Help! My lawyer says I can't evict them ! A true nightmare !

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Help! My lawyer says I can't evict them ! A true nightmare !

Ewan Tong
Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes

Let me take a deep breath before telling my story...

I bought a bank-owned two-family on auction for 460K, 100K-120K below the market price. Before the auction, I knew the property was occupied but I didn't know the identities of the occupants. My original plan was to talk to the occupants after the closing, asking them either to sign a Tenant At Will lease or leave the property.

The next day after closing, I went to talk to the occupants, but they refused to talk to me but referred me to their lawyer. Here is what their lawyer told me:

Then, I talked to my closing lawyer, who immediately investigated into this issue. Here is what my lawyer told me:

I was shocked when I realized that I was in such a predicament. While I feel sorry to hear the crazy story, I feel sorry for my investment too. But I do have the following questions:

  1. What if the couple intend to stay there for ever? I will be definitely willing to let the old couple stay for free for a few months before they eventually find a senior home that suits their needs. I try not to be cynical, but to my knowledge, there are at least three generations of their family members living in the two units. I suspect how motivated they are in "looking for a senior home." The two-family has 2 living rooms, 6 bedroom, and 2 bedrooms in total. I suspect how "actively" the children could be looking to place the old couple in senior home when the entire family could live there for free. What if they maliciously take advantage of me and stay for ever?
  2. Are we landlord-tenant relationship? Will I be held liable for landlord obligations? We have no lease, no rent payment. In this particular case, are the old couple and I in a landlord-tenant relationship? Will I be held liable for landlord obligations, such as repair, safety, heating and etc. 
  3. Should I buy homeowner insurance for this property? If the old couple fall due to uneven floor and sue me for negligence, would my homeowner insurance pay for that?
  4. What should I do next? What is the best course of action you would recommend in this particular situation?

Thank you so much for reading my case and any feedback is greatly appreciated!

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
10y

I always recommend against buying an occupied property unless you communicate with the Tenants first AND they have a written agreement prior to closing the sale. That simple step would have saved you a lot of heartache.

You may also have grounds for a lawsuit against the listing agent. Why? Because they should have known the situation with the current occupants and they are required to disclose that by law. If what you say here is true, they violated their legal responsibility and their code of ethics. As a fellow REALTOR, I would file a complaint against them in a heart beat.

My recommendation is for you to contact an attorney that specializes in evictions and start that process. Their situation is sad (if it is true) but it is their fault, not yours. They've had plenty of time to arrange a new living situation but refuse, so giving them more time won't fix anything.

For those reading this: do you research before buying!!!

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    10y

    Start the process for eviction/whatever it's called for holdover owners.

    4Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    10y

    Honestly, it's surprising how often lawyers are wrong.  I had a conversation with one today who knew less than I did on a disability issue.

    I agree to start eviction proceedings.  Go to court ignoring what any attorney has said to you.  In other words, when the judge asks why you're evicting, say that they haven't paid rent.  Let them explain why they shouldn't have to pay rent to the judge.

    Then, just do what the judge says.

    You shouldn't need a lawyer to do this.  Most evictions are done in small claims court-type situations.

    Here's info on evictions in Mass:  http://www.mass.gov/courts/selfhelp/housing/evicti...

    4Reply
  • Ewan Tong
    OP
    Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes
    10y

    Thank you so much Wayne and Sue! I now feel a greater peace of mind.

    The thing is that, I do feel sympathetic toward this handicapped, senior couple. And I would like to give them 100 days to look for a senior home. If they can't find a senior home by then, I would say they have no excuse. 

    But my next question is, do I have any other risks besides the loss of 100 days' rent in this decision? Any feedback is greatly appreciated. Thank you.

    0Reply
  • Carolina E.
    Investor · NW Indiana · Member since 2012 · 833 posts · 197 votes
    10y

    I understand you feel for the senior couple, but I would be scared to let them stay too long being that they have family in there. I just feel the longer that stay the more damage they can do.

    1Reply
  • Wes Brand
    Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
    10y

    You need to talk to another lawyer in your area. One specialized in evictions and landlord tenant law.

    Honestly. You're playing with fire if you listen to people on the internet about this. I don't say that to knock anyone, but if you want to do anything other than get them out of the property that's now yours you need to make sure all of your i's are dotted and t's are crossed. 

    5Reply
  • Ewan Tong
    OP
    Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes
    10y
    Originally posted by @Carolina E.:

    I understand you feel for the senior couple, but I would be scared to let them stay too long being that they have family in there. I just feel the longer that stay the more damage they can do.

     I agree. I might also expose me to some unnecessary liabilities as well. Thank you, Carolina.

