How to vacate 15 month-to-month tenants for renovations?

Question

Hi all,

I'm under contract to purchase an 18-unit apartment with 15 of the units on month-to-month leases.

Does anyone have experience vacating multiple apartment units occupied by month-to-month tenants in order to do full rehabs of the units?  I want to be empathetic to the tenants' situations and was thinking of offering "cash for keys" as opposed to simply providing notice to vacate.

If each unit is currently rented for $600/month, how much do you think I should offer for them to vacate?

How long of a time period do you think I should offer to vacate? Is 90 days enough?  Too long?

Any help, anecdotes, feedback would be greatly appreciated.  Thanks,Tony

Mike Dymski · Answer

Provide them with the option to (1) stay in their existing unit and renew at $XXX market rent or provide written notice to move or (2) move into a renovated unit at the same $XXX market rent.  Their choice.  3 months is very equitable to find a place if they choose to move out.  No need for cash for keys.  Treat them with respect and provide written communication.

John Warren · Answer

@Tony S. I have done this before on a property in Berwyn, and it was not easy. We gave 60 days, which used to be more time than was necessary (now 60 days notice is standard here). Many tenants moved out with no issues, but a few had to be forced out with one evening being evicted.

The big thing to check into is whether or not you can legally shut off the utilities even if they are not out on time. Here in the Chicago area, we definitely can't just shut them off even if a tenant is not out. We would then have to wait for the court process which can take up to 6-7 months these days.

Having done this before, I can tell you that being compassionate, and human is more valuable than the legal end of it. Most of the tenants will comply, and a few will have a rough time. I felt better about giving a "moving allowance" or returning a security deposit early as opposed to forcing the issue with the ones who were truly trying to move. Just my 2 cents.

Scott Mac · Answer

I've never vacated an enire property of renters, but telling them all utilites will be off in 90 days for costrucion when you notice them seems smart.

90 days to find new apartments seems reasonble--hopfully they abide by this time line--which covers the Holiday Season and New years. Some places refuse to evict on Christmas eve.

I would personaly talk to any who have not left in 30 days, and for the hard luck stories offer assistance. Some may need phyisical help moving.

Also some may leave tons of debris in the unit, and you will need to be legaly sure they have abandonded it and really moved out, vs being at the Hospital in Chicago visiting an injured relative, then comming home to find 4 guys demoing their unit, and their stuff dumpsteted and long gone.

just my 2 cents.

Kim Meredith Hampton · Answer

Tony,

I am doing a project right now with 12 units, and yes, the investor wants all 12 units vacant within thirty days. Today is our drop dead date, just closed last week. The seller had everyone on MTM, and part of the agreement was to not renew any leases during due diligence. So we ended up with 6 vacant. The contractors can start on the vacant and then we will have the others vacant within thirty days to go right into the rehab as the finish the others.

I know that it may sound cruel, but the tenants probably already expect to move, and are more ready than you think. Most people are aware that rents have went up significantly, and they have been very fortunate to get the lower rent for so long. Some tenants will obviously be upset, so maybe have some options for other available properties in the area or some sort of financial services program phone numbers. You do not need to pull money out of your pocket.

If you confer with the seller, Im sure he can share with you the people who are habitually late, problems or need and deserve extra time to vacate. Then you could stagger the move out notices 30-60-90 days out accordingly.

How to vacate 15 month-to-month tenants for renovations?

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