Need legal advice: I bought a bank owned duplex with squatter

17 Replies

Hello,

I recently started to invest in real estate in Cleveland and would like to discuss the situation that I am in. I bought a duplex from a bank 2 months ago, the upstairs unit is occupied by someone who has been here for 10 years. This person stayed when the previous owner abandoned the property 3 years ago. Now I own the property and would like to evict this person who is not able to pay rent.

Do I need to hire an attorney in order to go through a formal eviction process or can I just ask this person to leave since she told me that she would not be able to pay?

Thank you in advance for your help,

Gautier

@Account Closed

Welcome to the site.

You can of course always ask her to leave. Will she? Maybe, most likely no. The only way you can get her out without her willingly leaving is a formal eviction.

It sounds as though you are pretty new to the industry and the process. I strongly encourage you to do the eviction with an attorney. This is not the part of your business that it makes sense to try and do it yourself.

@Account Closed

Yes, if the tenant won't voluntarily leave, you need to use the courts to handle the eviction. 

As for the eviction process. You can file it and handle it yourself in Cleveland, if the property is titled in your name (and not a corporate / LLC name). That said, unless you're very familiar with the process you'd be better served by hiring an attorney to take care of this for you.

I handle this sort of thing all the time. Feel free to contact me if you'd like my assistance.

@Account Closed  Do you live near the rental property or in Oakland?  You can always ask the tenant to leave.  Worst thing they can say is no.  If they say no then find an attorney who knows evictions processes and can represent you in court (incase you do not live near your property).  Evictions are very complicated where notices need to be served properly or you would have to start the whole process again.  Most likely once the attorney serves your tenant the eviction notice, they will be required to contest it, if they don't contest it (which seems like what might happen here) you would win the eviction and would have to do the sheriffs lockout.  If at any time you don't post the eviction letters, or deliver them correctly, or file things properly, you would have to start the process all over again.  As a first time, I would use an attorney, then learn the process in case you have to do it again (hopefully not).  Good luck.

There is also the option of offering cash for keys, would definitely be cheaper than an attorney and gives her a couple hundred bucks to help her move her and her things out. Just make sure you get it in writing so she doesn't just take the money and stay.

Reminds me of someone who is considering the purchase of an off-the-shelf, do-it-yourself brain surgery kit via a GoToMeeting video. Ouch!

If anesthesia is available, use it, but only after contacting the Cleveland Apartment Owners Association or area Bar Aaociation, and ask for name of attorneys and jaw firms specializing in U/D's (unlawful detainer or ejectment).

Life is too short to be messing with your own evictions, especially remotely.

I would first talk to the person and let them know that your goal is renting the place out.  They will either have to pay you rent to live there, or leave.  If they do not leave, then you will be forced to evict them, and with an eviction on their record, they will have a harder time finding a good place to live.  (The only people that will rent to them are those who don't mind people with evictions, and those are usually crappy landlords.) Right now she has 10-years in the same place.  Landlords generally love that.  

And if reasoning with the person doesn't work, then you'll go the eviction route.  Really, the time to have this conversation was the day you closed on the property, not 2 months later, but better to get it done now than wait any longer.

I'm in the same boat. We recently purchased a foreclosed duplex from the Master Commissioner and there are two tenants in there now. One tenant has said she is moving by the end of the month. We are glad for her to leave. Her apartment is in really sad shape and we would like to get in there and rehab it right away. She also has a pitbull and we need for her and her dog to leave. She did not pay rent to us for July but claimed to have paid the previous landlord. We don't believe her, but we will forego the income as long as she is out. 

The other side is a different story. This tenant has avoided making contact with us. I have posted information on her door and asked her to call. I have mailed her forms and information and no response.  My business partner was able to get her name and phone number from the previous owner and when he called her she said she didn't receive any of the information I had sent. She also claims to have made a rent payment in July, not true, and that we wants her security deposit back, which was not transferred to us. I am going to ask her to pay rent for August and if she doesn't pay I will post a 7 day notice to pay or vacate. If she doesn't pay, I will begin the eviction process which in Kentucky, in Franklin County, as of now, you do not need an attorney. If she pushes the security deposit issue then I will request she show me proof she made a rent payment in July, which she didn't, and then I will say she has already had a free month's rent on us that is equivalent to her security deposit. 

This is my plan so far. I hope it works. This is our first property purchased this way and I'm learning as I go.

I think it's unrealistic for someone that has been there for 10 years for you to say to just leave or give them a few hundred bucks and they will happily comply.

If you wanted it vacant you should have requested the bank deliver it that way before closing or do a DEEP discount to account for the trouble you will deal with.

A classic mistake I see is a bank will leave a tenant because they are being trouble and sell as-is. They will mark down maybe 10 to 15% for this inconvenience to the buyer. The price needs to go down to 45 to 50% to be worth it. You are going to have likely cash for keys money in the thousands, lost rent for months, and a unit lived in for 10 years that probably needs thousands to get into re-rentable condition, also attorneys fees. Get ready for over a 10k hit.

Hopefully you budgeted for this going in.

Why is a tenant going to move for a couple hundred bucks when the moving truck will cost more than that?? They still have to pay deposits with security and first and last months etc. and uproot themselves after 10 years of living there.

I hope it does turn out easy for you and you meet your goals. Just plan for the worst case scenario as well.

Originally posted by @James Bynum :

There is also the option of offering cash for keys, would definitely be cheaper than an attorney and gives her a couple hundred bucks to help her move her and her things out. Just make sure you get it in writing so she doesn't just take the money and stay.

 I think that's the best solution, this way everybody wins and they don't trash the place.

Originally posted by @Joel Owens :

I think it's unrealistic for someone that has been there for 10 years for you to say to just leave or give them a few hundred bucks and they will happily comply.

If you wanted it vacant you should have requested the bank deliver it that way before closing or do a DEEP discount to account for the trouble you will deal with.

A classic mistake I see is a bank will leave a tenant because they are being trouble and sell as-is. They will mark down maybe 10 to 15% for this inconvenience to the buyer. The price needs to go down to 45 to 50% to be worth it. You are going to have likely cash for keys money in the thousands, lost rent for months, and a unit lived in for 10 years that probably needs thousands to get into re-rentable condition, also attorneys fees. Get ready for over a 10k hit.

Hopefully you budgeted for this going in.

Why is a tenant going to move for a couple hundred bucks when the moving truck will cost more than that?? They still have to pay deposits with security and first and last months etc. and uproot themselves after 10 years of living there.

I hope it does turn out easy for you and you meet your goals. Just plan for the worst case scenario as well.

 Your right Joel, I mis-spoke, yes it will probably take about a grand for them to think maybe this is a better option than eviction, but depending on if it's a professional tenant or not, they would probably rather take the $500 than ended up being evicted with nothing, that's how I would word it to them.

Thank you for sharing these great perspectives. I told the tenant that I wanted to vacate the unit to which she responded that she had rights as a squatter and that she would go to court if necessary. Apparently the bank offered her $3K to vacate the unit in order to be able to sell the place for more money but she turned it down.

Next step for me is to evict her, could anyone refer me to an attorney in Cleveland?

Thank you again,

Gautier

Originally posted by @Frank R.:

@Account Closed

Speak to the occupant in person.  Build up some communication, keeping up a guard.  Offer them $1,000 cash to move out within 14 days.  Don't bluff.


Frank

 How about tomorrow .  Dont give 14 days-she will come up with a reason to get more.

im too late......oh well.   get an attorney................lol.