Whatever the reason, there seems to be some confusion about the financial priority of rent and the difference between paying rent and making the mortgage payment.
Some basic points:
- Rights to your home as an owner are granted with a deed. If you are borrowing funds to become an owner your lender can restrict your ownership to protect their loan. These restrictions generally assure that you own the real estate as long as you live up to your end of the agreement and are defined in a trust deed (collateral instrument most often used in California to secure a mortgage loan).
- These restrictions allow the home to be legally transferred to the lender as a last resort and further allow them to re-sell it to get a return of their money.
- In all of this the state laws generally favors the borrower as the home owner while recognizing the loan as a promise to payback the lender as agreed.
- The rights and responsibilities of a tenant are spelled out in a lease or rental agreement. These contract items need to be in strict conformance to state and federal housing laws so that the tenant can rely on the terms of a legally-binding contract to protect their ability to enjoy possession of the rented home.
- The requirement to pay rent in advance has to be met as agreed in the lease. Failure to live up to this primary requirement on their part will normally deny them initial possession.
- Non-payment of rent anytime during the lease begins to quickly unravel every other protection they have as a renter; both immediately and in our information-driven society it could continue to hinder the renter from obtaining another home for a very long time.
- This lease contract is so essential to all parties that its adjudication is governed very carefully by laws and regulations that protect the renter and the rental owner.
- An eviction (unlawful detainer) action is limited to whether the tenant is in major breach of the lease. The primary test is whether the rent is paid by the renter and accepted by the owner/manager. If the tenant cannot document the payment and receipt of rent possession is returned to the owner/manager.
An action by a mortgage lender to forcibly evict a homeowner as a last resort in order to recoup their loan will often take months or even years. The action for the rental owner/manager to regain possession of a rented home should only take about 60 days. Remember that the long term financial negative effect is similar for the renter. These facts should emphasize the priority to pay rent before any other obligation; on time, every time.