TRAPPED in a Bad House Hacking Situation due to COVID-19 Laws

TRAPPED in a Bad House Hacking Situation due to COVID-19 Laws

Hamtramck, MI · Member since 2018 · 25 posts · 5 votes

I decided to try house hacking with my first Duplex, I'm living on the top unit and renting out the bottom unit. I rented the other unit out on a month-to-month basis in the beginning of March, right before the corona virus scare really started to ramp up here. I should have been more strict about the few red flags when screening this tenant (540 credit score, no landlord references) but I had gotten 30+ applicants all with similar disqualifiers in the month that I had been advertising the rental, and I thought I would have to lower my standards a bit if I was ever going to get the place rented out.

Everything was ok for the first few weeks, but then I started smelling smoke in my upper unit. The tenant claimed not to smoke, but on several occasions I am smelling smoke drifting up through their ceiling, through my floor into my bedroom and living room where I am forced to breath it in my own home. (I am not a smoker) This is especially bad since I am having to stay home more often due to the quarantine.
I confronted them several times about this but their behavior has not stopped. 

They often end up fighting and arguing with each other (non-physical fighting, from what I'm told. I did hear loud banging around because apparently when one of them is upset he likes to use the cabinets as a punching bag) 

One time their loud yelling argument spilled out onto the front yard and neighbors called the police on them.

It has now been almost a month since they moved in and they still have not put the gas + electric utilities in their name (these utilities are NOT included in the lease) The ONLY fortunate thing is that they have SS income that is sufficient to pay the rent at least...

This problem is obviously MY fault for not being through enough in my screening process and for allowing them to move in before getting the utilities in their name... I made the decision to let this into my life and now I need to figure out what to do about it. In normal times, the solution would be to not renew the lease at the end of the month since it's only a month-to-month lease, and give them a 30 day notice. However, the corona virus laws are prevent me from removing these tenants.

So right now, even if I did not renew the lease and give them a 30 day notice, I would not be able to actually get them removed. They would have no incentive to continue paying the rent with their SS income, and their behaviors would likely get even worse (intentional property damage or damage to my car which I park outside?) and I would be labeled by society as the "bad guy" for trying to remove tenants during a quarantine, even though they are degrading my own quality of life since I have to live right above them and am forced to breath their smoke and listen to their screaming contests.

So is my only option to simply continue to confront them about their lease violations, but not to actually cancel the lease until the state of emergency/disaster is over? I have heard reports of this lasting until June, and I do not want to keep living like this until then.

Should I preemptively cancel the lease now and and give them a 30 day notice, not accept May's rent, and hope that the courts open back up and begin to allow me to legally remove a tenant by the time the 30 day notice is finished?

Cash for keys?

At the very least, this has been a great learning experience on how NOT to house hack. Once I eventually get these tenants out, I'm considering not even renting the other unit out until I am able to buy a single family house for myself to live in, and then hiring a PM to rent out both duplex units, since I'm obviously not able to handle tenants directly myself...

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
6y

Suck it up and live with it til life returns to normal. If you cant evict, any remedies are going to backfire.

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  • Rental Property Investor · Manitowoc, WI · Member since 2016 · 178 posts · 186 votes
    6y

    Good on you for recognizing you made a mistake.

    At the very least, you should mail (certified) them a notice to cure as I'm sure their smoking and noise disturbances are probably violating terms of your lease. Then you should continue sending notices as they continue to violate the lease. This should make things easier on you when the eviction moratoriums are gone.

    Just not sure there's anything you can do to get them out right now besides cash for keys, but even then I doubt they'll take it since they know they have a potentially free & no consequence living arrangement for the foreseeable future.

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    6y

    Suck it up and live with it til life returns to normal. If you cant evict, any remedies are going to backfire.

  • Hamtramck, MI · Member since 2018 · 25 posts · 5 votes
    6y
    Originally posted by @Brad L.:

    Good on you for recognizing you made a mistake.

    At the very least, you should mail (certified) them a notice to cure as I'm sure their smoking and noise disturbances are probably violating terms of your lease. Then you should continue sending notices as they continue to violate the lease. This should make things easier on you when the eviction moratoriums are gone.

