A tenant in a single-family home that we rent signed a lease renewal 7/1/12 for a third year. He recently said that he may “have occasion to move out” soon and asked if we would consider letting him terminate without penalty since he had found replacement tenants. It turns out he had listed the place on Craigslist (without our permission) and a couple of people had expressed interest. We assumed that he had found a new job out of town, so we said we would reluctantly consider his request. As it turns out our tenant had instead found a bigger house that he wanted to rent in the same general area (that is, he had no compelling need to move).
This morning we received an application from a seemingly qualified couple who needed a decision that day. We also received a phone call from someone else who wanted the property, but needed a definitive answer on when she could move in.
For the past ten or so years, we have always used a property management firm to handle not only finding quality tenants but checking credit reports, previous landlords, etc. We rely on them for their expertise in evaluating tenants. We could save a lot of money finding a tenant ourselves from Craigslist, but they tend to be flaky in our experience.
Feeling pressured, we told the tenant that he had to go through our property management firm who, of course, would charge one months rent for his services. The tenant is outraged that we aren’t being “cooperative” and is unwilling to pay $2,200 for the agent “to do a simple credit check” on what he considers a qualified tenant. He doesn’t understand that we don’t want someone from Craigslist, we don’t want to screen potential tenants, and we don’t want a lease that renews in November.
This tenant has been a royal pain in the past, but he does pay the rent. It’s pretty clear he has been looking for a new place for a while. If this was the spring or summer, not November, we would consider letting him leave early without penalty. But it isn’t, we don’t like feeling pressured, and we want to have an independant third party handle the transaction.
I would love to know how other people would handle this situation. Thanks.
What you are legally required to do will be defined by the state. As a general principle you likely have to mitigate the cost to the tenant. That does not mean they get to dictate the process. At the same time you have to be reasonable in terms of the costs triggered by your process. If you have a standard process and you want to follow it, I would assume that will be OK. If you were somehow causing the costs to rise (dragging your feet, using a higher priced service than you would normally do), that is not going to sit well with a judge.
As to being pressured, that is a mixed bag. You need to start taking action and deal with the issue rather than just drag things out because you are feeling pressured.
Has the tenant provided a specific date by which he intends to move out? Are you certain he will move? You do not want to be incurring costs associated with a change if the tenant then decides not to move. Make sure they are legally committing to a specific termination date so you can then actively market the property. While it might be suboptimal that it is Nov, that is not a reason not to implement a search. If there is a cost or downside to it being Nov then you can pass that on.
As to the Craiglist candidates. Run them through the same process. If that means they have to apply through an agent and there is a fee for the screening, oh well. Just be consistent in the process so there is no bias in how you select the future tenant.
T eviction laws are easy to find and you just need to do so and learn those current (change rather frequently) and realize you MUST be in total compliance with them.
e.g WA statutes, landlord-tenant, eviction and this same logical process with find online for any state.
Today lots of larger towns and cities are in the act and have existing ordinances relating to the rental business. Larger libraries or city clerk can provide info on their local code & regs.
I agree with John Corey that you should run his candidates through your existing process (at his expense). You are not being unreasonable; however, you must mitigate your loss. The first thing that I would require is for your tenant to tell you in writing that he is terminating the lease early and what date. Until he does that, I don’t think you have any reason to take action. He may reconsider his options if he is forced to put his intentions in writing.
Thanks all for the feedback. The tenant has been incessantly badgering our agent and us with phone calls and emails for the last several days. He refuses to sign the break lease agreement that the agent has given him. He is now trying to ‘negotiate’ it (we just refer him back to our agent).
So far he has…tried to get the agent to handle the transaction for $100, told the agent that he knows nothing about the law (this guy is an engineer), told the agent he was going to get his own agent and/or attorney to handle it for free, told us that “the spirit of the contract” allows him to break the lease, and on and on.
We know that we have to mitigate our damages (if he proceeds). We just want to do it right. And I don’t trust the tenant or any of his associates to handle this. This guy is a control freak who is having a meltdown because he hasn’t gotten his way.
I feel sorry for the poor schmuck who the tenant found and whose life is in limbo while the tenant tries to get off the hook for any responsibility in breaking the lease. But there is no way we can proceed without a break lease agreement in place. Any further feedback is appreciated.
I just last year watched a poor & messy tenant get motivated and out of the RE after its owner offered the T $1000 if the T vacated by 1st of next month and left the place sparkling clean and it worked.
I had wondered how anybody could get that T & his trash gone but by golly Big Green Bill did the job.
It’s gotten ugly. Since the tenant has not gotten his way, he is now threatening to report us to all kinds of Government agencies for a variety of manufactured violations (e.g., he has just ‘discovered’ mold in the basement that must be remedied immediately and that is the ‘likely cause’ of his son’s respiratory problems, there is a hairline exterior crack that was there when we bought the place 25 years ago and was determined to be normal settling - but now requires immediate determination of habitability by a structural engineer and code enforcement, etc.).
Any thoughts on how to deal with this lowlife would be greatly appreciated. I really didn’t think that he would stoop to this. He’s a former FBI agent who probably has high level clearances and needs them for work.
I hate to let him get away with this, but I really don’t need the aggravation and costs of dealing with the retribution that he is implying.
For what it’s worth, my lease is a one year lease, that turns into a month to month lease after the one year has elapsed. So your tenant with my lease would only need to give me a months notice.
He’s been there over 2 years, evidently paid the rent on time, has even tried to get you tenants. Why don’t you just have your property manager start marketing the property? You don’t have to continue on with this dispute.
[QUOTE=John Merchant;887272]Just curious if any of us LLs have EVER collected from a delinquent T and would like to tell us how you did it.
