Hell, No, The Tenants Won’t Go
Well, Contractor 3’s tenants in House 8 have stopped paying him rent. They claim that they shouldn’t have to pay since he did not disclose that the house flooded within the last five years. But, Contractor 3’s attorney told him that such a disclosure only needs to be made to a person that is purchasing the home or entering into a lease-purchase. The tenant has been totally uncooperative with Contractor 3 whenever he tries to perform repairs to the house. He’s tried twice now to pull back the carpeting in two rooms to repair any leaks that are located underneath–but, the tenants will not move their furniture out of the way, even though they were given 24 hours notice both times. Rent was due on the 25th! And, today being May 2nd, they are clearly in default.
So, Contractor 3 is already having to go through an eviction in his young landlord career! Not only that, but he’s saddled with having to make the repairs to prevent flooding in the future.
Here’s the kicker–there’s no written lease! I had no idea Contractor 3 was that trusting! Not to mention, I thought he knew better. But, yeah, he thought he could depend solely on the word of the tenant that they’d be great tenants, take good care of the property, stay forever, pay regularly, and promote world peace. If you’re a landlord, you’ve heard this before….
Yes, the tenant has a reason to be upset–the carpeting in two rooms has gotten wet with the rain. But, Contractor 3 is desperately trying to locate the source of the issue. He’s already done as much as he could do from the exterior. But, without the tenant’s help, he can’t perform the necessary repairs to the interior!
I think it’s obvious what’s really happening here…. These tenants are trying to take advantage of him. They’re trying to build a case that would make it alright to live in House 8 rent free. If the wet carpeting in two rooms truly made the house uninhabitable, they would’ve already found another place to live and moved out already.
Contractor 3 begged me to call the tenants and explain landlord & tenant law to them. So, I did….very reluntantly. I spent 30 minutes on the phone trying to get a word in edgewise. The tenants are so sure they’re right, there really wasn’t much I could say. Finally, I said, “Look, it sounds like the house is just not going to work out for you. Do you really want to stay in a place like that anyway? Any judge is going to look at your situation and say that since you have no written lease and are not paying rent, you’re squatters. I don’t think you’re going to win this. So, when can you be out?” She said, “Well, one of us isn’t even in town right now. He won’t even be back until the 7th to look for a new place.” I said, “OK, well, how long does he need once he gets back to find somewhere to move?” She said maybe a week. So, I said, “Well, if I go to the landlord and ask him to give you until the 14th to move out, will you be willing to sign a statement that you’ll be out by then, leaving the house in good condition?” She said yes.
I told her my whole goal was to see if I could mediate this and find a way to work it out without the whole issue going to court. Contractor 3 really screwed himself by not having a written lease. The tenant was willing to go along with the 14th. Of course, this is without them paying rent. But, I was going to advise Contractor 3 to pursue them financially once they were out of the house.
Contractor 3 didn’t like this plan, however. I think he feels that the whole situation is a personal affront. And, I can’t say that he’s wrong. But, having a hot temper is not helping the situation. He gave them a 3-day notice (even though I warned him that they’re legally entitled to a 5-day notice) to get out. Then, he showed up today (the 3rd day) with his police buddies only to discover that the tenants had nothing packed. Duh. So, he called me to figure out how to go about doing a formal eviction. I told him to head down to the courthouse and file the papers there.
What did they tell him at the courthouse? He was supposed to do a 5-day notice. So, now, he’s got to post the 5-day notice on the door and start all over. But, on the 5th day, he’s going back to the courthouse to set a court date for the eviction. It should take about 7-10 days to get a court date. Then, boom–after the eviction is won, the Sheriff will escort them out within 48 hours.
It looks like I’m Contractor 3’s landlording mentor now. I’m going to be teaching him my Jedi ways. 
I told him I would give him copies of the standard lease agreement and addendums, plus go over anything he needs to know about landlording. In addition, I volunteered to “forgive” this month’s payment for House 8 (since we’re still holding title to the three properties we sold him by lease option) to defray the additional costs he’s going to incur fixing the House 8 leaking problem once and for all. He was delighted! I know it’s most likely going to cost him a pretty penny to pore a fresh layer of concrete in the problem areas. Michael thinks we might not have seen the rent anyway, given that Contractor 3’s tenants didn’t pay him.
I did make it clear that the rent is due for the other two houses that Contractor 3 purchased from us, however. He said he understood and had no problem with that.
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The good news is Contractor#3 won’t be renting to anymore tenants without a written lease.
This is a good approach. By trying to be reasonable with the tenants, IE letting them go without a fight, Contractor#3 is lining himself up good for a judge.
Any judge who sees a landlord trying to be reasonable with tenants who are completely unreasonable will rule in favor of the landlord.
Trisha,
I wouldn’t have defreyed his costs by not accepting house #8’s payment. You are too nice.. A deal is a deal, you do what is stated in the agreement, and he does the same..
First, he knew about the previous water damage, I thought you mentioned that he worked on the fix, correct? So, he understands the potential liability.
In addition, its not your problem that he has bad tenants.. No written lease? Thats called stupid tax..
Anyway, save you moeny, maybe you could got your vacation sooner if you accepted house #8 payment.. Your too nice..
Wow — we are going through something similar, with a family member who signed a lease for a commercial space, but never received a signed contract back from the owner.
Now, the owner has declared them squatters and has turned off their air. Drama, drama, drama. It makes you want to make sure you have everything signed, sealed and delivered
Heh..So he’s got to start the 5 day period all over, then another 7 to 10 days after that.. By my calculations, that put the court date at around May 14 to 17, and if he wins, they’d be out a day or two after that. He should have just agreed to their statement that they’d be out by the 14th..
Clifford - I think Contractor 3 has a good case. But, it will hurt him that he has no written lease. I fully expect the judge to give him a hard time about that. I think he should have just cut a deal with them so they would leave the place in good shape, then call it a “lesson learned the hard way”.
Brian - I can absolutely see your point of view! But, after weighing the options, I decided it works much more in our favor if Contractor 3 does not just hand us the keys and say “I quit, you can have the houses back.” That’s what he was about to do. So, it was worth it for us to just cut him a break just this once in lieu of having to take over making mortgage payments on those three houses again or having to take over God-knows-what kinds of tenants.
Alison - Oh, yeah, definitely it’s worth the little bit of effort to get everything in writing from Day One. Your poor family member has no way to prove that he had a lease, huh?
Shaun - And, that’s what I figured as well! Plus, now, they’re far more likely to cause damage to the property before they leave!