Bad tenants - Posted by Mike

import · January 22, 2001, 9:58am

Posted by TeddyB_SC on January 22, 2001 at 22:10:35:

Thanks for the valuable lesson!!!

import · January 22, 2001, 9:58am

Posted by Mike on January 22, 2001 at 10:58:55:

IF I were to Lease option a home and sublet it to my T/B and I did my homework in pre-screening them, yet they turned out to be bad tenants. If they tear up the property before I’m able to evict them will I be responsible for the repairs to the home for my Landlord/Seller. Has this ever happened to you old pro’s before and how did you handle it.

Thanks for your responses. Mike

import · January 22, 2001, 4:35pm

Re: Bad tenants - Posted by Jim Locker

Posted by Jim Locker on January 22, 2001 at 17:35:22:

This is exactly why, if you did a L/O from me, I would not let you sublet.

You would indeed be responsible for the damages, if your contract specified that you were responsible for the condition of the property (which it certainly should specify).

I always forbid sublets. Which doesn’t always stop the people to whom I rent or L/O. When I discover it, I always evict - and I specifically evict the person to whom I leased the place along with “all unknown occupants”. I then pursue the person who signed the lease until either they pay me or file bankruptcy.

import · January 22, 2001, 6:44pm

Re: Bad tenants - Posted by TeddyB_SC

Posted by TeddyB_SC on January 22, 2001 at 19:44:48:

Jim,
I see that subletting is not the way to go. Is the proper procedure offering owner financing, or a L/O on top of your L/O. I am still learning and appreciate any help you can give. Thanks

import · January 22, 2001, 7:57pm

Re: Bad tenants - Posted by Jim Locker

Posted by Jim Locker on January 22, 2001 at 20:57:06:

Actually, a lot of the people here on this board are advocating sublets explicitly. That is what a sandwich deal is.

You L/O from someone, and turn around and L/O to someone. You avoid the risk, you never appear in the title chain, and you collect a commission.

That’s fine for those who can do it. But they’ll never do it if I am on one end of the transaction. The reason is exactly the one you set forth; they are putting an unknown and unexpected risk back on me.

Before I L/O (or rent, or lease) to someone, I screen them carefully. If they then L/O to someone else, my due diligence has been negated totally, and I have to depend on their judgement in picking people. Given that they expect to sidestep almost all the risk, there is no reason for me to trust their judgement and every reason to suspect it.

If I were to L/O a multifamily (I never have, but anything is possible) then I would do it with the expectation that my lessee would become the master lessor and would sublet - after all, why else do that kind of deal?

In such a case, I would require that ALL his applicants be screened by MY screening company (at the normal price, of course), and I would have ABSOLUTE right of refusal for any of his applicants. This of course, would greatly increase HIS risk (though still not to the level of MY risk), and this is how I would want it to be.