Investor · Delaware County, PA · Member since 2013 · 18 posts · 5 votes
Hi
I have a renter lined up for my first rental property. At the beginning of January during the screening process, we spoke with current landlord and he gave a very positive recommendation for this tenant - pays on time, very clean, kids are great - she's a good mom keeps them in line, sorry to see her go, etc.
This evening I get a call from current landlord that tenant has not paid January rent and that he's just posted a quit notice for the nonpayment. The other day he tried to call her to give her a chance to rectify before posting the quit notice, and she responded to him with a nasty voicemail (he played it for me) explaining that the house will be returned in perfect condition next week, to take her security deposit to cover January, and not to harass her any further. He didn't need to tell me this, but he feels betrayed after giving the positive recommendation.
We have not signed the lease yet, but she did give us first, last, and security deposit the other day - we were going to sign the lease that day but I had something come up and my wife didn't feel comfortable signing it without me there (both of our names are on the lease as landlords). I have started getting notices that she's setup water, electric bills to her name starting next week. We're supposed to meet tomorrow to fully sign the lease and hand over the keys.
It is the winter, if you pull the plug on her now, which you are entitled to do, then you will lose a months rent plus utilities plus your efforts of lining up another tenant.
She will certainly do this to you as well on the back end of her lease, you can pretty much count on that. You will lose the last months rent which you may or may not be able to get a small claims judgement against her for.
So it becomes a question of whether you want to take the 1 month rent hit now or later.
This is what I'd do (and have done in similar situations):
I'd take her now but only make the lease 6 months so that you can get it in-sync with the prime renting season going forward and get a better read on this tenant. Tell her that you want to get your lease in-sync with the summer rental season (that is your privilege) and you will renew it with her in late June for 8/1/14 - 7/31/15 assuming there are no problems (late payments, problems discovered in June walk thru, excessive drama etc).
I would also go back and take a hard look at the data that she provided on the application so that you have a better chance of finding her after she leaves in case you have to take her to small claims or housing court. Get good information on the Emergency Contacts (relatives especially). It is far easier to get this info now then after they have moved in.
This does a few things for you:
1) It lets the tenant know that you know how to run your business right from the beginning.
2) It gives you a 18 month tenant instead of a 12 month tenant as renewal will most likely happen unless she is terrible.
3) It gives you the information that you need upfront for when you have to chase her for the last months rent.
4) You get your rental unit in-sync with the prime rental season going forward.
I'd let it keep going personally, maybe consider talking to her about the issue. I don't believe going behind someone's back without giving them a chance to explain is a good way to go about things.
Tough decision bud. Trust your gut. If you feel comfortable she is a good tenant then do it, if you have a feeling a train wreck is coming then cancel and give her a full refund. it might not hurt to pay 50$ and call a local attorney to make sure this is ok. In my state it would be. A contract that requires an agreement of 1 year or more must be in writing to be enforceable. My criteria to lease includes they must have a positive feedback from their current or previous landlord, hers just went south. Just my thoughts, I have no idea of PA laws though.
When is she supposed to move in? February 1st? Is it that easy to find another tenant in your area this time of year?
Maybe this was just a one-off based on the landlord's prior comments. It would be nice if there was some way you could work something out with the previous landlord. He will definitely know where she lives if he finds he needs to charge her for something that the security deposit would have covered but he now needs for last month's rent. I wonder if he's going to go ahead and post the 3-day notice to pay or quit. Since you have first, last, and security deposit, and indication that she is clean, seems like you're in a pretty good position. I would explain to her during lease signing all your rules and make sure she understands and agrees to them - especially regarding the deposits.
I would not want a tenant who has literally just been evicted.
Or, is in the process of being evicted when moving to my place.
She'll end up stiffing you the last months' rent too and you'll have to do an eviction.
I certainly have no interest in a bratty infantile tenant who leaves another landlord a nasty voicemail becauase she's being evicted. LOL.
With that said, I'm not sure if you can get out of it-- I suggest asking your lawyer if you have a way out of this lease.
Also, I would not have accepted rent and deposit without a signed lease. Have you cashed those checks? If I was you, I would talk to your lawyer pointing out that you have no signed lease but you have the checks. Good luck.
It is the winter, if you pull the plug on her now, which you are entitled to do, then you will lose a months rent plus utilities plus your efforts of lining up another tenant.
