Lease wasn't signed correctly and tenant always pays late

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Lease wasn't signed correctly and tenant always pays late

Eva Taylor
Homeowner · sanford, MI · Member since 2010 · 4 posts · 0 votes

I am a very new landlord. We bought our house turned rental nearly three years ago this coming summer. Last December my husband's job was moved 150 miles away so we had to relocate. We didn't want to try selling our home since we do want to move back. Due to this choice we decided to rent out our house rather than selling it. I did a lot of research, found a lease and set out about finding a good renter.

The renter we found sounded very intelligent over the phone and once I met her in person she seemed ok. She was to move in on the 25th of September and at that time she was to have the $700 first months rent and a $700 dollar security deposit. I met her at my rental at that time. She had her car packed and her husband was driving up from downstate with the rest of their belongings in a rental truck. At that time she had only $1200 of the $1400 needed to move in. She said she would get the rest to me by mailing a check. By this time I was feeling pressured so I gave in. This was one of the first major mistakes I made. I also gave her the lease to sign and have her husband sign it when he got there, they were then to return the lease to me when I came up next. Several days afterward I ended up having to drive to two hours to get the rest of my money from her since she had an excuse of not finding her checks, she couldn't get the money from the atm, etc..At that time I also got the lease.
Once I was home and I had examined the lease I found they had not signed and initialed it as it was supposed to be. The lease is on page 34 of this link. http://www.legislature.mi.gov/documents/publications/tenantlandlord.pdf
What they did fill in was on the first page. I had signed the lease at the time of the move in and even had showed the women where to sign and initial. Once I had discovered this error I notified the tenants. She said they would sign it correctly, however, when I drove up again to have them sign it they weren't home. I have to drive 2.5 hours one way to get to my rental. I had spoken with them before the trip to make certain they would be there but they made other plans after the fact. I also copied and emailed them the lease but they still never signed it and returned it. So, I didn't push it.
Now it is January and so far they have had an excuse each month why they don't have all the money by the due date. Eventually I do get all of the rent after many apparent lies by the tenant. This month I got the "my grandmother died" excuse. Previously I have sent out the notice to quit paperwork and they always had paid before it can be filed with the court. I am at the point that I want them out. I am sick of the lies and the accusations from my renter that I am "trying to maker her feel like a deadbeat".

My question is, is the lease valid since it wasn't signed correctly? What legal options do I have?

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Luis A.
Real Estate Investor · Atlanta, GA · Member since 2009 · 339 posts · 126 votes
16y

First, by putting up with the excuses you are actually making the situation acceptable to them, is like you are consenting due to your actions.

Whether the lease being signed correctly is enough to kick them out would probably be down to a judge to decide but is not very strong. And again if you go to court a judge will question why you have accepted late payments in the past as that would imply that you are Ok with accepting payments like that.

Jon is correct that the way to do it is through eviction and for that they would have to violate the lease. Check your state laws to see what is the eviction process and dates. You need to follow those eviction procedures to the T or the judge will throw out your eviction request.

On the other hand it sounds that since they break the agreement every month it should not be so hard to get them evicted the next time they don't pay.

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    16y

    If they're not paying on time and you want them out you will have to evict them. Regardless of the situation with the lease, they are your tenants, and are governed by some set of landlord/tenant laws.

    To do an eviction you'll need to get a lawyer. Best to find one who specializes in evictions. A reference from another landlord would be best, but just making some phone calls would do in a pinch.

    There is some timeline for the rent. For my lease, its due on the first and late on the fifth. On the fifth, I post the three day pay or quit notice. On the eighth, I can start the eviction process. What does your lease say about this? What's the law in your state? Its certainly something similar, though the exact dates may vary. Your first step is going to be to post the notice the next time they're late.

    Find a lawyer and pay $200 to have a chat about the situation and your local laws.

