns out he’s on vacation. So I call again after his vacation is over, I tell him I need a few more days to move (i’m trying to sell my washer and dryer), he says okay and says once again he’d send over the paperwork by email. Again no paperwork. The next day I stop by the house, since I’ve moved almost everything out except a few things and my appliances, and I find that all the locks have been changed. I called Armando, and he tells me GMAC, said it was vacant and changed the locks. I told him I need my appliances, and we set up a time for me to get them. When we meet, he tells me that he won’t pay me. I no longer have any leverage as they’ve illegally broken in and changed the locks. I was upset, to say the least, so he had me write a request on the back of my old lease for a refund of security deposit, and I haven’t heard from him since.

I know the law is on my side, and I can go to court. I will probably end up doing just that. However, a lot of mortgage companies and new owners of foreclosed properties think they don’t owe the renter the deposit. When I originally contacted GMAC customer service (to get Armando’s contact information) I talked to 4 different people that
said the new owner didn’t owe me the deposit. The mortgage companies are counting on tenants not to know their rights, and taking advantage of people that have been paying their rent. I hope you’ll post an article about how tenants in this situation still have rights.

Silpa sent a certified letter to Armando, but that didn’t do much good:

The realtor has refused to pay us back the deposit. Everyone at GMAC, the customer service department, the foreclosure department, the foreclosure specialist, the eviction specialist, all say its the realtor’s decision, since he represents GMAC, and they have no power to provide the deposit. They apparently have no escalation contact either. The realtor, says its GMAC decision, and refuses to provide the contact information of the person he talks to. So, now I’m stuck. I think my only recourse is court. I know that in CA the law is on my side, but the realtor’s decision to ignore the law and GMAC’s decision to make him the contact person means I’m stuck without my
deposit. Its $2,200. I’m not sure what to do next. Any thoughts besides small claims court?

The first thing that comes to mind is “weep uncontrollably.” I’m sure you commenters can do better.

(Photo: jetsetpress)