    Just not sure there's anything you can do to get them out right now besides cash for keys, but even then I doubt they'll take it since they know they have a potentially free & no consequence living arrangement for the foreseeable future.

    Yes, definitely my mistake in not following the screening/move-in process closely enough, I caused this problem and now I have to figure out the smartest course of action moving forward. I do have a "no indoor smoking" policy and a "quiet enjoyment" provision in the lease, which they have violated multiple times. I have been keeping track of the lease violations for my own records, but I have not thought to send them any letters about it. I personally confront them about it. But I can see the value in having an official certified paper trail of each of their lease violations to help with the eviction process. 

    But keep in mind, this is a month-to-month tenancy so I believe I should not have to "prove" that the lease was violated as a reason for not renewing the lease, as long as I provide a 30 day notice? But this is still a good idea just to have extra documentation in my favor in case it ever does go to court.

  • Rental Property Investor · Manitowoc, WI · Member since 2016 · 178 posts · 186 votes
    6y

    @Miles Rose always a chance they turn into holdovers regardless of your 30-day notice, and at that point you’ll want all the documentation you can possibly have for eviction

  • Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    I would check to see if the local “no eviction” rule is really no evictions or just no evictions related to covid 19
    i would read your local tenant landlord laws. Then send/post notice each time they break the terms of the lease. 

  • Hamtramck, MI · Member since 2018 · 25 posts · 5 votes
    6y
    Originally posted by @Mary M.:

    I would check to see if the local “no eviction” rule is really no evictions or just no evictions related to covid 19
    i would read your local tenant landlord laws. Then send/post notice each time they break the terms of the lease. 

    It seems like the law is stating that evictions cannot be filed specifically for non payment of rent for the duration of the governor of Michigan's executive order. 
    https://michiganlegalhelp.org/self-help-tools/housing/covid-19-coronavirus-and-eviction-cases
    "tenants will not be evicted if they aren’t able to pay all their rent during the emergency. The EO also tells courts to stay (put on hold) all current eviction cases until after the emergency has passed."

    Even if I am able to initiate an eviction for the other lease violations, the courts have put all "current" eviction cases on hold until April 14th, but "may be extended depending on the circumstances between now and then".

    https://www.congress.gov/116/bills/hr748/BILLS-116hr748eas.pdf

    Page 558:
    "(d) RENTER PROTECTIONS DURING FORBEARANCE PERIOD.—A multifamily borrower that receives a forbearance under this section may not, for the duration of the forbearance— (1) evict or initiate the eviction of a tenant from a dwelling unit located in or on the applicable property solely for nonpayment of rent or other fees or charges; or (2) charge any late fees, penalties, or other charges to a tenant described in paragraph (1) for late payment of rent. (e) NOTICE.—A multifamily borrower that receives a forbearance under this section— (1) may not require a tenant to vacate a dwelling unit located in or on the applicable property before the date that is 30 days after the date on which the borrower provides the tenant with a notice to vacate; and (2) may not issue a notice to vacate under paragraph (1) until after the expiration of the forbearance" 

  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    6y

    @Account Closed Cash for keys may be your best and only options.  Offer them a full security deposit return + X dollars to leave with all their belongings.  If you are set on getting them out this will be the cheapest and most efficient way to do so.  

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  • Rental Property Investor · New York City, NY · Member since 2017 · 493 posts · 386 votes
    6y

    @Miles Rose

    Thank you for sharing your post.. Too many get allured w house hacking thinking it’s an easy way to create wealth but many forget about the issues that may arise and having landlord/tenant disputes w your neighbor can be an added stress.. That is why I’m glad my tenants are over 500 miles away

    I agree with what others have mentioned sending a certified mail or an email to stop the smoking remember you want everything in writing not verbal. Also waiting until this Covid-19 crisis is over is probably your best bet. Did tenant at least pay you rent for April?

  • Hamtramck, MI · Member since 2018 · 25 posts · 5 votes
    6y
    Originally posted by @Raul R.:

    @Miles Rose

    Thank you for sharing your post.. Too many get allured w house hacking thinking it’s an easy way to create wealth but many forget about the issues that may arise and having landlord/tenant disputes w your neighbor can be an added stress.. That is why I’m glad my tenants are over 500 miles away

    I agree with what others have mentioned sending a certified mail or an email to stop the smoking remember you want everything in writing not verbal. Also waiting until this Covid-19 crisis is over is probably your best bet. Did tenant at least pay you rent for April?

