Rental Property Investor · Phoenix · Member since 2018 · 29 posts · 12 votes
Curious for thoughts on what went wrong...thank you for your insights! My tenant stopped paying rent and had to be evicted. While I'm thrilled this person is out, I'm out 3 months rent, plus legal fees and now about $2k in damages. Broken window, stained carpet, significant cleaning of things like maggot infested garage, rotting food in warm fridge, urine in corners of carpet. I use a property manager. In reviewing the tenant online on my own, I found a criminal record on this person, with mug shot (so no denying this is the person), with 'claims substantiated'. Wouldn't this type of thing be caught in a background check? Anyone willing to share the tenant screening process you use? (this is in Arizona - Phoenix) Thanks again.
Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
4y
And this is why I self-manage. It takes little time and I don't have to rely on someone who isn't nearly as invested in my property as I am.
Ask your PM for a copy of the credit/criminal check they had on this tenant. How old was the charge/mugshot? I know some states expunge from the docket after X-amount of years, even for serious crimes.
I check the docket online even before I have my local apartment association do a search. They do additional searches (Megan's Law database, the other 49 states, etc.).
Sue the tenant and get a judgement against him. Then when he likely doesn't pay you, go to the prothonotary's office and get a lien against him and renew it every X-amount of years - varies by city. If he ever inherits anything, someday sells a house or gets a lawsuit windfall you'll be paid.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
4y
Read the book 'Managing Rental Properties by Brandon Turner'. Develop your own screening process if you intend to self manage.............don't continue with that PM. Sooner or later we will all be where you are now; some worse and some unimaginably bad and others just fine. Get it rent ready and all the best!
Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
4y
And this is why I self-manage. It takes little time and I don't have to rely on someone who isn't nearly as invested in my property as I am.
Ask your PM for a copy of the credit/criminal check they had on this tenant. How old was the charge/mugshot? I know some states expunge from the docket after X-amount of years, even for serious crimes.
I check the docket online even before I have my local apartment association do a search. They do additional searches (Megan's Law database, the other 49 states, etc.).
Sue the tenant and get a judgement against him. Then when he likely doesn't pay you, go to the prothonotary's office and get a lien against him and renew it every X-amount of years - varies by city. If he ever inherits anything, someday sells a house or gets a lawsuit windfall you'll be paid.
Rental Property Investor · Phoenix · Member since 2018 · 29 posts · 12 votes
4y
I appreciate your ideas above, @Bjorn Ahlblad and @Karl B.! The mug shot is from 2019, along with a list of the history of filed complaints. Karl, is the judgment you reference above and beyond the eviction judgement that outlines that damages may also be assessed? Thanks again.
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Karl is most likely talking about a Small Claims Court judgement. Even though this guy is probably a 'non-collectable' as they are called, once you get the judgement recorded, it will follow him around like a bad dream. No more loans to buy a house or even car. It will show up on credit check when he applies for anything including a job.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
4y
That’s a lot of damage for only being there a year. Hopefully the security deposit covered most of the damage (at least it’s a pretty cheap make ready. that’s really not a lot more than a simple repaint or recarpet could run.) it’s mostly the missed rent and vacancy that’s a real killer.
It certainly sucks if you only have one property or just got in to rentals. But after 5-6 properties and 5-6 years “problems” under $5-$10k just aren’t problems. I just spent $2k replacing 2 garage doors. They just wear out. But having someone paying rent solves almost all problems. Get someone in there paying.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
4y
Without a doubt, it sucks. I know the heading on my PM’s request for repairs “address: request for quote approval”. And I used to be upset because it was always a $500-$1500 appliance or other repair I wasn’t expecting to pay for this month. Then I got one for $10k for a sewer line repair and learned others weren’t such a big deal. :-)
Rental Property Investor · Phoenix · Member since 2018 · 29 posts · 12 votes
4y
@Bill B., ouch!!! That really does change the game! My husband and I are handy, thankfully, so tackling as many of the repairs as we can to help ensure cash flow. (it seems to be keeping us sharp and strong too! LOL) Looking forward to better margins in the future! Thanks again.
