Buying a rental where the tenant has trashed the place

10 Replies

Hello BP community. I just wanted to get your opinion/ advise on my current situation. This week I  will be closing on my first investment property. Its a three unit in Sacramento. I will be living in the front unit and managing it myself. One of the unit came with a security deposit that will be transferred to me at escrow. The back unit does not have a security deposit. Just to paint a picture of that unit its needs a lot of cleaning and the dog smell is terrible. My question is can I charge the tenant and security deposit even if the unit is in such terrible condition or should I give him a 30 notice to clean and get rid of that odor before I do my walk through? And if he does not clean up, give him a 30 notice to vacate. The tenants has been there for nine years too. 

@Jorge Soto When it is your place, you can do whatever you want. If he just has a month to month rental agreement , you can give a 30 days notice for whatever reason you want. Hopefully when you ask them to clean up and get rid of odors, they will just do it.

You'll have to give notice to cure to get them to be sure they remedy the damage. If there's nothing in the lease about a security deposit then you're absorbing whatever repairs come your way unless you're a smooth talker, but the tenant won't be legally responsible. If the lease does stipulate that there's a security deposit and the tenant never paid then you can (and should) recoup that at closing.

If they're month-to-month and their lease doesn't have a security deposit then give them notice they'll have to sign a new lease contingent on a few things -- specifically them curing the issues you've noticed. That will give you an opportunity to get a standard lease in place along with a security deposit to cover any further potential dog damage, and you won't lose your tenant.

Yes, when you own the house you can do whatever you want. My thinking is I think you'll have to give a 60 day notice as he has lived there for so long. I am guessing you will not be able to get a deposit from him is he probably will not want to pay it.  So kick him out and find a new better tenant.

If you wanted to leave him you as the unit won't get much worse.  That would leave you time to save up some money to rehab the unit.  If you have the money now have him move, rehab and find a new tenant.

@Gordon Cuffe I am hoping to get the keys by Friday. They are on a month to month lease. I hope they clean the unit before I have they sign my lease.

@David Hutson Thanks for the advise. I really do not want to keep this tenant, because I feel that they will not pay the security deposit. Honest it looked like the landlord had this guy a lot of breaks. An I feel if I come in and be firm and lay the ground rules. He made leave on this own. I may keep him for a couple of months while I save some money to rehab the unit. 

@Peter MacKercher For whatever reason the owner did not collect a security deposit for this tenant. Good advice I will have to include that in my lease. I plan on using my own lease. 

I appreciate the advice.  

Jorge,

Ensure the lease you have matches theirs.  They may be on a month to month lease but you will need to give them 60 days notice to move as they have been there over a year.  That law changed a few years back and you may run into issues if they are aware of the laws regarding the amount of time you need to give them if you are ending their tenancy.

@David Hutson thanks for the advise. I will just keep them on a month to month. And yes the laws can cause issues if you don't know them. For that reason I printed the landlord and tenant laws for California and have started to review them.

I would tell him that he has to get a cleaning service in there.  He doesn't know how to clean so there is no point in asking him to do it.  

Give him the name of a cleaning service and the charge that cleaning service demands.   You want the floors cleanned  and the kitchen and the  bath and tub, toilet and sinks.    Tell him when that is done you will ask him to sign a lease with a deposit.  Otherwise you are asking him to move within 60 days 

+1 on the 60 day notice if you want him out; anytime the tenant has been in place over a year the law now requires a 60 notice.

The key here is what his lease says, (if he can find it), because that is what is going to give you guidance as to what you can do immediately.  

You're going to want to get him under your own lease ASAP, regardless of whether you want keep him there or not, (my guess is that you're going to want him out as soon as you can, old habits die hard). 

Him signing a new lease is going to be a negotiation, and the odds of him coming up with a security deposit are very slight, and it would be hard to keep anything out of the security deposit when it comes time for reconciliation; I have a feeling that move-in and annual inspection documentation is sparse as well; the place "has always had a dog smell", certainly from the time that you collected the security deposit.

Consider contacting Gary Link's office to take his "Landlord Class" which will give you access to his lease, (there is a cost for the class, not sure what it is anymore).  It's a good lease, but the best part is that a good eviction attorney, (Gary in this case), wrote it and knows how to use it to your advantage.

Most likely this guy will not pay a security deposit nor will he change how he lives (ie. clean up the place) for you. On Friday after you go to closing, you should next go to the property with your 60 day notice to vacate. 

Do not wait. 60 days is a long time. You can always change your mind if you for some reason decide to keep him. Also, within those 60 days, this guy should pay you rent. If not, you do whatever the first step of eviction is on the very day the rent is late.

Don't fall for empty promises. Be cordial, but firm.

@Stewart Guthrie Thank you for the advise. That is my first task when I get the keys is getting the tenants to sign my lease. A copy of the lease was handed to me during the closing process, but the owner had no inspection paper work. Also I just looked up Gary Links classes I will definitely be attending the next one. Thank you for that.

@Nicole W. You are right. I feel that the past landlord let him get away with a lot of things. Which is why the unit is a mess. I want to lay the ground rules and insure him that I am not the same way.