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  • Brian LevredgePro Member
    Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
    16y

    You should check with an attorney but I don't think the lease being improperly signed voids your rights as landlord. You need to stop letting them walk all over you. If you haven't already, serve them a 3 day notice next time they are late. Prior to this I would have a conversation with them letting them know you will start eviction proceedings next time they are late. I would also put the same down on paper and send it certified mail. You need to document everything.

    Tell them you are not interested in excuses. They have a contract that should outline the terms of when they are supposed to pay. If they are not following that, they are in violation of the lease.

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    16y

    I should have asked right up front, what do you want to happen here? Besides having the tenant pay right on time and in full each month.

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  • Luis A.
    Real Estate Investor · Atlanta, GA · Member since 2009 · 339 posts · 126 votes
    16y

    First, by putting up with the excuses you are actually making the situation acceptable to them, is like you are consenting due to your actions.

    Whether the lease being signed correctly is enough to kick them out would probably be down to a judge to decide but is not very strong. And again if you go to court a judge will question why you have accepted late payments in the past as that would imply that you are Ok with accepting payments like that.

    Jon is correct that the way to do it is through eviction and for that they would have to violate the lease. Check your state laws to see what is the eviction process and dates. You need to follow those eviction procedures to the T or the judge will throw out your eviction request.

    On the other hand it sounds that since they break the agreement every month it should not be so hard to get them evicted the next time they don't pay.

    1Reply
  • Eva Taylor
    OP
    Homeowner · sanford, MI · Member since 2010 · 4 posts · 0 votes
    16y

    Every time they have paid late I have sent out the 7 day notice to quit. In Michigan it is my understanding that if they pay within that stated period I can't evict them and the renters know it. If they don't pay then I can legally start the eviction process. I have spoken with the renters each month and have stressed that they have to pay on time but every month something else happens. I think she(the renter) knows how to work around the legal system.

    If she would pay on time each month I'd be fine with that. It's the constant struggle to get the money on time that is driving me crazy. I can't evict them if the lease is valid because it is for a year term. But if it isn't valid the rental term would be a month to month situation and I could file with the court to get them out...I'm afraid the judge would say the lease is valid even if it wasn't signed properly and then I wouldn't have a leg to stand on.

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  • Brian LevredgePro Member
    Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
    16y

    Is there a provision for late fees if they don't pay by the due date? If they are paying late, you should at least be getting something extra for your troubles. In some states (like CA) when the rent is late, you are allowed to apply the rent to late fees first, and rent second. This means that the rent is still unpaid and late and allows you to move forward with the eviction process. Again, you should really consult with a local RE attorney who has knowledge of tenant/landlord rights in your state.

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    16y

    I would assume the lease is valid. If you want an opinion you can take to court, pay a lawyer for it.

    Does the lease specify a late fee? Mine does. On the fifth, the late fee is $25. It goes up $5 every day after that. My lease also says that I can apply any money I get to late fees and other charges (e.g., utilities), the to rent. So, if they paid the rent, but paid it seven days late, and didn't include the late fee, I would first apply the money to the late fees. Then, the rent would be short, and would be unpaid, so I would proceed with the eviction. My lease also specifies that accepting a partial payment doesn't give up any rights, such as the right to evict. Again, you should speak to a lawyer about laws and practices in your specific area.

    In your description, I didn't see anything about screening. Did this tenant pass a screening? If this has been an ongoing problem, at least one of their prior landlords should have mentioned something.

    You say you "sent" the seven day notice. Mailed? Here mailing the notice is a pretty weak way to do it, and that gives up some rights. Best to physically hand it to them on the first day you can. Second best is to post it in a "conspicuous location". That is, their front door.

    My lease also specifics that if they mail the rent, I must receive it by the due date. If I don't, it late. USPS problems are theirs, not mine. I assume you typically get the rent by mail.