    0Reply
  • Kevin Manz
    HVAC Tech · Fort Wayne, IN · Member since 2015 · 423 posts · 223 votes
    10y

    Sorry for your situation. I don't know anything on the legal aspects of this situation, but if you plan to give them 100 days free rent ,I would first let them know you are willing to work with them only if they communicate with you, and w out they're lawyer involved. 

    This could be a long drawn out process. My advice would be to start the eviction process immediately. Remember always keep your emotions out of your business decisions. Hope you the best. 

    2Reply
  • Ewan Tong
    OP
    Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes
    10y
    Originally posted by @Wes Brand:

    You need to talk to another lawyer in your area. One specialized in evictions and landlord tenant law.

    Honestly. You're playing with fire if you listen to people on the internet about this. I don't say that to knock anyone, but if you want to do anything other than get them out of the property that's now yours you need to make sure all of your i's are dotted and t's are crossed. 

     Thank you, Wes. I am sure I will eventually seek legal service. I thought engaging in a discussion of this particular case would also be a learning process for everyone.

    2Reply
  • Ewan Tong
    OP
    Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes
    10y
    Originally posted by @Kevin Manz:

    Sorry for your situation. I don't know anything on the legal aspects of this situation, but if you plan to give them 100 days free rent ,I would first let them know you are willing to work with them only if they communicate with you, and w out they're lawyer involved. 

    This could be a long drawn out process. My advice would be to start the eviction process immediately. Remember always keep your emotions out of your business decisions. Hope you the best. 

     Thank you, Kevin. "Keep emotions out of business decisions" is a very to-the-point advice. 

    1Reply
  • Fred Weinkauff
    Investor · Troy, NY · Member since 2015 · 97 posts · 43 votes
    10y

    You should get insurance right away, its yours you own it. if it burns to the ground your out of luck. Find another attorney that can help you get them out. They have lived there for almost 50 years, you still need to go in front of a judge and let him make the decision. And they are your tenants. Get a GOOD attorney.

    2Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    10y

    I always recommend against buying an occupied property unless you communicate with the Tenants first AND they have a written agreement prior to closing the sale. That simple step would have saved you a lot of heartache.

    You may also have grounds for a lawsuit against the listing agent. Why? Because they should have known the situation with the current occupants and they are required to disclose that by law. If what you say here is true, they violated their legal responsibility and their code of ethics. As a fellow REALTOR, I would file a complaint against them in a heart beat.

    My recommendation is for you to contact an attorney that specializes in evictions and start that process. Their situation is sad (if it is true) but it is their fault, not yours. They've had plenty of time to arrange a new living situation but refuse, so giving them more time won't fix anything.

    For those reading this: do you research before buying!!!

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    8Reply
  • James DeRoest
    Investor · Century, FL · Member since 2015 · 950 posts · 603 votes
    10y

    Really not sure I'd bother waiting 100 days since they've had something like 6 years to sort themselves out. 

    The other issue that you've mentioned is that there are other people living there, so surely they can start paying some rent? I think that needs to be brought up along the way.

    But I would get a second opinion from another lawyer, is a judge really going to let someone sit in a property indefinitely?

    3Reply
  • Brandon Battle
    Real Estate Agent · Buena Park, CA · Member since 2016 · 743 posts · 424 votes
    10y
    Buy them off and get rid of them now.The thousands you will waste on legal fees you can give to them now and get them into a affordable hotel until they find a new place to live.Their problems are their own,don't make them yours.Wish them good luck and pay for a rental van to move out their stuff asap.
    2Reply
  • Ewan Tong
    OP
    Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes
    10y

    Thank you, Fred, Nathan, James and Brandon! I think I will try to offer them some money for keys. If they refuse to accept, I will use this amount of money to hire an eviction lawyer.

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    10y

    Meet with them and inform what their monthly rent will be and instruct them to pay. Make sure it is full market rent. If they do not pat proceed with the eviction. If you do not want them as tenants just start the eviction.

    People that get taken advantage of by others are not entitled to special treatment for their stupidity. Their situation is unfortunate but it is not your problem or concern.

    2Reply
  • Randy E.
    Rental Property Investor · Durham, NC · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    @Ewan Tong, are you serious about 100 days?  You have a half-million-dollar investment in that building.  Go see a different lawyer tomorrow and have him/her initiate eviction proceedings as soon as possible.  They have had six years to sort this out and haven't done so as yet.  And don't blindly accept their version of the past to be 100% accurate/true.  Maybe they initiated a second mortgage to draw money out because they mismanaged their money and they simply couldn't keep up with the payments.  After all, an extended family living for free in a large house sort of indicates they might have financial woes.

    Congratulations on the equity you inherited with this deal, but don't allow conjecture to ruin this for you.  Take the necessary steps and let real life be a teaching experience for you.  As long as you don't need immediate cash flow to remain solvent, this situation could be very beneficial to your growth as a RE Investor.  Contact a lawyer today.