One of the few things most lawyers in pvt practice would agree on is how rarely they are able to collect on their file cabinets full of old Judgments.[/QUOTE]
I’m just now completing the collection on one tenant. As I recall, she agreed to a consent judgment on about $1800, which she paid out at $75 per month…and was late every month! She had a job that was good enough that she was unwilling to leave, and in fact, did not want her pay garnished.
I’ve just gotten a judgment against another tenant, who works for Home Depot. I’ve just filed a garnishment with the Sheriff. We’ll see if I can collect. I think I can because I’m doubting that the tenant will leave his job.
Other than that. Zip. I had one tenant who actually moved out of my place and bought a house free and clear. I can’t get an attorney interested in pursuing that. These last few years I’ve made a big attempt to only rent to people who are collectable. Even at that it fails, like the woman who quit her job at ADT and disappeared.
Ben - We always have year-to-year leases, even for renewals. We don’t want to have someone leave in the winter - which is what this guy is doing. December is dead for rentals around here - probably January, too. And the tenant did pay the rent - but it was beyond the five day grace period at least half of the time.
In any case, we decided to let this guy go, since he plans to anyway. Plus who knows what kind of havoc and damage he would have caused if he stayed. If he’s willing to blackmail us, there isn’t much he isn’t willing to do.
Once he is gone, we will probably use this dead time to spruce up the house - maybe remodel the kitchen and bathrooms.
Our tenant is expecting to get his security deposit back. However, our lease calls for a $210 administrative fee every time his check is late. This can be deducted from the security deposit, which we fully intend to do. Since he’s been late 10-15 times, the total will be more than his security deposit. If there’s a deficiency, I’ll file for a judgment against him. I’d love to be a fly on the wall when he finds out about this. Normally, I would not enforce this provision of the lease, but I sure will now.
John - Our tenants have always been white-collar professionals - lawyers, military officers, engineers, management types. I doubt any of them earn less than 100k/year. They are not deadbeats. That’s why I’m so surprised that this guy - a senior account manager for a large military-oriented firm where he almost undoubtedly needs a high level clearance - would pull this crap.
I’ll keep you posted on further developments, if any. Thanks for your continued feedback.
[QUOTE=wordsmth;887281]Ben - We always have year-to-year leases, even for renewals. We don’t want to have someone leave in the winter - which is what this guy is doing. December is dead for rentals around here - probably January, too. And the tenant did pay the rent - but it was beyond the five day grace period at least half of the time.
[/QUOTE]
Yes, I understood you have year to year leases. I was just pointing out that had your tenant been on the lease we routinely use he could have moved without penalty if he gave a months, after the first year.
Our experience has been that the tenants leave anyway if they have some reason they want to. That lease is not going to stop them. Requiring the months notice hopefully gives us some time to perhaps find a new tenant prior to the move out, assuming there is no damage.
BTW, our experience for December and January is that it does slow, but we are still successful in renting properties at that time. Just rented a duplex unit to a very good tenant about a week ago.
The pro LL does not bother w YTY “lease”* because in reality the T can walk anytime he’s ready and only rarely can the LL collect.
And even if a true legal lease actually exists and the loser T actually violates it he’s usually not damaged by court judgment against him so LL’s money spent on such collection is normally wasted.
I’ve long maintained that all Ts should try for the YTY Lease because it gives that T relative security against early eviction for at least a year; but every LL should resist the YTY for exactly that reason and the normally futility of collecting from the bad T.
e.g. in WA State a YTY “lease” must be written, signed AND NOTARIZED and the absence of ALL those statutory requirements render it only a MTM rental agreement so its pretty rare for such to be created in WA.
Your state’s legal definition might be equally rigid and exclusionary.Because the state-to-state statutory definition of a YTY lease is so tough it’s rare that even docs so named ared legal leases.
I once bought a house at great price from highly motivated elderly owner where her T claimed she had 5 years remaining on her YTY lease…but when she finally produced for my examination it wasn’t notarized so was only MTM and I had her out within 6 weeks.
John - why is the tenant not damaged by a court judgment against him? Why is it so hard to collect against tenants?
We’ve had dozens of tenants in five different properties over the years. Some have been difficult for different reasons (lawyers are the worst) - but most have been reasonably honest and well-meaning. We’ve never encountered anyone like this guy. Maybe we’ve just been lucky.
It gets better and better. My husband called a utility to have the bill transferred to us, and the clerk inadvertently ‘confirmed’ our address as one we’d never heard of. Turns out it’s the tenant’s new address.
Looking up the rental transaction for the new place, it’s clear that the tenant had his own agent representing him-which means he didn’t just stumble upon a great deal. He was actively looking with an agent.
The new property was listed through another real estate firm. So there were two real estate agents involved in this transaction for a property that rents for almost $3,000/month. But neither one called us to check this guy’s rental history. Something smells. Either both of these agents were grossly negligent, or the tenant ‘found’ someone to vouch for his tenancy in our property.
The new landlord has paid a hefty commission and is now stuck with a tenant from hell - and he doesn’t realize it. Any thoughts?
Fast forward…the tenant has moved out and we sent him an itemization of deductions from his security deposit, citing several instances of damage to the property and witholding some monies until he provides proof that he paid the last month’s utilities and took care of maintenance items required by the lease (carpet cleaning, chimney cleaning).
He is threatening to sue us unless we return his entire security deposit. He claims that a less than 1’ x 1’ area of moldy drywall in the basement - which he never notified us about - has caused his son health problems. He also plans to notify every government agency he can find regarding the fake housing violations that he made up. He also says he will sue for housing discrimination since the tenant that he found (and we never rejected - they moved on) was Indian.
Any thoughts? My husband is not willing to give into this jerk any longer.