She will certainly do this to you as well on the back end of her lease, you can pretty much count on that. You will lose the last months rent which you may or may not be able to get a small claims judgement against her for.
So it becomes a question of whether you want to take the 1 month rent hit now or later.
This is what I'd do (and have done in similar situations):
I'd take her now but only make the lease 6 months so that you can get it in-sync with the prime renting season going forward and get a better read on this tenant. Tell her that you want to get your lease in-sync with the summer rental season (that is your privilege) and you will renew it with her in late June for 8/1/14 - 7/31/15 assuming there are no problems (late payments, problems discovered in June walk thru, excessive drama etc).
I would also go back and take a hard look at the data that she provided on the application so that you have a better chance of finding her after she leaves in case you have to take her to small claims or housing court. Get good information on the Emergency Contacts (relatives especially). It is far easier to get this info now then after they have moved in.
This does a few things for you:
1) It lets the tenant know that you know how to run your business right from the beginning.
2) It gives you a 18 month tenant instead of a 12 month tenant as renewal will most likely happen unless she is terrible.
3) It gives you the information that you need upfront for when you have to chase her for the last months rent.
4) You get your rental unit in-sync with the prime rental season going forward.
Even though they are not supposed to, it is a frequent occurrence for tenants to apply the security deposit to the last month's rent. That is why I take 1 1/2 times the rent as a security deposit. That way I still have some money left over for repairs. She has already paid you the last month's rent, so that is not a problem.
I would take her. But, I like the suggestion above of doing a 6 month lease. This gives you time to see how she does and puts the end in the middle of summer.
Well, tenants do it because landlords let them do it.
If a tenant gives notice they are moving but fails to make the rent payment when due, a pay or quit notice should be posted as soon as allowed by law and the lease and eviction proceedings started. No exceptions.
What are you going to do if you accept the deposit as the last months rent and then there are damages exceeding what is left of the deposit?
Nope, train your tenants before they have a chance to train you and accept the fact you might have to retrain some who were not trained correctly by their previous landlord.
I'm not going to the time and expense of an eviction for someone that has already given their 30 day notice. Even if you do, they still haven't paid that last month, so what are you accomplishing?
I'm not going to the time and expense of an eviction for someone that has already given their 30 day notice. Even if you do, they still haven't paid that last month, so what are you accomplishing?
We've never once had it go to eviction. In every single case when a tenant has done this they have either paid when the pay or quit notice was posted or called asking if we were serious. When we assured them we were one moved immediately and the others paid the rent.
Why are you willing to be the source of funds for their move due to their lack of planning?
Also, in my opinion, a property manager not willing to protect the interests of the property owner is doing a disservice to both. That is not an attack and if you take it that way, I apologize in advance. But, it is my opinion based on 30+ yrs in this business.
I am not a source of funds, I do post 3 day notices, which usually get them to pay, and don't assume I don't protect my property owners.
Filing eviction papers costs hundreds of dollars and there is no point if they are moving anyway. My owners appreciate that I don't cost them more money.
I want to keep this thread friendly, so I'll leave it at that. Have a nice day.
I agree with Duncan, as I've had the same experience. A departing tenant insisted the lease allowed for the security deposit to be used as the last month's rent. When I read her the line item in the lease that specifically prohibited that, she said I was wrong. Once that Pay or Quit Notice was on her door, she moved out that week. And that week's non-paid rent was deducted from the deposit.
I am not a source of funds, I do post 3 day notices, which usually get them to pay, and don't assume I don't protect my property owners.
Filing eviction papers costs hundreds of dollars and there is no point if they are moving anyway. My owners appreciate that I don't cost them more money.
I want to keep this thread friendly, so I'll leave it at that. Have a nice day.
Just two friendly questions...
If you post the pay or quit notice, which usually gets them to pay...
Why is it a frequent occurrence for tenants to apply their deposit against the last month's rent?
In our State, the law is clear that Security Deposits can't be used for the last months rent but that doesn't stop tenants from trying. It is super easy to get a small claims judgement against tenants that do this; getting paid on that judgement is another matter.
