The high number of recent property foreclosures, driven by an uncertain economy, is taking a particular toll on people with disabilities who rent homes, condos and apartments.
People with disabilities often require ground-floor dwellings and close proximity to medical services, equipment providers, caregivers and accessible means of transportation. These requirements — plus difficulties with finances — can make it doubly hard to quickly find and move to new lodgings.
Renters with disabilities may get some help from proposed and recently passed legislation protecting renters’ rights in foreclosure cases. Renters themselves can take some preventative measures to avoid being caught in a foreclosure vise. But for people with disabilities, this is unquestionably a situation that needs to be fixed.
Steve and Susan Masarsky are an example of how things can go wrong. They had rented their two-bedroom apartment in Canyon Country, Calif., for three years. Susan, 50, has myotonic muscular dystrophy (MMD, also known as DM), uses a vent and spends most of her time on bed rest. Steve, 53, who has a history of heart problems, is her caregiver.
A few months ago, the Masarskys learned their landlord had defaulted on payments to the company that owned their apartment, so it was foreclosing on the property. The company gave the couple 60 days to vacate the premises. Then Steve lost his cashier’s job at Wal-Mart.
“I told them it would be too hard for us to move because of Susan’s health, her equipment and the medical services she needs,” Steve said. “They didn’t care. They said, ‘How much will it take to get you to move?’ Then they offered me $100. It was insulting. I told them, ‘I have two months rent right here in my hand. Why can’t we stay?’”
The company that owned their place wouldn’t relent on the demand that they move out, but it did raise its offer of “help,” eventually to more than $3,000.
After searching desperately among friends and relatives, the Masarskys finally found an in-law willing to rent them space in her home temporarily. Her spare room was accessible, barely, for Susan.
At least in the Masarskys’ case, alternate lodging was available, even if only for the short term. And the property owner eventually forked over enough money for them to make the transition. Others have not been so lucky.
Steve Masarsky says people in this situation need all the time they can get to find a new place to live. “I think there needs to be some kind of agency where disabled people can go to get help renting a place, with no money down,” he said.
Renters at risk
Nationwide, the foreclosure numbers are staggering. RealtyTrac, a large online marketplace for foreclosure properties, said the number of foreclosure filings reported in the United States during 2008 increased by 81 percent over 2007 filings, and 225 percent over those in 2006. Rural areas seem to be getting hit as hard as urban areas.
The nonprofit National Low Income Housing Coalition (NLIHC) reports that renter households (36 million of them) make up one-third of U.S. households. In a special report released in December 2008, NLIHC said, “The current foreclosure crisis is affecting the entire housing market, including rental properties. Dependent on their landlord to inform them of a foreclosure, renters are most often at risk of being evicted with little notice.”
The report goes on to note, “ …. it appears that as many as 40 percent of the families who have [lost] or could lose their homes due to foreclosure are renters.”
A double bind
Alice Gunderson and her husband Ed, 70 (who has MMD), facilitate MDA’s MMD support group in Southern California. They say many of the families are renters.
“Because myotonic dystrophy often occurs later in life, many people with it are no longer generating income with full-time jobs,” she said. “That puts them in a double bind, financially, if a foreclosure happens.”
Gunderson spoke with the husband of a woman with MMD who had promised her that he never would put her in an assisted living institution.
“But when the bank foreclosed on their apartment, he had no choice,” Gunderson said. “He told me he would be willing to live on the street if that’s what it took until he could find a new place for them to rent. He sounded suicidal.”
It’s often impossible for people with disabilities to quickly come up with the first month/last month rent and security deposit required by most landlords, as well as the cost of transferring utilities. If they’re evicted, their credit reports get a black mark.
Steve Masarsky said when he and his wife were looking for new rental lodgings, each prospective landlord charged $60 to do a credit rating check on the couple. Because of Susan Masarsky’s health expenses, their credit rating wasn’t good and most landlords refused to rent to them. That sequence of “$60 refusals” repeated itself again and again.
Apartments in short supply
One effect of the housing crisis is that the rental market is getting tighter. And in response to the scarcity of rentals, some landlords see an opportunity to boost rents even higher.
Others have taken advantage of their renters (or prospective renters) in even more egregious ways:
Newspapers around the country are full of tales of renter abuse during foreclosures.
From the Chicago Reporter (July/August 2008): Even though Illinois law requires tenants be given 30 days to vacate foreclosed properties, some banks were telling renters they had to vacate immediately, because it’s easier for them to sell empty buildings.
From the Phoenix [Arizona] Business Journal (Jan. 2009): Renters seldom take landlords to court because the amount they could win is likely smaller than the legal fees they would pay.
From the Boston Herald (Nov. 23, 2008): Banks often prefer to file eviction cases in district court where pro bono (free) legal assistance isn’t as readily available as in lower courts.
Fixing the problem
In response to these situations, legislation was introduced in Congress last year that would require landlords to give a minimum amount of notice to tenants that their rental premises are in foreclosure (the Protecting Tenants at Foreclosure Act of 2008, sponsored by John Kerry [D-Mass.] in the Senate and Keith Ellison [D-Minn.] in the House).
Both bills died in committee. Ellison has reintroduced his legislation; as of late April, Kerry’s office was “still looking at” the issue of foreclosure to determine what action would be most appropriate.
In more than a dozen instances, individual states have passed or proposed similar minimum-notice-of-foreclosure requirements.
Arizona (2009): Minimum 30 days’ notice; penalty for non-compliance of $2,500 or six months in jail (pending).
California (2008): 60 days’ notice before eviction (passed).
Massachusetts, Michigan, North Carolina (2008): Minimum 30 days’ notice prior to foreclosure (passed).
Minnesota (2008): Minimum 60 days’ notice (passed; legislature now working to add penalties).
The District of Columbia: The law permits renters to remain in their lodging even after foreclosure.
Both the Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) have announced they will not — at least for several months — evict renters from properties on which they are pursuing foreclosure, so long as rent payments are current.
In Cook County, Ill., (home of Chicago), the sheriff refuses to evict renters from foreclosed properties if they are current on their rent.
What to do?
People with muscle diseases have plenty on their minds without having to perform preventative maintenance on potentially shady landlords. But time spent on advance precautions can pay off.
To avoid renting from a landlord who is delinquent on mortgage payments, ask to see the monthly mortgage statements that the lender has sent to the landlord.
Check with the county recorder’s office for default notices on a potential rental property.
Verify ownership of a rental property through the county assessor’s office.
Look for warning signs, such as landlords who don’t require a rental agreement, ask for rent payments in cash only, or who don’t have an office. Look for signs of poor maintenance and neglect.
Is the rental price much lower than seems logical? Find out why.
Call the Better Business Bureau (BBB) to see if there have been complaints against the landlord.
If worse comes to worst, the AARP gives several suggestions to renters facing eviction due to foreclosure:
Hang in there
Until protective legislation is passed or the economic situation improves, times may be tough for many renters with disabilities. In response, some are “getting creative.”
Gunderson tells of a couple who were evicted from their rental but had no accessible vehicle in which to transport the wife, who has MMD, to new lodgings they’d found.
Pressured to move out quickly and at wit’s end, the husband called 911 and said his wife was having chest pains. Shortly after, an ambulance arrived and took her to the hospital. After an overnight stay, she again got a ride in the ambulance — to their new rental unit.
“It wasn’t ethical, and I knew it full well, but I was in a terrible dilemma,” the husband said. “Finally, I just did it.”