Real Estate Investor · Denver, CO · Member since 2013 · 60 posts · 9 votes
Hi all,
We just bought a property in Denver, Colorado to fix and flip that has a tenant in place. She has been living there for about 9 years and has said that she had a verbal agreement with one of the past owners (2 sales ago) to buy the house on a lease option. I personally believe that she is making this up. We plan on flipping the house and have offered to let her stay for 2 months to find a new place, move, etc, except every time we try to get her to sign a lease for that period she says she needs her lawyers to review it first and it ends up being one excuse after another. Today I told her to sign the lease or I would start the eviction process. There is currently no lease in place. She threatened to file a lis pendens. I don't think she has much basis for a lawsuit but I'm concerned that if she actually did this it could prevent us from selling after the flip is complete.
My question is...can she just cloud title with a baseless lawsuit/lis pendens? Is there anything I can do to prevent this or otherwise address it? Any other insight is greatly appreciated as well.
Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
11y
as a landlord I am very jaded! In this case I would be done with it! I would have a lawyer send a letter saying this is her x notice! She's out! I would say we will go against her to the fullest extent for eviction and legal bills! It's suprising once your stern, professional and don't give an inch thing go better.
Unfortunatly I find being nice bites me on the tush in busienss s
Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
11y
as a landlord I am very jaded! In this case I would be done with it! I would have a lawyer send a letter saying this is her x notice! She's out! I would say we will go against her to the fullest extent for eviction and legal bills! It's suprising once your stern, professional and don't give an inch thing go better.
Unfortunatly I find being nice bites me on the tush in busienss s
Johnson City, TN · Member since 2014 · 140 posts · 133 votes
11y
Jake, I would also speak to your lawyer about it if you have one and I would also begin the eviction process! I agree with mrs. Colegrove it's unfortunate in this business sometimes that being rhe nice guy and trying to help tenants usually blows up in your face typically with some kind of draw down for the investor.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
11y
Any verbal agreement between her and some previous owner is between them. If she does try to make some claim, your title insurance should help sort it out.
Get in touch with these guys:
https://www.thslawfirm.com/
They can help you with the process. I believe that you will have to give 30 days notice the lease is being terminated, if you don't have a lease in place. But those guys will advise you.
We have a lawyer working on it. Looking like it will be dismissed as a spurious suit and lis pendens will be removed. Also, working through the eviction process. I'll update this post with developments.
Investor · Leominster, MA · Member since 2011 · 1k+ posts · 589 votes
11y
Don't be afraid of your deadbeat tenant. She may have gone online and read about some legal terms and she has some great ideas of taking you to court but in reality you are (hopefully) following the letter of the law and it will come out in court. Don't let her threaten you. Deal with her like any other eviction @Jake Silcott. It is what it is...
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
11y
@Jake Silcott I'm sure your attorney is all over this but Co law allows for as little as 10 days notice to terminate a month to month agreement. THS does a great job and I know they have you covered.
The tenant ended up filing a claim and suit against the the first owner whom she was renting from for years, the 2nd owner, and my company. She also filed and recorded a lis pendens. The good news is that she does not have any basis whatsoever for the claim. There is no agreement for purchase or lease option in existence. Through a very good lawyer we have started the eviction process and filed counterclaims for legal fees and back rent as well as a cross claim demanding the previous owner defend our interest since we were issued a general warranty deed. The title co might jump in at this point. We've also asked the court to dismiss us from the suit and remove the lis pendens under the grounds of it being a spurious suit. Our attorney is confident that as soon as we get the tenant in front of a judge we will be removed from the suit, the lis pendens will be removed, and the tenant will be ordered to vacate. The whole situation me has been difficult as I've never dealt with this kind of thing before, but I've learned a lot and it surprisingly isnt costing as much as I feared. In the end we will still make great money on the project. Thanks for everyone's insight! Much appreciated.
"The Statute of Frauds dictates that a contract for the transfer of an interest in real estate must be in writing and must be signed by the party against whom the contract is being enforced. Otherwise, the contract is unenforceable."
Real Estate Investor · Denver, CO · Member since 2013 · 60 posts · 9 votes
11y
Will do @Bill S. In hind sight we probably should have met with the tenant and "interviewed" her before we purchased. However, now that I know how to deal with this type of thing I don't know if I would have passed on the property. It's delaying the project and costing us a couple thousand bucks in attorney's fees and extra holding costs, but we still stand to make around $100k on it. Its all just a cost of business. I'll update the thread as things happen.
Registered Nurse (ICU) · San Jose, CA · Member since 2014 · 496 posts · 332 votes
11y
Next time ask for the property to be vacant before close. I got screwed in a similar situation. Tennent stopped paying the day I took possession. I played nice at first and like mentioned earlier it didn't work. Even after an official eviction warning and letter the tenant still did not pay. Then when the court date came around she acted all surprised and was still expecting to be able to live there and just make a payment plan. Court gave her 10 days to vacate and she was gone. Surprisingly she left it in great condition. People are crazy!
Herndon, VA · Member since 2014 · 1k+ posts · 324 votes
11y
Originally posted by @Account Closed:
Next time ask for the property to be vacant before close. I got screwed in a similar situation. Tennent stopped paying the day I took possession. I played nice at first and like mentioned earlier it didn't work. Even after an official eviction warning and letter the tenant still did not pay. Then when the court date came around she acted all surprised and was still expecting to be able to live there and just make a payment plan. Court gave her 10 days to vacate and she was gone. Surprisingly she left it in great condition. People are crazy!
A loss of stability can do funny things to people. She probably was a long-term tenant who liked her living situation. As soon as the property was sold, she knew that situation was over. I can see why she would be less motivated to pay rent, although taking it to the extreme that she did is pretty crazy. Since she left it in good condition, I think it was more anger over her situation rather than directed at you specifically.
Real Estate Investor · Denver, CO · Member since 2013 · 60 posts · 9 votes
11y
So we had our hearing before a judge yesterday and this morning and I'm very happy to report we won on everything! We've been granted possession. Tenant has 2 business days to vacate. The sheriff has already been contacted and is ready to remove her after the 2 business days expire, if needed. The lis pendens was declared spurious and invalid and has been removed. We were awarded legal fees for the lis pendens portion of the case. We will be discussing the possibility of suing for damages and loss of rent with our attorney next week. The question there is, if we were awarded a judgement would she have the means to pay it. My guess is, probably not. I'll keep this thread posted with updates and developments.
We've contacted our architect and contractor who will get to work next week, which I'm really excited about.
Lesson learned! In the future we will be sure that the tenants are gone before we close. The whole experience was a bit stressful but, call me crazy, it was a great learning experience and at times actually very interesting to see how everything worked inside the courtroom. I will say that having a really good lawyer made the whole experience a lot easier than it may have been otherwise.
Thanks to everyone who shared encouragement, insight, and advice.