If my landlord is defaulting on a loan and the note holder has formally requested that I make future rent payments to him, what do I do?

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If my landlord is defaulting on a loan and the note holder has formally requested that I make future rent payments to him, what do I do?

My landlord has multiple loans on the rental property we live in. Today I received a letter from the attorney for “John Smith”. In the letter it states “John Smith is the holder of a note and deed of trust signed by your landlord. The deed of trust includes an assignment of rents.” It goes on to state that I should make all future rent payments to John Smith. My landlord disagrees and told me to keep paying him. Can I get in trouble for paying the wrong person rent? Who must I legally pay? My lease is directly with the landlord, not John Smith.

Asked on April 23, 2012 under Real Estate Law, Colorado

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Good question. Most trust deeds with resoect to proeprties do have assignments of rent where the lender is entitled to the rents of the borrower when the borrower is not current on the loan secured by a trust deed.

In your situation, there is a good chance that the lender is entitled to your rent payment and not the landlord. I suggest that you write the lender's attorney asking for a copy of the trust deed with the assignment of rents and suggest that your rental payment be paid to the local county superior court clerk's office in a blocked account so that the landord and the lender can fight over who gets the rent.

The best thing that you can do is to consult with a real estate attorney about the situation you are involved in and see if you can simplky pay your rent to your attorney in "trust" so that the landlord and the lender can then later resolve their dispute so as to prevent you from having to pay double rent in the event you decide on your own to pay rent to the wrong claimant (landlord or the lender). 


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