My husband & I paid a Real Estate Agency to rent our home & collect the rent etc. for a fee. It was going smoothly until someone supposedly embezzled money from the company. The company went out of business. We were wondering if the renters are still obligated to pay us the same way they were paying the realtors. The lease needs to be changed, I'm sure but we haven't done anything yet. We have not received all money collected from the renters (like their security deposit). Do the renters have a right to break the lease because of this turn of events? We have talked to the renters & told them we haven't received their security deposit etc. but we will make good on it. We are honest people & won't rip them off. The renters paid in a timely manner last month but now we haven't received payment yet. It IS the first & it is due today. :eek:

Yes, the lease is still valid. Just confirm that you are the owner and that the agent you used went out of business - and that they should pay the rent to you from now on.

First of course the lease or rental agreement is alwasys from the owner to the renter ( even if there was a management company managing the rental)

First the rental agency was suppose to give you the deposit money and the money was to be placed in a savings account.

So what has happened is you, as the owner has been cheated. The renters are not at fault and can not be harmed because of this.

So you as the owner is obligated to honor the lease, since it is you that was leasing the property,n ot the management company.
And you are still expected by the renters to have their deposiit and will have to return it to them if and when they move out. So you will need sue the management company or its owner for the money of the deposit and any money you have lost.

So you need to assume them you will honor their contract ( since they can force you to anyway) If you don't honor their lease, they have a right to break it but they will hold you perosnally liable for the breach and it can cost you money perosnally.

So you can't hold the renters liable for money they already paid to your "agent" because once they paid them, you were paid, even if you never got the money from the "agent".

You need to IMMEDIATELY inform the renters that they need to send future rental payments to you or another designee. Send them notice via certified mail.

As Chuck pointed out the renters are not responsible for any funds already paid to the mgmt agent. You will need to get those funds from the agents. You will also need to account for any deposits made.

The lease shouldn't need changing though.

Yes - and you need to notify the state RE licensing board about any missing $$$ as there may be recourse against the BROKER of the company or a claim against their insurance carrier.

The lease is still in effect or you can re-write with the tenants' permission

PS - don't send ANYTHING to a tenant or landlord certified mail... send USPS delivery confirmation and a copy regular mail or via e-mail attachment.