@ Everyone
Wow, this thread has really taken off while I've been dealing with this - thanks for the laughs, they're definitely needed!
So here's what went down....
After reading all the posts yesterday, I was swaying back and forth between "laying down the law" and letting it slide. On the one hand, almost certainly tenant C & D had been breaking the lease by smoking pot. Did it make me mad that they were lying to me? Sure, but there are worse things, and otherwise they were excellent tenants. The problem with letting it slide was that
1) What they were doing was illegal
2) I knew about it
3) Tenant A & B knew about it, and tenant B (and her mom) was afraid of the friends C & D were bringing over, insisting I do something about it
So, I chose an approach that I thought would appease both sides. Yesterday I spoke to tenant C and D individually. Tenant C has been the instigator in all of this, so I spoke to her first. I told her that I heard she was still doing marijuana and other illegal drugs in the house, and that as a result I wouldn't be renewing her lease at the end of October. I said I felt bad since she was otherwise a great tenant, but that the atmosphere at the house along with the illegal activity would create an environment that we didn't want for entire year. Since it's hard to find housing in November, I offered her a grace period from yesterday through the end of Sept. to find other housing. If she can find housing in that time, then she can get out of her contract early and I will refund her deposit. She handled the news well, just saying "yeah, it sucks, but yeah, I know that marijuana is illegal....". I told her that while I don't really care what she does, she definitely can't be doing illegal things on our property, and that I would hate to have the cops be called on her.
Then I spoke to tenant D, telling why her friend, tenant C was on the way out, and giving tenant D the same early out option for her contract. She said that she'd look around a little, but that she's really busy and actually really likes it at our house, so there's a good chance she'll stay (her contract runs all the way through next August). She also said that she and tenant C "aren't on the same page when it comes to that stuff", which I took for her essentially saying that she's just caught in the middle with this whole marijuana situation. So honestly, at this point I hope she stays...
And that was that. I thought I had navigated the mess well, and that all was well. I had spoken to the two troubled tenants, and had something good to report to tenant B (the one who reported the whole marijuana situation).....
I told tenant B what I did, and then a little later I got a call from her mom, saying that "my daughter needs to get out of there", and that "she can't even bring herself to go back there, she's too scared of retaliation". Needless to say, I was baffled. While tenant C & D might have been breaking the lease, in no way, shape or form did I think of them as "dangerous". So here I was, having gone WAY out of my way to help tenant B, and this was the thanks I got. I think she thought I was going to straight out evict tenant C & D, which I might've, except after considering my options, it seemed like an overly pricey, lengthy, and risky move that could end up taking a month anyways.
So after trying to reason with the mom, I realized that she wasn't going to budge. And I realized that there's no way I wanted a complainer like tenant B in my house either (she'd shown her true colors). I told her that her daughter could leave, but she'd have to sell the contract. To which she said that she'd talked to her lawyer, and that I was potentially liable since I had heard of the possibility of marijuana a month ago, but didn't mention that to her and her daughter (tenant B) when they were looking at the house. Which also blows my mind! I had already talked to tenant C about marijuana a month before, and she had admitted to nothing. Am I supposed to tell every potential tenant that "hey, just want to let you know someone might be smoking marijuana here, but it's a great place". Really?!?!?! So bogus. But then the mom offered to let me keep the first month's rent if I let her daughter out of her contract and selling duties, which I accepted. Good riddance!
Wow, so many lessons learned....I'm sort of embarrassed to post all of this, since all of you that said to not get involved are probably saying "I told you so...". But hey, this is my first property, and it can only get better. Right? Haha, looking back at it now, I think the best thing to do would have been to tell tenant D (the complainer) that I sympathized with her (but couldn't do anything since we didn't have any hard evidence), and that if she noticed any illegal activity happening, to call the cops.
Oh well...guess it's time to start looking for better tenants....
Thanks again everyone for your thoughtful and helpful comments.