Investor · Kennebunk, ME · Member since 2015 · 6 posts · 1 vote
Hi BP Community. I'm asking for some advise on next steps. I signed with some new tenants who have had some bad luck recently. They don't have the security deposit and are now saying that they won't have all the rent until the Friday after they move in (3 days later).
The father was hospitalized (they said) and wasn't working for 2 weeks, and had car issues. They also said their current place has already been rented.
I have never been in this situation before here in Maine. Any advice is much appreciated.
Sincerely,
Chris in Maine
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
"I'm sorry but our policies require full payment of first month's rent and security deposits before keys are allowed to be transferred. "
"In order to remain in compliance with federal fair housing requirements, I have to treat all tenants the same and follow all processes, I am willing to let you out of the lease since you have not moved in yet"
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
"I'm sorry but our policies require full payment of first month's rent and security deposits before keys are allowed to be transferred. "
"In order to remain in compliance with federal fair housing requirements, I have to treat all tenants the same and follow all processes, I am willing to let you out of the lease since you have not moved in yet"
Investor · Lebanon, OH · Member since 2016 · 144 posts · 87 votes
9y
Chris Campbell
You executed the lease without having the security deposit? Was your plan to waive the security deposit all together or were they supposed to pay it at a later date?
I would not allow move in without the security deposit and first month's rent. This is a glimpse of your future. If they can't come up with the required move-in amount, they will likely never maintain the monthly rent going forward.
Mike Cumbie has it right. Terminate the agreement and find someone else. Hopefully your lease indicates that they are required to pay the full move in amount before moving in...
BTW - I love the area you live in. We used to vacation there every year when I was growing up!
Good luck,
Michelle
Investor · Kennebunk, ME · Member since 2015 · 6 posts · 1 vote
9y
Thank you Michelle. I do have first and security as a confirmation clause. I want to do the right thing while also keeping my family and investment safe. Much appreciated.
You need to tighten up your screening and rental policies. These applicants should never have been accepted as tenants.
As a result of you accepting them you have placed them in a very difficult position.
What I would do is give them two options,
1) Inform them they are rejected if they do not come up with the full cash payment prior to move in or.......
2) Have them agree to sign a new M2M lease allowing them to move in and pay the rent as they have offered on the Friday. I would then keep them on M2M for the duration of their residency.
IN all fairness you have created a situation for them that you are partially responsible for and at worse you may lose a couple of months rent before you get rid of them. Best case they turn out to me excellent tenants. Unfortunally they appear to be living on the financial edge and I doubt you have had the last of their late payment excuses. M@M may motivate them somewhat.
Augusta, GA · Member since 2014 · 1k+ posts · 1k+ votes
9y
I have to agree with the others in terms of not giving keys until the security deposit and the first months rent is paid.
When I first started out I had a young, single female tenant with a baby who asked if she could pay the security deposit in payments after she moved in. This was my smallest house and a little difficult to find tenants for.
I agreed and, of course, never saw the security deposit....six months later I was evicting her due to failure to pay rent. When she received the eviction notice from the court she did respond; tenants may do that if they disagree with the landlord filing against them. In her case she wrote that yes, she failed to pay rent and thus deserved to be evicted (!)
Ten points for honesty but this didn't mean she paid what she owed not stopped her from stealing all my curtains and the shelving from the bathroom.
Investor · Allentown, PA · Member since 2015 · 101 posts · 69 votes
9y
The easy answer to your question is "no". This game can be as difficult as you want to make it. Bad tenant selection or poor decisions such as this one, will eat you alive and ultimately drive you out of the business.
Luckily, when you make quality decisions at crossroads such as this, and pick quality tenants (and take care of them), this is an excellent, fulfilling, enriching business to be in. Just my 2 cents (and 20+ years of doing it wrong, then doing it right).
Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
9y
While I'm always an advocate for helping people, there are certain rules behind it. If a tenant needs a few extra days to pay and they've paid on time for a year with no issues, sure, I may lend a hand there. But up front on someone you don't know (or even if you do), NEVER let them move in without the first month's rent and security deposit (or whatever is normal for your area if it's more). The more upset they are about you sticking to that decision, the more validated it is. There is almost never a valid reason for delaying that payment. If they need the time to get the money, right off the bat, they don't qualify. Any person who can't afford to write the check to move in, shouldn't qualify.
Once they move in with keys you gave them, you are restricted to whatever laws govern what you can do if they don't pay.
Investor · Rigby, ID · Member since 2016 · 52 posts · 45 votes
9y
Last June, I rented to a lady and her little daughter. They said they had the first months rent and deposit ready. They got though the background check, had sufficient income, references checked out. We scheduled a day to sign the lease and we met. They did have the deposit but were a couple hundred dollars short on the first months rent. I made the mistake of letting them catch up when she got paid in a week. Reluctantly, I rented to them and gave them the keys. Two months later, I filed for their eviction. I agree with others here, If they don't have the minimum to move in DON'T do it! Find another tenant who will be completely honest with you and have the money ready. I learned my lesson, trying to be nice cost me over a thousand dollars and my time in court. Save yourself a headache and let tell them no..... I have found, when you say no, they can come up with the money and they just don't want to. There are too many people who are accustomed to take advantage of nice people just because they can. Everyone has a hard luck story to tell. People to feel they are the victim will not feel bad when you are a victim of your own kindness to them.
