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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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    10y

    The reality is there are pro-landlord states and pro-tenant states.

    I have seen judges give down rulings and interpretations that flew in the face of case law with what seemed to be the appropriate action to take.

    The eviction attorneys local to the county where the property is will usually have the best insight. Some areas have multiple judges handling eviction courts and others just have one. The eviction attorney generally has an idea of how certain judges operate and view things. The thing about when it goes to court is you just never know what is going to happen.

    If you want to save time you might want to offer cash for keys but EVERYONE has to be out and all items removed to get the money with proper disclosures signed relinquishing any rights to the property. You then change all of the locks around the property as you do not know who has keys to what.

    This is going to cost money and time no matter what approach you take. If the people do not have money saved up to move elsewhere then simply telling them to move won't do anything.

    No legal advice given.     

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

    In my state of Wyoming, auctioneers ways sell "as is, where is." However, I have never seen an occupied home sold and the auctioneers ALWAYS provide an open house for interested parties to tour the home. How else will you get a decent price on an 8o-year-old house without a basic walk through? Who pays $460k on a house not knowing if n it is gutted, flooded, or destroyed by termites.

    Caveat emptor: buyer beware.

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  • Michael Leung
    Investor · Tucson, AZ · Member since 2015 · 54 posts · 27 votes
    10y

    In Arizona...Trustee auctions there is never a open house and almost half are occupied.

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  • Paul Gupta
    Investor · Fremont, CA · Member since 2015 · 19 posts · 3 votes
    10y

    I had this happen few years back, bought at courthouse steps, owner occupant said it was an unfair foreclosure and its in dispute.  We filed eviction and it was an open and shut case.  Follow the law and be careful of any statements you may make out of sympathy, since they might be used against you.  The owner occupant is very bitter at having lost their home.  You are a rational investor who just wants to make a profit and move on.  Emotional stakes are quite different between the two parties, so be sensitive in your communication.  

    Cash for keys: personally never worked for me.  Our $500 or $1000 offer pales if they think a $200k house is at stake.

    About 100 days: evictions take pretty long, they will be able to comfortably plan their move before the sheriff comes for the lock out.

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  • Crystal H.
    Flipper/Rehabber · IA · Member since 2015 · 157 posts · 35 votes
    10y

    I have purchased many properties at the county auction, you buy at your own risk. I have purchased properties with occupants and without. I made mistakes, let people live there for a month until they found a place. Never did that again especially when they started packing up the ceiling fans, light fixtures and even light bulbs. I always talked to people and they agreed to leave, only once did I have to evict someone through the court, and once they saw that we actually filed the paper work they left on their own before it was even finished. I agree with a lot of the other members. You have talked to them, they will not agree to leave so file the eviction. You are assuming these people were defrauded, no judgment has been made on that issue and that is not your issue. Get the insurance and find a lawyer that will work for you. Good luck and I'm interested to hear the outcome and how long this process takes. These unique situations are the most interesting sometimes and we can all learn from them. Don't be discouraged.

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  • Stuart Macheske
    Detroit, MI · Member since 2015 · 28 posts · 7 votes
    10y

    Definitely start the process ASAP, if they have no paperwork stating legal interest in the property; they are a squatters with no legal rights to occupy the premises. The judge will legally have to side with you regardless of what claims they make. The judge may give them some time after the judgement before you can execute the writ to evict. If you give them the 100 days w/o the court action, on day 101 you will still have non-paying occupants 99.9%. All from personal experience, we do a lot of bulk purchases in MI, non-paying occupants is something we have worked down to a science and are able to convert 70% to paying tenants.

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

    I talked to perhaps the best landlord lawyer in town. He is going to investigate the facts, analyze the laws and come up with realistic options. He quoted me 2 hours x $350/hour = $700 for his legal service. 

    I will keep you guys updated.

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    10y

    Good for you that you have a good lawyer. I am not a fan of the profession but in this case you very much need one!   We will be looking for updates.  And do keep in mind whatever you say to these occupants may be used against you......

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  • Katie Rogers
    Santa Barbara, CA · Member since 2015 · 644 posts · 17 votes
    10y

    You need to get a hold of some real facts.  With real facts in hand, you can step back and look at this problem from the couple's perspective.  You have already said there are multiple generations living in both units and have been for upwards of 40 years.  That does not sound like a couple looking to sell their home or renege on a mortgage.  So I would want to know exactly what happened that it ended up "bank-owned."  Perhaps someone needs to go after the bank, and make this couple whole.  Maybe you should be having a compassionate conversation with this couple from the perspective that you are all victims together who should be seeking the fairest solution for all concerned, as opposed to threatening an eviction proceeding.  Reading most of the comments really shows where the bad rap landlords in general have comes from. 

