Inherited tenant screening. What to do?

Question

I'm looking at a duplex today that is half occupied. I realize that if there is a lease in place I need to honor that lease until it expires, but I'm unsure how to handle the screening at first.

Say there's 4 months left on the current lease when I buy the property. Should I have them go through the screening process now, and if they don't pass then let them know that the lease will not be renewed?

Or, wait until the month before the lease expires and run them through screening then?

Also, if the current situation is month to month (which I suspect it is), I would appreciate any advice on how to best handle the screening and subsequent actions for that situation as well.

Thanks in advance.

Account Closed · Answer

Screening is to help you make an educated guess as to the type of tenant they will be.  Once they're in, I don't see the point.  He's either paying the rent, abiding by the terms, or he's not.

I hadn't thought about the sex offender angle, but you can use these websites to see if he's listed, without having to get any info from him:

http://www.kidslivesafe.com/signup/default.php?c=1...

http://www.meganslaw.ca.gov/Search.aspx?lang=ENGLI...

But, if it was me, other than that, I'd find out as much as I could from the seller, as in payment history, etc., and then just wait to see if he pays rent or causes problems.  And you have remedies for those problems.

I also only used M2M agreements.  They're great not only because you can just give a tenant notice to move, but because you can also change your rules or terms with just a 30 day notice.  People having guests parking everywhere?  30 day notice - new parking rules, etc.

Phil Earley · Answer

Before we agree to working with inherited tenants, we mainly screen for criminal and sexual crimes to help insure everyone's safety.

Brendon Woirhaye · Answer

What do you want to get out of that screening?  A feel good validation that your tenants have a particular income or credit score?  Deciding to get rid of them if they don't meet your criteria?

I don't do extra screening when inheriting tenants, as I am not making a decision based on that screening.  I do try to migrate them over to my own rental agreements and standards shortly, however.  After a couple months, you'll know if they pay their rent on time, if they keep up the property well, and if they get along with their neighbors.  If you keep them month to month, you can move them on out if that deteriorates.

If you are going to do a lease, I'd inform them in writing that their lease will not be renewed, although they may go through an application process based on your criteria and your lease.

Chan K. · Answer

@Tom V. Maybe you don't have to stir thing up right away. Get in and get managed, then learn about them for a few weeks. I think if your property is local, you can show up on the weekend a few times. You will find out quickly who you want to keep and get ride off.

For those you want to get ride off, just serve a 30 days notice to quit by a sheriff (I know it is only applicable to M2M). If they are smart enough to question, just tell them their lease is not honor as it is an agreement between prior owner and them not you.

For the good tenants, you wait for a few months, then give them an application to fill out to collect information in case you have to evict them / debt collection for damage or money owe. Just tell them, it is for your record only. I don't think you want to do any criminal check / background check at this moment. As nowaday, you can't discriminate against criminal in your building with the Obama new law that just came out.

I agree with Thomas S., lease is pretty useless. All my units are M2M agreement. Easy out / easy in. It gives landlord more control.

Brendon Woirhaye · Answer

I did mention that I don't do applications for inherited tenants, but I do have a "tenant information form" which gathers a lot of similar data.  I don't run my normal credit, criminal, eviction checks, verify employment, or give a "decision", which is what I do with an application.

Douglass Benson · Answer

Having them fill out an application is the only way that you get to make a decision about removing them that will stand up in court.

It also sends a clear signal that there is a new sheriff in town and now there are rules that must be followed.  It will set a correct tone for the building and establish your precedent.

Good luck to you.

Jeff B. · Answer

I would certainly require that they complete your application, just to have the background in case you need it.

• "To complete our records, we request you fill out our application for the files".

They will create a natural history with you while the existing lease completes.  About 60 days before, if necessary, you can chose to send Notice of Non-Renewal, OR require them to sign your new lease.  This is also the time make any adjustments in deposits and/or rent, but be careful to stay within State requirements and not insult which would result in them reacting with a move-out.

Thomas S. · Answer

If there is a term lease I would wait till it is up. If he is on M2M you can immediately tell him to provide the info you need to thoroughly screen and then inform him if he is accepted or terminated. If you keep him raise his rent to market on a new M2M lease. No reason to have a term lease as that only puts the tenant in control of the property.

Good tenants have no problem signing M2M leases, bad tenants know they are at risk and will want a lease as long as they can get. Remember a lease does not prevent a tenant from vacating when ever they want and the terms of the lease are identical regardless of term or M2M.

Penny Clark · Answer

@Tom V., Sue Kelly is spot on about getting as much information as you can about the tenant from the current owner, such as current tenant contact information and payment history, and of course copy of the lease (you probably have this already). Shortly after your purchase, send an introduction letter to your tenant explaining where to send rent payments to and who to call for service requests. I would also let them know before their lease expires what the new rent will be under your new lease. Shortly before their lease expires give them the option to re-apply and stay  or to submit to you their 30 day notice.

Tom V. · Answer

Thanks @Sue Kelly, I appreciate your advice.

Inherited tenant screening. What to do?

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