landlord rental question

Georgia - My husband is a joint owner on his mother's house. it is financed, but he is not on the loan. She is ill and is no longer living in the house and wants to rent the house to make money. If she dies, my husband is not refinancing the house into his name. We plan to let it go back to the bank because the mortgage is underwater.

What is the obligation to the tenant if we break the lease when my husband's mother dies. Do we ask the tenant to leave? Are we responsible for the moving costs of the tenants if we break their lease?

First of all, he cannot rent it without a certificate of occupancy. Neither can she. She is apparently very ill and you two plan on her dying within weeks if you are planning to rent a home that is set to be foreclosed upon any day now.

If the house is already in such arrears that a joint owner has no intention of refinancing real property (real property is an investment that makes money over time), then it's unlikely he'll be able to get as far as renting it out anyway.

There is only so long an owner can hold onto a house before it's foreclosed upon. If it's already "underwater" and a joint owner does not want to bother getting it out of arrears, it's foolhardy to try to rent it to tenants who are looking for a longtime place to call home, only to break your own lease and tell them they have to leave.

It would be a much more logical solution to, right now, place the house on the market.

Incidentally, if you go forward with your plan, the tenants will have every right to sue you for not only the remainder of their lease if you are stupid enough to actually make them sign any lease whatsoever, but because you have foreknowledge that the home is in imminent foreclosure, they can sue you for back rent and their security deposit as well.

There is a way to rent this house.

Except in large, metropolitan areas, local authorities don't know or even care if a C of O was ever done. It may have been done while his mother was living there. He could check to see if one is on file. If not and he wants one, he could make an appointment with the local building inspector to obtain one. But in my area of the midwest, they don't even look for one when you rent a place. No registration is required to rent a house here. If you rent without one here, it is no more than a zoning violation and a small fine. You should check this out for your area.

No one ever said you need to put a tenant on a LEASE and obligate yourself to a set period. You can simply rent the house on a month to month AGREEMENT. It is a written agreement, same as a lease, except the tenant and owner are not guaranteed any period in the house longer than a month. Most renters on a m2m stay longer than a month of course, and many don't know the difference. Tenant or owner can give the other notice to vacate at any time. Under this type of agreement, you have to give the tenant 60 days notice to move out (and they need to give you 30 days notice to vacate). No reason is required to ask them to leave. Just give them the written notice to vacate. So once the mother passes, and the son takes possession through probate, the son could then give the tenant notice to vacate and allow the mortgage to lapse. Please note, it will take some time after the mortgage is not paid before a foreclosure begins. Since the tenant was never guaranteed more than the current month of tenancy, he cannot sue. But you will have to account for and return his deposit with a statement of all deductions to him within one month after he leaves. In the agreement, you must identify the account number and bank where the deposit is on account. No interest is due to the tenant though.

To the other poster: While the original poster said the mortgage was "under water", he didn't say the mortgage payments were delinquent. This term merely means that more money is owed on the mortgage than the house is worth. The payments may still be current but the son just does not want to pay for a house that is not worth as much as is owed. To jump to the conclusion that the mortgage is delinquent is irresponsible. That was not said in the post.

To the son: You should consider the refinancing. Home values are due to begin rising soon. Hopefully this recession will end and property values will climb. The balance that is due at the time of her death can be financed over 30 years. You should check and see what the payments would be on that. (Many on-line mortgage calculators are available to determine this based on the son's current credit score.) If the mortgage payments, (rental not home owners) insurance, and taxes on the house monthly are less than what you can receive in rent, retaining the house as a rental investment may be a good idea.