Inheriting a tenant living in deplorable conditions

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Inheriting a tenant living in deplorable conditions

Jessica D'Amour
Real Estate Investor · Buffalo, NY · Member since 2016 · 1 post · 0 votes

Hi everyone,

I am new to the BiggerPockets website, and I have been listening to the podcasts for a couple months now. My husband and I bought our first investment property in June 2015, a 3-unit house in Buffalo, NY which we live in and rent the other 2 units and things have been going great so far! Our goal is to purchase a second investment property this year.

We are looking at a 4-unit house nearby which needs some work. When we toured the property, we saw that the condition of one of the units was what I would consider unlivable- extremely dirty, holes in the walls and ceiling where the plaster fell off, bathroom was absolutely disgusting and barely usable, junk everywhere. And someone is living there! According to the current owner, this tenant is happy staying and paying his lower rent. We did not meet this tenant but my understanding is he is an older gentleman.

My question is, what kind of liability would the landlord have for something like this? In order to fix this unit, it would likely be a total gut, requiring the tenant to vacate for renovations. What if the tenant refuses to allow us to fix the place, then raise the rent accordingly? If it's his choice to continue living in these conditions, then something happens to him, could he or his family sue the landlord?

I would appreciate any input! Thanks!

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  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    You can be held liable for what happens to a tenant if it is a result of the condition of the unit regardless of whether the tenant chooses to live that way or not. For example landlords are responsible for anything that arises from a hoarders behaviour.

    Your best option is to terminate the lease and renovate the unit. Once done you find a tenant willing to pay market rent.

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  • Kevin Siedlecki
    Investor · Madison, CT · Member since 2014 · 710 posts · 458 votes
    9y

    @Jessica D'Amour - I had a very similar situation on a house that had great cash-flow and location, and I walked on the deal because of it. First of all, do not trust a word the seller says about current tenants. I assume they are lying about pretty much everything until I see it on paper - and it's amazing how often they "misspoke" or "misunderstood." 

    It can be tempting to think the current tenant can live there and keep paying, then you can fix it up when he moves out. It's much more likely, however, that the tenant has complained about the unit and the seller doesn't want to deal with it. Even if the seller is telling the truth, if the tenant moves out sooner than expected or complains about the living conditions, you're on the hook for a gut job. If it's actually dangerous, yes, he could sue.

    You can make the tenant leave when you buy, because you are legitimately doing improvements, but if he refuses, you've bought yourself a huge headache, and there is really no way of knowing how that's going to play out until you bring it up. Remember, you never have to buy a house. There is always another deal. 

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  • David NilesBusiness Member
    Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
    9y

    Why would you want to own a building in that condition and knowing that you have a person living in that environment? Not to mention, doesnt look too good on you as the owner / landlord.  

    As a property maintenance and repair provider, I see units like these all the time and yes I understand alot of the time, the tenants are to blame for the conditions. 

    My recommendation is to get rid of this type of tenant and bring the unit up to a condition that attracts a better class of tenant. 

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