    Yes I doubt I'll be house hacking again after this. Today I'm going to be sending a letter via certified mail about their lease violations so that I can have a well documented paper trail if things ever do end up going to court. They did at least pay for April's rent, most of which I will probably end up returning to them in the form of "cash for keys" once the corona crisis is over. 

  • Hamtramck, MI · Member since 2018 · 25 posts · 5 votes
    6y
    Originally posted by @Matthew Irish-Jones:

    @Account Closed Cash for keys may be your best and only options.  Offer them a full security deposit return + X dollars to leave with all their belongings.  If you are set on getting them out this will be the cheapest and most efficient way to do so.  


     Yes I agree, however the more I read about the eviction memorandum laws, I'm uncertain if even cash for keys is a viable option during the "crisis". Even though it is not technically an "eviction" it seems like kind of a legal grey area

  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    Make sure your name is out of the utilities bill or they'll continue to suck it dry. You do not have to give them those amenities as part of the lease so thats an actionable item today.

  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    6y

    In the future you  can put a shut off date for utilities in with the utility company and tell the tenant the date they must have utilities in their name.   If they don't put the utility in their name by then the utility company shuts it off.  This is usually the move in date.   Sometimes the utility company will accept a date from them a few days after your shut off but leaves it on in between sometimes not. Alternately ask for proof of switch over, particularly if it is heat. 

  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    6y


     Yes I agree, however the more I read about the eviction memorandum laws, I'm uncertain if even cash for keys is a viable option during the "crisis". Even though it is not technically an "eviction" it seems like kind of a legal grey area

     NO WAY. Cash for keys will just compound your mistakes further. Professionally run property management companies would only use eviction to remove tenants. It is the only way to legally permanently remove tenants. The tenant could take your cash and stay in the property. Once you offer them money, the power fully transfers to them.

    More importantly, most tenants will leave when they are asked to. Once you file eviction, most people disappear before the hearing. So when people tell you "cash for keys works", the reality is the tenant would have left anyways, so the money did nothing.

    First thing you need to do is give formal notices of lease violation instead of telling them to stop doing things. Smoking could be a lease violation. Noise could be a lease violation. Police coming to the property could be a lease violation. It really depends on what is in your lease. For me, all these things would violate my lease and would result in written warnings. Document each written notice. 

    The reason you document the lease violations is so you have documentation to support eviction. Without documentation, none of it happened. Even verbal conversations, keep a log of time/date of conversation and summarize. Even if you never have to evict them, you want documentation just in case.

    I would avoid giving notice of non-renewal during COVID-19. Courts in some jurisdictions have already warned landlords to not use non-renewal as a way around the eviction moratorium. Having documented lease violations may work, but honestly I would ride this out until COVID-19 passes. If things get worse, I would proceed with eviction regardless of COVID-19. 

  • Hamtramck, MI · Member since 2018 · 25 posts · 5 votes
    6y
    Originally posted by @Joe Splitrock:
    Originally posted by @Account Closed:
    Originally posted by @Matthew Irish-Jones:

    @Account Closed Cash for keys may be your best and only options.  Offer them a full security deposit return + X dollars to leave with all their belongings.  If you are set on getting them out this will be the cheapest and most efficient way to do so.  


     Yes I agree, however the more I read about the eviction memorandum laws, I'm uncertain if even cash for keys is a viable option during the "crisis". Even though it is not technically an "eviction" it seems like kind of a legal grey area

     NO WAY. Cash for keys will just compound your mistakes further. Professionally run property management companies would only use eviction to remove tenants. It is the only way to legally permanently remove tenants. The tenant could take your cash and stay in the property. Once you offer them money, the power fully transfers to them.

    More importantly, most tenants will leave when they are asked to. Once you file eviction, most people disappear before the hearing. So when people tell you "cash for keys works", the reality is the tenant would have left anyways, so the money did nothing.

    First thing you need to do is give formal notices of lease violation instead of telling them to stop doing things. Smoking could be a lease violation. Noise could be a lease violation. Police coming to the property could be a lease violation. It really depends on what is in your lease. For me, all these things would violate my lease and would result in written warnings. Document each written notice. 

