Investor · High Falls, NY · Member since 2016 · 4 posts · 3 votes
so, i use an e-payment system, and last summer it generated a $0 lease and sent it to the tenant. That was dumb. But what was worse is that when it came back to my office, my person signed it too! but i'm not done. After that we didn't bill the tenant for 11 months, and now we finally caught it.
The lease is fully legally countersigned by my team.... what is my recourse ?!?!
Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
9y
If you went 11 months without rent and you just now are noticing, you should rethink being a landlord. I don't sign leases without getting money upfront with them.
Investor · Orlando, FL · Member since 2017 · 14 posts · 6 votes
9y
If you received any payment at all it will basically lock in a lease that hasn't been signed and the $ amount that was agreed upon. In my state anyway. If you didn't get any payment from the tenant than I'm not sure your legal recourse ?
Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
9y
If you went 11 months without rent and you just now are noticing, you should rethink being a landlord. I don't sign leases without getting money upfront with them.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
9y
I HIGHLY doubt a renter is going to be able to let alone actually want to cough up 12 mo worth of rent. That's a significant amount of money to expect someone to come up with.
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
Is it a 12 month lease? If so renewal is coming up so I would fix it. You would be hard pressed to go to court and say "I signed a lease with them for $0 and let them live under those conditions for 11 months but now I want them to back pay me what I really wanted to charge them"
I would guess you caught it because renewal is coming up. I would also guess they were your quietest tenants who never complained a minute.
So my advice would be to fix it going forward and issue a "Notice of rent increase" to take effect after their lease is up.
Flipper · Reynoldsburg, OH · Member since 2017 · 20 posts · 9 votes
9y
There's no way to recollect on $0 rent lease, but hopefully you have a month to month clause in your lease so that you can force renewal if not I'd schedule an inspection of the premises just to see if unit is being kept up an go from there. Also if you have an attorney that you use for evictions explain situation to him to see how you can get tenant to renew or vacate. So sorry to hear this has happened.
That's funny! If that was the case I would plan a bargain basement price sale. If it was worth 100K put it on the market for 20K and let the investors fall over themselves until one offered the best terms with no due diligence and a 50K automatically hard EMD.
Seriously though I'm not sure what in the world one would do, but I would bet it wouldn't be cheap.
DHS/Investor · Bowie, MD · Member since 2015 · 149 posts · 65 votes
9y
Man, you just have to take an L on this one, sorry to say. I don't understand how this was not noticed a lot earlier than 11 months. I'm pretty sure your tenant didn't call or either complain about anything the last 11 month he/she was living the life rent free, LEGALLY!!! MUST BE NICE
Rental Property Investor · Huntington Beach, CA · Member since 2017 · 2 posts · 1 vote
9y
Lucky tenant! I'd say you could certainly justify a small rent increase above what you were going to charge them. It's going to be impossible to get that lost rental income back. Take it as a loss, and a lesson.
Rental Property Investor · Haverhill, MA · Member since 2017 · 290 posts · 185 votes
9y
HAHAHAHA.... sounds like your "team" are a bunch of buffoons. Not only did they not catch the $0 lease, but then somehow failed to send a bill for 11 consecutive months? Furthermore, no income/expense/profitability analysis was performed during this whole time? Maybe you guys aren't cutout for business.
Real Estate Investor · Tempe, AZ · Member since 2012 · 874 posts · 648 votes
9y
@Reed Mollins you might want to spend a few minutes making sure there are no links between
a) the tenant
b) the person who generated the lease
c) the person who counter-signed the lease
There is a greater-than-zero chance this isn't simply a "mistake."
El Segundo, CA · Member since 2017 · 43 posts · 48 votes
9y
ahh yes, the classic, "accidentally sent a lease for $0 and had all parties agree and then not realize I wasn't getting paid for 11 months" mistake. Really gotta be careful for that one cause it sneaks up on you.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
9y
Whooooeeeeee, I would love to be making enough money so that if someone didn't pay rent for 11 months I would not even notice. At this point I wouldn't even bother trying to get them to pay I'd just end a notice of non-renewal.
Investor · Philadelphia, PA · Member since 2017 · 39 posts · 28 votes
9y
This is completely your fault. You let this person live rent free because you didn't charge them any money. you have a signed contract stating they have to pay nothing for rent. Then you let it continue for 11 months. Let them have their last month and send them on their way.
Hire someone that only gets paid when you collect rent. They'll make sure you get paid. Check to make sure your employees aren't stealing from you. You're an easy target. You aren't minding the till and you don't have anyone else doing it either.
This is not the tenant's fault. If my landlord sent me a bill that said my rent was $0 I wouldn't pay either and I return wallets with the cash still inside. You can't fault someone for not giving you money when you didn't ask for.
Seriously if you mortgage lender sends you a bill that has a zero balance are you just going to pay them anyway?
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
9y
@Reed Mollins, there are some legal remedies when there was no true meeting of the minds and a scriveners error. Those will vary from state to state. You need to check with an attorney on it. If it were me I would consider the bad press I might get out of it and the time it might take. You could try meeting with the tenant and try to work something out, or just bite the bullet and move on. I would definitely contact an attorney if you plan on making any attempt to collect on part of it. You don't want to make a bad problem worse.
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
9y
@Account Closed, you think there has never been a mistake made on a written contract before? You think if the accident made the rent $1 million a judge would make a tenant pay it? There are a lot of cases where contracts are reformed to the intent of the makers. Ever heard of unjust enrichment? There are plenty of legal theories in both current law and common law to fix an error in a contract. There may be some laches defenses, but the law is supposed to be fair. That is why there were courts in old English law of law and equity. One to follow the written law and one to provide fairness. There are defenses and there are evidence requirements, but it is definitely possible. Ever hear of the Campbell soup case? The courts broke a contract entered into knowingly as it was simply not fair. Hence the contract of adhesion defense. For me the question is would I want my mistake to get put on a court docket and get tons of bad press?