Rihanna’s problem plagued $6.9 million home in Beverly Hills is on the market for $2.4 million less than the purchase price in what’s known as a short sale. The move may, but doesn’t necessarily, mean Rihanna is broke.
Rihanna, real name Robyn Fenty, has filed a raft of lawsuits against the seller, the real estate company and others over serious problems she’s encountered with leaking roofs, windows and doors and heavy water damage inside the mansion.
Check out Rihanna’s house; click photos to enlarge.
A number of Web sites, including Huffington Post and MediaTakeOut.com have reported that the short sale is an indication that Rihanna can’t pay her bills.
While short sales usually occur when a homeowner can no longer pay a mortgage, it doesn’t always signal financial distress, according to several real estate legal references.
It basically means that a property is being listed by a bank, or mortgage holder, for less the the amount of the mortgage. As such, it is a short (of the mortgage) sale.
Short sales can take place under all kinds of circumstances, not limited to financial distress. Given the litigation, it may just be part of negotiations to resolve legal issues.
But a short sale doesn’t free her from owing the difference between the mortgage amount and the eventual sale price of the house.
In rare occasions banks will forgive the debt, but that seems unlikely here.
One thing is certain, Rihanna has likely stopped paying on the house.
But a short sale alone doesn’t mean she is broke, because financial distress is only one condition a bank considers when it agrees to a short sale; it’s not the only condition, nor is it a requisite.
MediaTakeOut.com suggested Rihanna could be committing a fraud, if she did not “qualify” for a short sale.
But the only qualification is that the bank must agree to a short sale. The advantage to the bank is to avoid a costly foreclosure.
The eight-bedroom, ten-bathroom home was described as “stunning brand new construction” with over 10,000 square feet of space when Rihanna bought the property in 2009.
The previous owner, identified as Heather Rudomin, totally renovated the property in 2007 and 2008, according to the Los Angeles Times.
Rihanna filed suit last August against the realtors, developers and other companies that took part in the remodeling of the home. She said she would never have bought the place if she was made aware of the problems.
The “S&M” singer claims water leaked into several rooms of the house from a balcony that lacks the proper slope and drainage after a rainstorm in early 2010. The suit states the damage left the home “uninhabitable,” according to the AP.
“If Rihanna did, in fact, perform due diligence in purchasing the property and existing problems were not disclosed, then, in the state of California as in many other states, she would have a case,” according to real estate Web site zillow.com
The current listing describes the home as “a MAJOR fixer with EXTENSIVE water intrusion” and “EXTENSIVE damage from moisture AND water intrusion.”
To add insult to injury, the house is only 8,500 square feet in size.
Given the condition, the property doesn’t qualify for bank financing, according to the listing.
But the bank “will consider all offers.”
Check out the photos.