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  • Account Closed
    Investor · LOUISVILLE, KY · Member since 2013 · 299 posts · 137 votes
    10y
    Originally posted by @Katie Rogers:

    look at this problem from the couple's perspective.  

     What about her perspective?  She is now an owner of a home with squatters, regardless of the past circumstances.  The new owner still has to pay the mortgage, regardless of the past circumstances.

    Perhaps someone does, but it's NOT the new owner.  There should be no conversation between the new owner and the squatters.  All dialogue should be done through certified mail from this point forward. 

    Whatever got the squatters into this situation is irrelevant to the new owner.

    Perhaps another persepctive...

    Imagine you come home and there is someone in your home.  You can't get them out quickly.  And yet, you have to pay your note, or you will lose the home.  You have to pay insurance, or you risk tremendous financial loss because of these people. 

    They tell you they lived here in the past and just want to hang out for free, as they've been wronged in some manner, which has nothing to do with you or your family.

    What do you do?

    I know what I do.  It's not having a conversation.

    Maybe I'm heartless.

    Maybe that's the perception I give.

    If that's the perception people hold, it doesn't bother me much.

    I don't buy a home to allow squatters to occupy it for free, regardless of their past circumstances.  My opinion is the original poster needs to start eviction immediately.  Accept no payment under any circumstances.  All dialogue is to go through attorneys.  The only time she should ever see them in person is the day the sheriff comes during the set-out.  Period.

    Keep rockin',


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  • Katie Rogers
    Santa Barbara, CA · Member since 2015 · 644 posts · 17 votes
    10y

    Well Adam,

    What about the new owner's perspective?  Well, what about it.  Judging by the comments, everyone is thinking about the new owner's perspective and no one is thinking about this couple who have possibly been defrauded.  So the first step is to get some real facts, and find out if they are actually squatters before giving them a prejudicial and derogatory label.

    What if what happened to them happened to you and your family.  What would you do if you were in their shoes. Please do not respond by saying you are too smart to have something like that happen to you.  Bernie's clients probably thought they were pretty smart, too.  I, for one, would not want to be part of a fraud that was committed toward another person, not would I want to profit by another person's pain. 

    Your scenario is not a proper analogy, and therefore is irrelevant to the issue at hand.

    Personally, I choose to be the sort of landlord who also makes the world a better place by providing nice rentals that people can call their home at a fair price, resulting in a win-win for everyone.  There are plenty of landlords on BP who feel the same way.  I just wish they were the majority.  Judging by this thread, they are a very small minority.

    2Reply
  • Derek Sease
    Plainfield, IN · Member since 2016 · 16 posts · 9 votes
    10y

    @Ewan Tong any update?

    0Reply
  • Ewan Tong
    OP
    Real Estate Investor · Cambridge, MA · Member since 2015 · 26 posts · 5 votes
    9y

    Thank you all, BPers!

    After 10 months, my lawyer eventually got the people out of my house by offering "cash for keys." I am not allowed to disclose how much I offered, but it is A LOT!

    Thank you all again for your support. I hope this is a lesson for everyone!

    1Reply
  • Account Closed
    Investor · Allentown, PA · Member since 2015 · 101 posts · 69 votes
    9y

    In  my state (PA), you can file for non-payment eviction, and if you win, you have 180 days in which to file for the put-out (final possession) for that judgement.  If you can get this far,  it gives you the leverage you need to get them to act while extending whatever amount of grace (time) that you feel is warranted for their plight. I'm not sure if this is an option for you.

    0Reply
  • Dale Riola
    Flipper · Plainfield, IL · Member since 2017 · 9 posts · 9 votes
    9y

    I am sure while it was a large sum of money, having this finally resolved must feel nice. Hopefully the house is not needing too much repair to rent out. 

    0Reply
  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    1st. Yes get property insurance. Protect your investment. 

    2nd. Give written notice to tenant you are landlord, your contact information, and a copy of month 2 month lease they need to sign and get back to you in 2 days. Utilities (well I'd keep in your name and charge extra in rent to cover what you expect costs to be less hassle right now) but find out who's name they are in to make sure what you want to do. 

    3.  You need a photo copy of their ID's 

    4.When you get the lease back,the next day give a Notice of NON-renewal - Notice to vacate, proper notice per your landlord state laws. Send one in the mail and post the other on the door. 

    5. Do not extend or delay the process.

    6. Their medical situation should be of no concern to you.

    Study the landlord tenant laws for your state.

    Get a new attorney if needed to assist. 

    Document any and all contact. 

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