Renters caught in the foreclosure mess

February 26, 2008 8:08:21 PM PST
They were caught unaware, by their landlord's financial predicament. Now they've become unwitting victims of a stubborn Bay Area foreclosure crisis.

Renters claim that East Bay MUD is being used as a tool by banks, trying to evict tenants from foreclosed properties.

Tonight-- the utility says it will stop shutting-off water service -- at least for now.

Tenants did not really offer any concrete proof, but this is what the lenders are actually doing. Their suspicions are based really strictly on timing; that is the timing of the water. In Oakland, the water service was shut down only after the lenders other aggressive efforts to evict a particular group of tenants had failed.

The water is on at Ida Hancox' west Oakland rented duplex -- for now. But for two days in December, it ran dry.

Shut off by East Bay MUD, because Hancox' landlord, the bank that repossessed the property hadn't paid the bill.

"We shouldn't have to suffer because of the foreclosure. As a tenant, our water bill and garbage bill is included in our rent," said Oakland tenant Ida Hancox.

Kim Isaac-Ray lives upstairs with her seven children.

"I'm here to make sure that the same thing doesn't happen to another family because as a tactic to make us move out after the foreclosure, the banks topped paying the water bill," said Oakland tenant Kim Isaac-Ray.

When local advocacy group Just Cause got involved, East Bay MUD agreed to turn the water back on at the duplex -- at least in the short term.

On Tuesday, the utility's executive board imposed a moratorium on shutting off service to tenants living in foreclosed properties, until they consider formal policy changes next month.

"We need to have a collection system that will still collect from the landlords and find a way that does not disconnect tenants, from water service," said Andy Katz from the East Bay MUD Board.

Meanwhile, in Sacramento, lawmakers will consider a bill sponsored by Fremont Assemblyman Alberto Torrico that would give greater notice to tenants facing eviction because of the mortgage crisis.

"The tenants have no idea the utilities haven't been paid, the mortgage hasn't been paid. This bill would require the banks as well as the utilities to give the tenants notice that there is a problem," said Assemblyman Alberto Torrico (D) Fremont.

Besides better notice, Torrico's bill would also allow tenants to set up their own temporary accounts to pay the water bills directly. They could then deduct that amount from the rent they pay. The bill is making its way through the legislature, and it could take a couple of months.

East Bay MUD will now consider how they will handle these services issues in the case of foreclosures at their next general meeting, March 11th.