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
4y
@Elizabeth Schartman appreciate your asking "what went wrong?" but I hope you know the answer. This is a complete screening fail. They simply didn't do any screening no matter what they told you they did. If you haven't already fire them please, and expose them. Most PM contracts have a get out of jail mostly free card but this borders on gross negligence (an important distinction from simple negligence) if you could unearth that from a simple google search and you may have a case to collect.
Most likely too much of a pain to do the above, but: did you ask to see the credit report and background check? Whatever you do don't use the PM for anything else.
Rental Property Investor · Phoenix · Member since 2018 · 29 posts · 12 votes
4y
Thanks @Jonathan R McLaughlin, I was told they couldn't share the credit check, but gave me the FICO score. Got a screenshot of the background check showing no criminal background issues. The argument is that the person was arrested but not convicted. There is a laundry list of criminal accusations against this person and in 2010 one these claims is 'substantiated'. The others are 'unsubstantiated'. There was a review of rental history, but it only shows 9 months (not the full year) and there wasn't a phone call to the landlord to question that, since the assumption is that the landlord wouldn't divulge any negative information. Salary check was based on a paystub, but no phone call to verify employment or length of service. I'm reading BP's Ultimate Guide to Tenant Screening now and creating my own list for next time.
@Elizabeth Schartman If you decide to change property managers and want a referral let me know. I have sfh's in the Phoenix area and have used my current company since 2012, with very good results. I have self managed successfully with some bumps in the road, which we all have and used other property mgmt. companies that were not any good.
Property Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes
4y
@Elizabeth Schartman I completely agree with @Bill B.'s remarks regarding the cost of repairs and maintenance and the mindset that you have to have as a landlord. But I also agree with you that it sounds like your PM did a poor job of qualifying the tenant. Criminal backgraound can be really tricky with today's Fair Housing laws but the past landlord verification and emplyment verification was apparently not properly done. I do agree that you need a new PM!
A short story for you, we completely screened and verified new tenants for an apartment, moved them in in August. By September we realized that our approved tenant moved in some other people with very bad records. It took us the month of October to get them out and yes we had over $2000 in damage and repairs plus legal fees. We had 2 separate attorneys reveiw our files and they both ran their own background checks and they both said that we did nothing wrong, we got scammed. My reason for telling you this is because I feel we are a very good and reputable PM company and it happens to us now and then also. Not all tenants are good people, the trick is to find the good ones.
I appreciate your ideas above, @Bjorn Ahlblad and @Karl B.! The mug shot is from 2019, along with a list of the history of filed complaints. Karl, is the judgment you reference above and beyond the eviction judgement that outlines that damages may also be assessed? Thanks again.
You would have to take him to court a 2nd time to get anything not included in the eviction judgement. When I got the lien put on the former tenant I put it on the eviction judgement - luckily he didn't damage the property on purpose - mainly some repainting and so there was no need for me to sue him again.
But if the tenant had done a lot of damage to the place I would have done so.
Rental Property Investor · Durham, NC · Member since 2015 · 69 posts · 32 votes
4y
Should have been flagged, I know there are no perfect tenants, but I hope your PM did most of the heavy lifting in evicting and getting you another tenant?
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
4y
@Elizabeth Schartman I stand by my "get a new PM" statement. Not sharing the credit report is a CYA thing and they could have and should have simply googled the name like you did. It should be standard, and they know how limited background checks are. 9 months of history should have been a red flag too.
Their "assumption the landlord wouldn't divulge any negative information" is a bad one and an after the fact justification for the fact they didn't call. With only 9 months should have been easy to get the one before--you may want to add that to your criteria (2 landlords) if the rent is under a certain term.
I would actually agree that an arrest vs. a conviction is fundamentally different and not to be unjustly discriminated against but it should serve as a starting point for more careful due diligence.
And even at this, one of the criminal complaints was "substantiated" amid a "laundry list" of accusations. I mean, good lord what was your PM thinking and why did you sign off on this? It couldn't scream louder of problems.
Definition of insanity is doing the same thing and expecting a different result. Get a new PM and take a close look at your approach. I mean, you saw the info and said go ahead.