Also in our State we can't start the formal notice process until the 11th and that must be done by a Marshall ($75 - $100) BUT when properties are held in LLC's, like ours are, then an Attorney must have the Marshall serve the notice (several hundred dollar$s) more. So getting the notice on the door might take until the 15th and cost us $300 - $500. It's not really worth the expense or effort for someone that is going at the end of the month BUT definitely worth it for someone that is 'staying and not paying'.
Did you consider confronting this applicant with your newly discovered information? Did you contact the landlord before this latest one to see if this happened more than once?
I agree with others that she will try the same with you - but you are already collecting last months rent upfront, so you won't have to dip into the security deposit to cover this sort of antic.
At this time of year I always try to keep the lease duration so that it ends between May and July if possible, since that is the time when more tenants are looking for a new place. Makes it easier to find the better tenants.
We have not signed the lease yet, but she did give us first, last, and security deposit the other day - we were going to sign the lease that day but I had something come up and my wife didn't feel comfortable signing it without me there (both of our names are on the lease as landlords). I have started getting notices that she's setup water, electric bills to her name starting next week. We're supposed to meet tomorrow to fully sign the lease and hand over the keys.
What would you do in this situation?
Steve
Reading between the lines here... It seems that you prepared a lease, the tenant reviewed and accepted (signed?) the lease, and gave you the necessary consideration to secure the lease. I think you are legally obligated to rent to this person even though you have not signed the lease.
Unless I had a waiting list i'd keep her. Of course I'd rather have a tenant that paid up till the day they moved out but it's pretty common for them to just say use the deposit as payment (what can you really do about it?). You've already got that covered so I'd take my chances.
I'm with you. If they have provided notice and it looks highly likely that they will leave by the end of the month, why burn the $ that you may never recoup? If more hostile, then I'd file. But I agree, she's gonna leave, she pulled the ole "take it out of my SD garbage." But it doesn't make sense to me so shed a few hundred dollars on a likely outcome that she leaves in a few days.
If they otherwise still qualify, at this time of the year, I would take them. Too often, people forget that for some people, there's a reason they're tenants. There's a decent chance you could be in this position at the end of the lease term, but absent a great candidate to take her place, I would proceed with the applicant. I'd weigh the costs of a vacant unit - holding costs, lost rent, etc for 2 months, plus your time to market and sceen and see if it's a better deal to move forward or not. I wonder if you're agreement is binding in any way, being that you've taken all of the monies up front and would've had the lease signed if not for your own situation.
While not thrilled about the situation, I would go with it.
Sounds like she is tapped out after paying first, last, and security deposit. That is a lot of money for most people, especially a single mom. Then you have to figure moving costs, maybe utility deposits too? What are you charging for rent? Well, that cost X3 + extras = $$$$
Sounds like some landlords here get much better results from a pay or quit notice than I do. It is a bit of leverage, but the tenants have a lot of power once they move in. We can post, file, and be firm, but none of it gets them moved out or the rent paid quickly if they aren't concerned about protecting their credit or rental history.
We have had a few cases where we moved ahead with moving in tenants that had bad prior landlord references. The current landlord doesn't have the incentive to tell the truth and doesn't know how the move out process will be, so we give it less credence than prior landlords. We always let the tenant know at signing that a prior landlord is giving poor references, though, and if they behave in a way to get a poor one from us as well, their future housing options will be limited.
Tenants will say and agree to anything to get moved in then will disregard all the previous agreements and discussions at move out. We've had some great move outs, but many are degrees of bad and really bad. Kudos to the landlord for bothering to re-contact you so you have the opportunity to monitor more closely or bail.
Sounds like she has some attitude. What's up with that? Speaks to her lack of integrity that she stopped paying rent that she was obligated to pay. Not good. She might pays your bills for now and it's good you got your last month rent ahead of time, but she may give you some grief. Be prepared. Would be good to know her side of the story, would give you some insight about her mentality.
I once rented to a person who seemed great, until two days before move-in when some red flags popped up. My intuition told me to stop the deal, but I felt I was too far into it to back out, as I had offered to rent and he was already packed for the move. I hadn't taken rent or signed a contract at that point, only a holding deposit. I went forward with it and that tenancy lasted only four months, he didn't pay last month rent and didn't pay any of his utility bills. He got cocky, uncooperative and disrespectful at the end. We lost a bundle and were faced with another vacancy to fill. But you never know, hard call.