    I assume the January rent has been paid. If not, proceed with an eviction based on that. Assuming it is paid, and that the February rent is not in your hand by the due date, I'd be on their doorstep the morning of the day the rent is late. Have the pay or quit in hard. If they don't hand over the rent, in cash or money order if that's what you require, give them the notice. No discussion, no arguments, no begging, no excuses. If there's no rent, hand over the notice. Tell them if you don't have the rent and late fees to them by the first day you can file for eviction, you WILL file for eviction on that day. If they're not around or don't answer the door, post it. Be sure you have a lawyer lined up to do this. It would be a good idea to speak with the lawyer before you hand over the pay or quit, in case they have their own form and process. Mine does.

    I would also inform them, either by posting on their door or telling them that you will enter the property for inspection on the day you can file the eviction. This avoids any claims of improper entry.

    Assuming you don't get the rent at that time, and it doesn't show up by the deadline on the pay or quit, I would be on their doorstep the morning you can file. If they're there, demand full payment on the spot. If they're not, go in and have a look. If its empty, you're done (again, check with a lawyer about local laws and conventions). They've chosen the "quit" option. If they're there, or they're not, but their stuff is, the next stop is the attorney's office. I would be sure I had an appointment scheduled, and had all my paperwork on me so we could file the eviction ASAP.

    Hopefully it doesn't get this far. Could be that by showing some backbone, they will get in line. If not, at least you're rid of them. Isn't landlording a joy?

    0Reply
  • Ralph S.
    Real Estate Investor · Sacramento, CA · Member since 2008 · 566 posts · 356 votes
    16y

    Eva
    Perhaps you misunderstand.
    A notice to the tenant every time they pay late is not your only recourse, regardless of the state of the lease. Repeated violation of the terms should be enough for an eviction.
    Have that talk with the lawyer.

    0Reply
  • Eva Taylor
    OP
    Homeowner · sanford, MI · Member since 2010 · 4 posts · 0 votes
    16y

    Thanks for all the advice.

    I have to drive 2.5 hours each way to serve them anything so mailing is the best for me. My rental is in Northern Michigan and I'm in the middle of the state. It isn't cost effective to drive every month to serve the letter.

    The rent is due each month on the 25th. She hasn't paid yet...The renters deposit the rent directly into my bank, they don't mail a check.

    As much as I want them gone I am also concerned about getting a new renter in at this time of year due to the heating costs associated with a house. I was told this is a really bad time to try to rent.

    As for screening, I failed with this one. She was moving from Texas to Michigan and I didn't call her previous landlord in Texas. I did check her income...This really is my fault with the renter. Everyone who applied before her I screened very well and they failed the application.I used my "heart" on her instead of my head. She was in a similar situation as mine with moving and she sounded so much more intelligent than any of the other applicants, I interviewed 20+ people. This problem really is most of my fault...

    I am hesitant to consult a attorney as my financial situation is dire. I need the rental income to pay my mortgage or I will default.

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    16y

    Sell this house. End of story. You don't say what your payment, taxes, insurance and rent are, but I would guess you're running in the hole. To be truly cash flow positive, you need to have the rent be twice (2 times) the P&I part of your payment. If the rent is over the PITI payment, and you consider that difference cash flow, you're falling into the "phony cash flow" myth.

    You do have landlord insurance on this property, right? Not just the homeowners you had when you lived there.

    I'd suggest hiring a property manager, but that's another cut out of the meager income from this property.

    If they pay after the notice deadline, but before you can start an eviction, then you're good. If you don't have a late fee in your lease (I don't think you answered that question), then find out if one is allowed by state law. Start charging it. That will at least make up for some of the hassle.

    This situation is stressing you out, both mentally and financially. Realistically, you're going to terminate this person's lease as soon as it ends. Then you have to find another. At best, you're going to have a short vacancy. My last two vacancies have caused me two months lost rent, each. I don't think you want to be a landlord, you're just ended up being one accidentally. Sell that house and free yourself from this burden.

    0Reply
  • Eva Taylor
    OP
    Homeowner · sanford, MI · Member since 2010 · 4 posts · 0 votes
    16y

    Thank you for the input. In the lease they are given a $25 discount for paying early. There is a link to the lease in my first post.

    I really don't want to to sell but it may be the best option...

    Thanks again.

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