Not trying to beat you up; trying to make you realize this isn't bad luck, it is an error of approach and your approach should be changed if you want to be successful.
Curious for thoughts on what went wrong...thank you for your insights! My tenant stopped paying rent and had to be evicted. While I'm thrilled this person is out, I'm out 3 months rent, plus legal fees and now about $2k in damages. Broken window, stained carpet, significant cleaning of things like maggot infested garage, rotting food in warm fridge, urine in corners of carpet. I use a property manager. In reviewing the tenant online on my own, I found a criminal record on this person, with mug shot (so no denying this is the person), with 'claims substantiated'. Wouldn't this type of thing be caught in a background check? Anyone willing to share the tenant screening process you use? (this is in Arizona - Phoenix) Thanks again.
Hi Elizabeth!
If you are wondering if there is legal recourse with the PM, definitely call an attorney. They carry liability, for sure- but ask an attorney if you are considering that.
If you are asking about what to do in the future, vet the PM's you are considering- interview them. I interview every company I'm thinking of working with. If they promise something and they fail, then it's on them to make it right. It's a shame that happened, on several levels.
I recommend you research recommended tenant vetting. Either you will do it, yourself. Or, you can ask the PM's how they vet, and compare that to the recommended routes.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
4y
It totally depends on your local laws on what can and can not be used to deny a tenant. So first learn your local laws. This will allow you to be more informed and it may answer your question on "how" .... But PMs can be pretty bad - I am dealing with a tenant that a PM put into my building before I owned it - this tenant has BKs and evictions and yet somehow they approved them. This tenant has not paid me in almost a year. it totally sux. What I have done is applied for funds from the covid funding and maybe you can do that too to get your unpaid rent paid. Worth a shot. I should get all my back rent paid. we shall see.
If you want to self manage please get educated. Contact your local rental owners association and see what they offer class wise.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
4y
As for calling an attorney - while you should have an attorney on retainer involving an attorney further in this will cost more than the cost of repairs for the unit. First read your local laws - it may be that you can not deny an applicant for criminal conviction unless they are violent or monetary .....
Property Manager · Queen Creek, AZ · Member since 2016 · 608 posts · 426 votes
4y
@Elizabeth Schartman I agree with many of the sentiments above that this tenant should have most likely been screened out on the front end. The part I don't understand is why it took 3 months to get rid of them? In Arizona, our evictions rarely run for more than 30 days, even during COVID times. We give a 5 day Notice, which is provided to the attorney that files the eviction in a couple of days typically, court date a few days after that, and boom in less than 30 days the tenant is gone.
Thankfully we only have to do about 1 eviction per year on average but 3 months is too long!
One consolation prize you may benefit from is that the AZ rental demand is very high and rents are up. I have one Phoenix property on the market right now that is experiencing heavy traffic. We are filtering the tenants to find the right one for the property! I often tell tenants it's fairly simple, we want someone that will pay the rent and take care of the property, getting there correctly takes time and effort! It's not about picking the first one, it's about finding the best one! We put a lot of effort into screening and it results in many long-term good tenants.
Auburn NY · Member since 2019 · 97 posts · 56 votes
4y
@Elizabeth Schartman no one's.capable of.caring about your investments better than you. Cash on hand is preparation. The Tenant is as important if not more than the property. I always.try to pay the.tenant for keys.(Usually cheaper) .Get good at screening. It's not that hard once you know how to do it
Las Vegas, NV · Member since 2018 · 405 posts · 474 votes
4y
@Elizabeth Schartman If the criminal record says “claims unsubstantiated” it's little more than hearsay, and we cannot decline for that. Also it didn't even show up on a normal background check, because it wasn't a conviction. Sometimes tenants go bad. This is always a risk and it doesn’t mean your PM is to blame. Your PM did not cause this and none of this indicates they failed in their duty.
It's SO easy for people to sit around online, armchair quarter-backing and place blame after the fact. The bottom line is, the tenant caused a little damage as will happen sometimes. If you're new to rentals it's a bigger shock to you. But as @Bill B. pointed out, this is just part of the business sometimes. This is small potatoes.