Tenants will say and agree to anything to get moved in then will disregard all the previous agreements and discussions at move out.
Absolutely right Michele!
A tenant that has nothing to lose doesn't care what you lose.
I've had good luck with current landlords, as they usually know the tenant is planning to move, so they don't hold back. We've shared war stories, and I've had landlords offer to sell me their properties. If they don't have a story, they're probably not the real landlord.
It's when I can't reach any current or prior landlords, or when the person the tenant claims is the landlord doesn't appear on the property tax records that I know there's a real problem.
Well... the decision ends up getting made for me - by the tenant.
First, a few people asked whether I had a previous landlord reference. She put on her application that she owned before renting - and has been renting due to a divorce about a year ago. This all checked out with info on the app and public court records. So I didn't have one.
Back to the story - along the lines of what @Steve Babiak suggested, I politely confronted her with the information, and allowed her to explain. She tells me that when she told him she was not renewing the lease, she wanted to know how quickly she could get her deposit back after moving out (@Justin. - I get your point that it's a lot of money to come up with). Apparently, landlord told her that he doesn't have deposit and wanted to know if she would be ok just applying it to rent - and they had a verbal agreement to proceed this way. The tone of her voicemail was due to being surprised and upset that she was going to get the notice to pay or quit when they had an agreement. She then goes on to tell me -since he has no problem defaming her character - that he has a substance abuse problem and has a tendency to forget conversations. Not mentioned in first post, but getting the scoop on tenant came over the course of multiple interactions - that were strangely repetitive and rambling at times... and he has since called back and left messages wanting to talk about it some more - that the rent was often late over the last year- why the glowing rec then??
So they've each made their case and it's now the classic "he said, she said". Since I have met tenant on multiple occasions and given that I have her 2 months rent + SD money, and the current landlord integrity is somewhat in question as well I'm inclined to proceed with the lease.
However, I wasn't ready to make up my mind on the spot - I told her that I wanted to think it over (meaning: wait for some of your great responses on BP) and I'd get back to her the next day with my decision. She seems ok with this and we hang up.
Less than 15 minutes later she calls me back - ironically interrupting a sentence speaking with my wife saying that I think we should give her the benefit of the doubt and keep her. Now she launches into a rambling tirade (same tone as that nasty voicemail landlord played me) and says that this whole situation has left a bad taste in her mouth and that my lack of professionalism (?) has made her not want to rent my place anymore (!). Totally didn't see this coming - I guess she expected me to make a snap judgement (btw - this was at 11:45pm)...
She wants to know if I'll return her money - I have a hold deposit agreement that says if she wants out that the one month hold deposit she paid is non-refundable. Seeing the pending potential nightmare tenant situation looming, I decide to cut my losses and let her off the hook.
I go to the bank, get a cashier's check for the full amount, make her sign an agreement noting that it is she who wishes to no longer rent the property, and I'm now looking for a new tenant.
Sorry for the long post, but you all were so helpful I felt the full explanation, and any post-mortem analyses from the great folks here, might be helpful to others who may stumble across this in the future.
PS I already have several other interested parties and one showing today - actually decided to increase rent by $50 since I had so much interest previously and the repairs have turned out nicer than expected and it's not the holidays anymore - I'm feeling ok that I made the right call.
However, I wasn't ready to make up my mind on the spot - I told her that I wanted to think it over (meaning: wait for some of your great responses on BP) and I'd get back to her the next day with my decision. She seems ok with this and we hang up.
Less than 15 minutes later she calls me back - ironically interrupting a sentence speaking with my wife saying that I think we should give her the benefit of the doubt and keep her. Now she launches into a rambling tirade (same tone as that nasty voicemail landlord played me) and says that this whole situation has left a bad taste in her mouth and that my lack of professionalism (?) has made her not want to rent my place anymore (!). Totally didn't see this coming - I guess she expected me to make a snap judgement (btw - this was at 11:45pm)...
I was with you up until the bolded part and can somewhat understand where she's coming from. When she gave you the first last and security deposit and signed the hold deposit I'm sure she was under the impression that you had already made the decision to let her rent the place. If someone was holding 3 months worth of my rent then came back and told me "they need to think it over" after I was under the impression that they had already made a decision I'd probably be skeptical too.
It probably would have just been best if you hadn't told her you were "thinking it over".