Investor · Charlotte, NC · Member since 2016 · 374 posts · 189 votes
9y
Sign up for one of those landlord website what help collect rent. Have them put it on a credit card and they can pay it back after they move in. Do a little work to help them but don't put yourself in a bad position.
Investor · Lake Saint Louis, MO · Member since 2015 · 84 posts · 39 votes
9y
No money, no keys. Not only will you be handing over your property to a broke tenant, but you will have also taught them that you are a sucker for a sad story. Every month the story will change. This month broken car, next month someone hacked my bank account, the next month I forgot to put a stamp on the rent envelope, and on and on and on.
No money, no keys. Not only will you be handing over your property to a broke tenant, but you will have also taught them that you are a sucker for a sad story. Every month the story will change. This month broken car, next month someone hacked my bank account, the next month I forgot to put a stamp on the rent envelope, and on and on and on.
I like you are advice except for the key part. This is 2017. Who has keys anymore. Electronic locks for the win!
Investor · Juneau, AK · Member since 2015 · 980 posts · 741 votes
9y
Of all the screening requirements, having the funds required to move in is perhaps the most telling and most important. If they don't have it now, they likely won't have it in the future.
Agree with the board on a nice opportunity here.. a chance for improving your signing procedure to have some proof of funds or cashier's check on the table to sign the lease and trade the money for the keys.
Rental Property Investor · Sacramento, CA · Member since 2016 · 267 posts · 214 votes
9y
@Chris Campbell Chris, I think we all know that the comments made on this thread are accurate. Stronger tenant screening is key. That being said, it sounds like you're looking for assurance that you're doing the right thing. Given your uncertainty, I can tell you're a nice guy that doesn't want to be mean to the tenants who are down on their luck. For that, I commend you. However, you are a landlord, and you have to take your heart out of it. You're running a business.
If you'd like to help them, recommend a good mechanic. Other than that, I would not allow them to move in, and I would look for stronger tenants. Dealing with problems before they even move in is a huge red flag.
St Thomas, Ontario · Member since 2013 · 575 posts · 408 votes
9y
@Chris Campbell I would not let these tenants in under any circumstances. They can't front a deposit and they can't pay rent. What more evidence do you need? Evictions are costly and time consuming, and there may be damage in the meantime. Tenants are on their best behavior before they get the keys. Look at what best behavior looks like with these tenants. No! The idea here is to make money, not lose it. There have to be better tenants than this in your area. Tell them that their application is rejected based on failure to pay all move in monies on a timely basis. The other posters are right, if they have excuses before they move in they will have lots of excuses after they move in. You need to end this now.
Real Estate Agent · Horsham, PA · Member since 2016 · 27 posts · 11 votes
9y
I'm all for helping people that are in tough spots, however I think you should take a hard stance here. Sets the tone for how you do business as well. I would wait until they have all of the money up front
Real Estate Broker · Chicago, IL · Member since 2011 · 15 posts · 1 vote
9y
I would not recommend that. Sure we are compassionate but we have to be smart as well. Stick firm with your requirements and never allow move in without all funds received. Good luck!
Real Estate Investor · atlanta, GA · Member since 2013 · 456 posts · 237 votes
9y
It's very difficult at best to be an investor with heart...you really can't do it. I've rented properties for over 25 years now and it's just like dating. Things usually are at the very best at first impression and go downhill from there. Once a tenant is behind, they almost never make it back on track. There are exceptions but you're mostly talking about the "rule" as an investor. If you're independently wealthy, you can do some charity as I have. I recently put a Mom & her daughter up in one of my houses to help them out...even gave the Mom a job. She was never productive, never got her to pay any rent and she disappeared after 4 months without a word...just a car in the driveway to tow away. We do co-housing & shared housing and it's been a nightmare at times. We still do some of it but will only now focus the model on apartment complexes we can buy. This way they can't evade us on rent day! Go with your gut on renters....the stories....are mostly just that...stories. You have bills to pay and rainy day funds for the "what-ifs"....right? Not your fault that most renters don't. In most markets today, the renters are the "losers" by definition so you have to be extra careful now....we've found that 10% of renters are strong and just don't care to own a home for a variety of reasons. Atlanta has some of the worst renters that I've ever experienced. Do yourself a favor and let these folks go! Luck!
Investor · Hampton, VA · Member since 2017 · 49 posts · 86 votes
9y
Don't make the same mistakes I made. I did the same thing in the past and it never worked out in my favor. I agree with everyone's comments above. People will take advantage of you (my tenants even wrecked the bathroom on top of it). I found an old book, Landlording, in the local Barnes and Noble and it has helped me with the tenant screening process. The next few times it went much more smoothly.
Rental Property Investor · Broken Arrow, OK · Member since 2016 · 1k+ posts · 1k+ votes
9y
Its cheaper to leave the property empty then it is to have to evict them a month later. This is a very bad idea, they're starting off dictating to you that they're probably going to be an ongoing issue. Its hard to be firm sometimes, and we've all made mistakes by trying to help people, but its your money invested in the property. Would you let them drive you car for a week if they didn't have a vehicle???? NO, then why would you even consider letting them test drive your home for a week? I always tell people in situations like that, I'd love to help them, but "my business partners" won't allow it. Put the blame on the bad cop.