Posted by Joe on July 21, 2001 at 12:06:46:
Tom,
How was that carried out. What were the circumstances forcing an eviction on a threat?
God Bless,
Joe
My tenants threatened to sue me!!! - Posted by Tarun_MD
Posted by Tarun_MD on July 19, 2001 at 21:52:14:
I did a sandwich lease option deal over a year ago(I am in the middle).
I got a call today from my tenant/buyers asking me to fix 3 wooden steps that are on the back of the house. They told me that the wood was rotting away and someone could fall and get hurt. In my opinion,this is not a major problem with the house. This house is only 9 year old. I told them that they are responsible for all the minor repairs according to our contract and they kept insisting that this is not a minor repair. I know its a minor repair because I saw these steps last month at the house when we were replacing the water heater.
During our conversation, I kept insisting that they do the repairs and I’ll give them credit towards the purchase price. Finally, he threatens me and says that if someone gets hurt because of these steps, they’ll sue me.
Is this something I need to be concerned about? I made the mistake of doing this deal in my own name instead of my company’s. So if they sue anyone, its going to be me personally.
Thanks!
Tarun
Re: My tenants threatened to sue me!!! - Posted by Stu Silver, Trainer
Posted by Stu Silver, Trainer on July 20, 2001 at 07:42:30:
Hello Tarun,
If you read the other responses below, there is a mixture of wisdom and stubborness.
First, you probably have legal exposure. The lease/optionee tenant told you the steps were bad. If you don’t fix them and someone gets hurt, guess who will be made to look negligent? You! After being thru similar lawsuits, I can tell you it ain’t worth the price of some wood to chance that kind of attack on your assets, and the waste of your time spent with attorneys.
Two, you need to fix your lease/option contracts to say the tenant makes all repairs, and is taking the property AS-IS. As a matter of practice, we fix everything during the first month of a lease option so lease/optionee doesn’t think we are hiding defects. We call it the shake down cruise (unless the property clearly needs repair and we are optioning it that way with price concessions).
Last, do you want the property back, and can you option it for more money, or less? If more, than I would ask the tenant if they are unhappy and would like to move. When any, and I mean any, of our tenants are unhappy, I always give them the option of terminating our relationship so each side does not get hurt. They leave the place, with good notice to me, clean, undamaged, and re-rentable, and I give them back their money.
Life it too short, and the need too great for good quality rentals, to persist in negative relationships.
That is how I see it, after 22 years of being a landlord and real estate investor.
Stu Silver, CCIM
Lead Trainer at Russ Whitney’s Millionaire U
Licensed Broker, Mortgage Broker, Auctioner,
Appraiser, and C.E.C.
Re: My tenants threatened to sue me!!! - Posted by Wayne (MD)
Posted by Wayne (MD) on July 20, 2001 at 05:14:10:
Your tenant/buyers seem to be behaving more like tenants than buyers,which brings up the question of whether they consider themselves buyers. This (I think) would hinge on how much option consideration they have in the property. Did you get option money or are they simply paying rent? Do you think they’re trying to break the contract?
Wayne (MD)
Re: My tenants threatened to sue me!!! - Posted by eric-fl
Posted by eric-fl on July 19, 2001 at 23:58:34:
Well, hold on. I guess I’m taking a little bit of a contrarian view on this one. First off, are they correct? Is the wood really rotting away? The age of the house is irrelevant to the condition of the wood. Certainly, if they were improperly installed, 9 years is plenty of time to rot. And they are right - IF the wood really is rotted, then someone could fall and get hurt. And that opens up a whole can of worms you don’t even want to think about. Who do they sue?, etc. If your relationship with them has been an otherwise good one, I wouldn’t damage it over this issue, I’d just fix the steps. Yes, I know, tenant/buyers are supposed to “think like owners”, but don’t. They signed a form that says “lease”, so they have that mentality. Plus, if it is really a minor repair, then it should be a minimum of time and expense on your part. I love repairs involving wood, because it’s such an easy material to work with. Remember, ultimately, tenants are our customers in this business. That doesn’t mean you let them walk all over you, in this business or any other. But if it’s a minor thing, that will keep them happy, and make you look like the bigger person, why not do it? Just stress that this isn’t going to be an everytime thing, and the only reason you’re handling THIS minor repair is because there IS a safety issue.