    The reason you document the lease violations is so you have documentation to support eviction. Without documentation, none of it happened. Even verbal conversations, keep a log of time/date of conversation and summarize. Even if you never have to evict them, you want documentation just in case.

    I would avoid giving notice of non-renewal during COVID-19. Courts in some jurisdictions have already warned landlords to not use non-renewal as a way around the eviction moratorium. Having documented lease violations may work, but honestly I would ride this out until COVID-19 passes. If things get worse, I would proceed with eviction regardless of COVID-19. 

    I don't see how cash for keys would necessarily give all of the power to the tenants if the terms for the cash for keys agreement are written down and signed by the tenant. After they have removed all of their belongings and handed over the keys, I would pay them and then I would be free to immediately change the locks and they would have no legal recourse to try to move back in since they signed the cash for keys agreement stating that they would move out. (They could try to illegally squat in the place though)

    That being said, due to the Covid-19 "crisis" I am weary to use cash for keys right now since it could be seen by a tenant friendly court as some kind of a "shady loop hole" to get around the eviction memorandum. 

    Today I did send the tenant a certified letter for breach of the lease terms, my plan is to continue to send them certified letters until the "crisis" is over and the courts open back up and I'll have a good amount of documentation to back up my case if it needs to go to court as a worst case scenario 

  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    6y


     Yes I agree, however the more I read about the eviction memorandum laws, I'm uncertain if even cash for keys is a viable option during the "crisis". Even though it is not technically an "eviction" it seems like kind of a legal grey area

     NO WAY. Cash for keys will just compound your mistakes further. Professionally run property management companies would only use eviction to remove tenants. It is the only way to legally permanently remove tenants. The tenant could take your cash and stay in the property. Once you offer them money, the power fully transfers to them.

    More importantly, most tenants will leave when they are asked to. Once you file eviction, most people disappear before the hearing. So when people tell you "cash for keys works", the reality is the tenant would have left anyways, so the money did nothing.

    First thing you need to do is give formal notices of lease violation instead of telling them to stop doing things. Smoking could be a lease violation. Noise could be a lease violation. Police coming to the property could be a lease violation. It really depends on what is in your lease. For me, all these things would violate my lease and would result in written warnings. Document each written notice. 

    The reason you document the lease violations is so you have documentation to support eviction. Without documentation, none of it happened. Even verbal conversations, keep a log of time/date of conversation and summarize. Even if you never have to evict them, you want documentation just in case.

    I would avoid giving notice of non-renewal during COVID-19. Courts in some jurisdictions have already warned landlords to not use non-renewal as a way around the eviction moratorium. Having documented lease violations may work, but honestly I would ride this out until COVID-19 passes. If things get worse, I would proceed with eviction regardless of COVID-19. 

    I don't see how cash for keys would necessarily give all of the power to the tenants if the terms for the cash for keys agreement are written down and signed by the tenant. After they have removed all of their belongings and handed over the keys, I would pay them and then I would be free to immediately change the locks and they would have no legal recourse to try to move back in since they signed the cash for keys agreement stating that they would move out. (They could try to illegally squat in the place though)

    That being said, due to the Covid-19 "crisis" I am weary to use cash for keys right now since it could be seen by a tenant friendly court as some kind of a "shady loop hole" to get around the eviction memorandum. 

    Today I did send the tenant a certified letter for breach of the lease terms, my plan is to continue to send them certified letters until the "crisis" is over and the courts open back up and I'll have a good amount of documentation to back up my case if it needs to go to court as a worst case scenario 

     It gives them power because as soon as you offer them money, you are seen as weak. They realize you don't think you can remove them without paying them. They dictate the terms. A signed agreement is worthless to someone who is already violating their lease, which is also a signed agreement. Eviction is a court ordered removal that is enforceable by the sheriff. Sheriff will not enforce a cash for keys agreement.

    My guess is they will just leave when you serve them a 30 days to vacate notice. Good you are keeping documentation just in case.

  • Member since 2020 · 1 post · 0 votes
    6y

    Lien Vuong great advice! You have to turn up the pressure and keep record of everything.

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