    Good luck!

    5Reply
  • Ewan Tong
    OP
    Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes
    10y

    Thank you, Greg and Randy. :)

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    10y

    Their situation is unfortunate, but you are not responsible. I have trouble believing a judge would force you to let them live there rent free forever. The judge may grant an extended time before they need to leave, but how can he legally mandate you to allow someone to live rent free. Your closing lawyer is an idiot for giving you that advice. They already went to court and lost the home, so the court doesn't recognize them as the rightful owners. I agree with @Thomas S. suggestion of notifying them of rent due. Establish fair market rent value using comparable properties and document it thoroughly. Send a letter certified mail notifying them of rent rate and method for paying rent. Once the rent date comes and passes without them paying, start the standard process for eviction. It will go to court and most likely the judge will have compassion and give them some extra time to leave. Do not wait 100 days or you will set a precedence that you are accepting them rent-free. The advantage of documenting the rent they owe is that even if they stay in the property for 3 months, you can sue them for rent owed. They seem to have enough money to pay a lawyer to go after the bank, but yet are unwilling to pay you. It is horrible what happened to them, but it is also horrible what they are doing to you. Their mentality is, we got screwed so now we will screw you. Stop feeling sorry for them or it will make this worse on you.

    I would file a complaint against the listing agent with the realtor association. He knew about it and covered it up, which is unethical.

    Please find a competent lawyer. I am not a lawyer and what I gave is not legal advice. It is just what I would do in a similar situation.

    7Reply
  • Scott W.
    Real Estate Investor · chicago, IL · Member since 2012 · 1k+ posts · 231 votes
    10y

    I've heard of people in worse situations be thrown out of their house during the housing downturn.  it's very sad but they can't live there forever rent free.

    if they were a victim of fraud, they need to deal with that person who committed it - not you.

    and I'm sure they haven't paid their mortgage for like forever so it's not like they got totally screwed.

    contact several other real estate attorneys and have them take it to court.

    I bet you will win.

    0Reply
  • Scott W.
    Real Estate Investor · chicago, IL · Member since 2012 · 1k+ posts · 231 votes
    10y

    he bought the property at auction - no real estate agent was involved in this transaction.

    plus, even if he did - most are sold as is.

    0Reply
  • Ewan Tong
    OP
    Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes
    10y

    Just to clarify something, Joe. Their lawyer is representing them for free (law clinic). You are right, Scott, there was no agents involved because I bought this property on auction (sold AS IS).

    0Reply
  • Nicole A.Pro Member
    Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
    10y

    I think you should get a second opinion from another attorney. An attorney who right off the bat won't even try because they *assume* what a judge will say is not an attorney you want because clearly they won't fight for you. I believe you should start the eviction process and at least try that route. 

    In the meantime, you should write up a lease and offer this couple to sign that lease....I would do just month-to-month....and make the rent a little below market, something very fair. This way, you get some income, they get a roof over their head until they move. They might reject the lease offer, but it helps you. Making this offer I would imagine only help you in court because you're trying to solve the situation. 

    It's terrible they were apparently scammed, but you shouldn't have to pay for their mistake either.

    3Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    10y

    You've received some really good advice here. Your lawyer is an idiot. A judge may be sympathetic and give them a little time to get it together, especially in your state, but if they had any legal rights to the property the lawsuit against the bank would still be ongoing. No one gets to stay somewhere for free because *they* say they were victims of mortgage fraud; the case was tried, and concluded, and they lost. 

    Really, this is a learning opportunity. I don't buy anything with existing tenants for reasons just like this, but if you are going to, you need to have copies of the legal agreements with the tenants before you close, all legal funds held in care of the tenants (i.e. deposits) added to your funds disbursed or placed into escrow with a disinterested third party, with language stipulating access, affidavits of no outstanding mechanic's liens, etc. 

    I would start the eviction process immediately. You can always halt the process if you work something out. Massachusetts is a tougher state than most, so you really need to get the ball rolling. 

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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    10y
    Originally posted by @Ewan Tong:

    Just to clarify something, Joe. Their lawyer is representing them for free (law clinic). You are right, Scott, there was no agents involved because I bought this property on auction (sold AS IS).

    Ok sorry I missed the part about the auction. I would be even less concerned now that you say it is a free lawyer. Free lawyer services help many people and they are overworked. They are just trying to scare you, but with the limited time they are going to put into this, you have nothing to worry about. Take them to court and they will lose. Please keep us updated. This is an interesting situation. 

    1Reply
  • Ewan Tong
    OP
    Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes
    10y

    @Joe, sure, I will keep you updated. Thanks to everyone!

    0Reply
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