BTW, as to whether the wood really is “rotted” or not, the test most home inspectors use is 20%. In other words, if 20% or more of any one piece of wood is rotted, it should be replaced. As to how to tell if it’s rotted or not, simple. Do what my guy does, poke it with a screwdriver. A screwdriver should not go right through a piece of wood, but I’ve seen it happen more times than I care to recall…
Re: My tenants threatened to sue me!!! - Posted by JohnBoy
Posted by JohnBoy on July 19, 2001 at 22:50:24:
I would consider a hot water heater a minor repair also!
If your contract specifically states they are responsible for repairs then they are breaching the contract by not fixing the problem.
The question here though is, whether this is a minor repair or not. What does your contract say pertaining to minor and major repairs? Does it have a dollar amount stating how much the tenant will pay before the landlord will pay anything? Or is everything left wide open for interpretation between everyone as to what is or what isn’t major or minor???
I would send a certified letter telling the tenant that they are required under their lease agreement to take care of any repairs and that unless they repair the steps within 72 hours you will have no choice but to cancel their option agreement and file for eviction to remove them from the property. There failure to comply by taking care of the repair, per their lease agreement, has caused a serious liability issue not only for yourself as the landlord, but also for themselves since they are in breach of the lease. Any lawsuit filed against you as the landlord should someone get hurt would only result in a lawsuit against the tenant by the landlord to recover any damages the landlord has incurred as a result of the tenant breaching the lease agreement.
In the future I would make my contracts require the tenant to be responsible for ALL repairs & maintenance, period! Then if something major was to come up, you can elect to help them out with the cost of taking care of the problem if you feel it’s in your best interest to do so. If they don’t have the money to cover the cost of the repair then you could help them out by putting up the money and then financing that cost to them and have them make you payments over the remaining time left of their lease.
If you would rather just resolve this matter quickly by avoiding a hassle with them, then why not just go to the home improvement store, pick up some boards and a box of screws and drop them off to the tenant? Here! Now just rip off those old steps and screw these new boards down and the problem is solved!
PS
If you want to be nice about it, pick up a quart of PINK paint and paint the boards yourself and then go replace them for the tenant! Heck, maybe they would like a different color for each step??? LOL
Surely your lease doesn’t require the landlord to have to allow the tenant to decide on what color the materials will be that you must use to repair anything with, does it??? LOL
Re: My tenants threatened to sue me!!! - Posted by BillW.
Posted by BillW. on July 19, 2001 at 22:13:27:
Tarun,
Unfortunately, these tenants don’t sound rational. Even though it might seem like you’re caving in, you might weigh the cost of fixing the steps vs the cost of defending yourself from a lawsuit, even if it is a bogus one.
Next time you might consider adding a clause to the sublease agreement that says any repairs you do the property will be added to the sale price at the closing, and draw interest at the maximum allowable limit from the day of the repair until closing. Then, if you do have to do any repairs, you’ll get your money back with 18 percent or more interest at closing, not to mention which, you’ll bill out the repairs at contractor cost, not wholesale.
Hope you get your problem resolved.
BillW.
You give back ALL there money… - Posted by Roger
Posted by Roger on July 20, 2001 at 10:09:43:
…including option consideration and rent credits? I’ve found most tenant buyers become unhappy, to some degree, toward the end when they realize they can’t qualify for a loan, finding fault with every little thing.
Roger
I received 6.5k in option money!! - Posted by Tarun_MD
Posted by Tarun_MD on July 20, 2001 at 23:45:42:
.
Re: My tenants threatened to sue me!!! - Posted by JohnBoy
Posted by JohnBoy on July 20, 2001 at 24:40:22:
I don’t know how his contract is worded or even what type of relationship he has with the tenants. But from what I’m reading based on his post it sounds like the tenants are starting to take advantage of things here. They supposedly entered into a contract with an option to buy and part of the agreement is that they take care of all minor repairs. He states he noticed the steps when he was over at the house replacing a water heater. In my opinion a water heater is a minor repair. They don’t cost very much. Yet he was there replacing it. It appears they got away with that one. Now it’s the steps, another minor repair. He even stated that he offered to buy the material and add the cost to the purchase price so they wouldn’t have to pay for it now. That evidently wasn’t good enough. Instead they argue it’s not a minor repair. Then they start with threatening to sue if someone gets hurt.
Like I said though, I don’t know his relationship with them or what the wording is in his contract pertaining to repairs. But it sounds to me like the tenants here are trying to take advantage and have stooped to even threaten a lawsuit if they don’t get their way. It sounds to me like it’s time to put the breaks on here and take control of the situation and let them know who’s in control here…and it’s certainly not the tenants, or at least it shouldn’t be. If one of my tenants started with threatening me with lawsuits in an attempt to get their way I guarantee you that will be the end of any more Mr. Nice Guy!
If my contract says the tenant is responsible for the repair then I’m going to hold them to the contract and if they don’t comply they’re on the way out, period! I’m certainly not going to bend over for them by allowing them to threaten me in order to get their way when I know they are responsible for it!
First the water heater, now the steps, and if I fixed that then what’s going to be next? Somewhere along the way you need to draw the line and put them back in there place. When they start with making threats, that’s the time to take control and stand firm by putting an end to it, one way or another!
But that’s just my opinion.
Re: My tenants threatened to sue me!!! - Posted by Alex Samuelson
Posted by Alex Samuelson on July 20, 2001 at 16:17:24:
AS AN INVESTOR I CAN TELL YOU STICK WITH THE ADVICE THAT STU GAVE YOU HE IS RIGHT IN EVERY ASPECT DON’T LISTEN TO OPINIONS YOU DON’T HAVE THAT LUXURY WHEN FACING A POTENTAL LAWSUIT ALSO I WOULD HAVE THEM E-MAIL YOU IN THE FUTURE IT WILL HELP TO PROVIDE YOU WITH GREAT DOCUMENTATION SHOULD ANYTHING EVER RESULT I NOW DO THIS WHENEVER I CAN WITH ALL MY TRANSACTIONS OR TENANTS. RE-WORD YOUR CONTRACT (ONLY IF NECESSARY MAYBE IT ALREADY STATES WHAT YOU NEED) GOOD LUCK!
Re: My tenants threatened to sue me!!! - Posted by eric-fl
Posted by eric-fl on July 20, 2001 at 08:13:48:
Could be. I don’t know how his relationship is with them either. That was why I said, if the relationship has been good otherwise, then to go ahead and do it. And, even as you stated in your previous post, what is minor? If it’s not spelled out, it’s up for dispute. And maybe because I have kids, I draw a distinction when it comes to safety issues. If the fireplace flume was clogged, and needed to be cleaned, I wouldn’t fight over that one either. I’d rather pay a chimney sweep than have some kid die from smoke inhalation. I just don’t think I could live with that. Heck, I’d have probably been a lot more difficult about the water heater than the steps! But that’s just me.
As far as capitulating to threats, no one should ever do that (capitulate). However, you can draw a distinction between the threat, and the repair. You can certainly respond to such a threat in the moment, by stating that a lawsuit automatically voids their option position (some contracts provide for this). Hit 'em where it hurts, in the money belt. But again, I personally draw a distinction between money issues, and the safety of people. And all of this assumes they really are rotted, of course, as opposed to them just being ridiculous. We’re not there, so we don’t know which way it is. But I did include the information on how to make that determination as well.
Re: My tenants threatened to sue me!!! - Posted by Tom
Posted by Tom on July 20, 2001 at 04:29:11:
My tenants threaten me only once. Then they’re on the way out the door.
Re: My tenants threatened to sue me!!! - Posted by Harold
Posted by Harold on July 20, 2001 at 09:23:14:
It’s about the tenants taking responsibility for THEIR FUTURE HOME. If the dang kid died of smoke inhalation it’s not your fault. And I read it the same way Johnboy did. As soon as I saw Tarun say “When I was over there replacing the water heater” - I said to myself, now why was he doing that? Tarun you have to trun this thing around and put the accountability back on them. And I would be more than ready to drop them a 5-day notice the first time they are evn one day late!