Can you deny tenant that has already signed the lease?
Property Manager · Ladera Ranch, CA · Member since 2016 · 17 posts · 9 votes
Hi All,
I have a future tenant that signed a lease and has given a security deposit already. I just received a call though from one of their references telling me to not let them move in and that they were in his presence when I first called them as a reference. He is from a foreign country and has no real credit/ rental history. I called his work and his income is verified. The reference told me that he will pay the first month and not pay again and that he has children so it will be extremely hard to evict him. I'd rather just not have him move in than go through all the hassle. Any info on this would be of great help!
Thanks!
I know in our lease we have stipulation that if we find on the application something that was a lie we have a right to cancel the lease. But in your situation I would bite the bullet and let him know that one of the references came back with non pay and if he can verify that it's not true then we have to cancel the lease. Its simple to verify if its true just ask them to show 12 months of bank statements showing rent being paid or voided money orders. if he doesn't have a bank account and no other way to prove that he has paid on time during that lease then you have to side with the reference. Him getting in the property and you having to evict can take a longer time than you telling him verify the allegations that a previous landlord sent to you about him. If its true than its good you caught it now and not later down the road.
You have a binding contract, You would need to check and see if somewhere on the application form what is mentioned about adverse or incomplete entries. To proceed you would need the persons name that gave the negative reference, ask them to provide the information in writing, email is fine.
Not sure what you actually checked for credit, employment, but if that did return ok, and you had never heard from this person giving the negative reference, you'd proceed.. you may need to do just that..
You could ask for additional paid rent verification as @Shaun Patterson suggested and I would ask for that if you can get the reference respondent to send a written detail of the situation.
Double check your lease, and application form does it say anything related to be able to deny.... And download your state landlord tenant laws.
(I would not send any money back without a joint signing by you and this tenant that does a lease cancellation, at the signing you hand over the check, and it would have to contain verbage of adverse application information. )
Or call your lawyer..
good luck
I'm not a lawyer. If you decide you want out of the contract, I think you should talk to one (an attorney) asap.
The reference is a known liar. They are either lying to you now, or they lied to you the first time. For someone who isn't a liar, lying because "the person was in the room" is not a normal thing to do. A simple "I'm sorry, I can't talk right now can I call you back?" would have sufficed if they were uncomfortable talking with this person present. Not sure how much weight I'd put on the word of this reference, esp if the rest of the application checked out. How much weight do you really want to put on the word of someone who has admitted lying to you?
I take first and last months rent in addition to deposit, the last months rent I suppose offers a little protection if someone stops paying after a month, and I think generally deters people who would do such a thing.
Lots of bad advice in this thread, much of which is illegal in California, here's the deal:
You need, first and foremost, to talk to an attorney and your broker if you have one. Nobody can properly answer this without having read your lease.
However, speaking very generally - typically in California, once you sign the lease and the tenant is delivered a copy, and once the tenant delivers the agreed-upon Move-In Costs in the agreed-upon time period (typically deposit + first month's rent), that's the end of it, you're locked in, handcuffs and all. Only in the event the tenant defaults on your agreement can you even begin thinking about trying to get rid of your tenant. (Fun fact for non-CA lurkers: same goes by default for the sellers in our state's purchase contracts!)
However, while your suspicion may very well be correct, I implore you to consider the fact that the tenant has, at this point, done absolutely nothing wrong to you here. I have had experiences where the reference you called may have an ulterior motive or agenda as to dissuade you from renting to him, as I think I saw one other person mention.
If anything, it's lesson to do your diligence and wait for all diligence calls to be returned before signing a lease, ever.
For what it's worth, if you used the latest C.A.R. Residential Lease Agreement revision we just released in June, you may benefit from the protection recent language we just added in the event the tenant has not violated the lease, but was not truthful on his original application:
41. A) (...) Landlord may cancel this Agreement: (i) before occupancy begins; upon disapproval of the credit report(s), or upon discovering that information in Tenant's application is false; (ii) After commencement date, upon disapproval of an updated credit report or upon discovering that information in Tenant's application is no longer true. A negative credit report reflecting on Tenant's record may be submitted to a credit reporting agency if Tenant fails to fulfill the terms of payment and other obligations under this Agreement.
Crossing my fingers for you!
Thanks for all this good input! Definitely a weird and unfortunate situation. Going to do some more research today on the tenant and previous addresses to ensure they are legit.
And to answer the question of credit report it came up as "NA" since he was from a foreign country I guess. And to better judgment we decided to take a chance because everything else vetted out...or so we thought. But I will not be taking any more tenants without some sort of credit regardless of how nice they are or how much they make monthly.
Thanks @Nick G. I do have a clause in my lease stating that if the information given in the application is false that we can terminate the lease but does a false reference count as false information? Still waiting to talk to the reference again since I have not personally talked to them yet. but also going to verify every piece of information they supplied.
Be straight up with the tenant, "I cannot lease to you on a reference advice. I am sorry but the contract will be terminated" as almost all contract can be terminated if the parties agree. if you do it by phone remember to apologize constantly so the situation doesn't escalate and let him know there's nothing else you can do and you will send him the cancellation. I doubt he will fight you in court, it's a possibility but that's a calculated risk, I would be willing to take the chance, if he doesn't have money for rent next month, I doubt he will have money for an attorney today.
@Derek Bonanni I'm not an attorney or a judge so I can't answer that definitively, but I suppose it could be possible. If what you have heard about this tenant is true, you will want to dot your I's and cross your T's more than ever in terms of following due process to the letter, since someone like that may know how to game the system if you slip up.
Also bear in mind that just because your lease states something - even if the tenant agrees to it - it may not be legally enforceable, or worse, if it contradicts the law or the tenant's rights, it may be totally void altogether.
You appear to be an agent in CA - assuming you're a Realtor as well, I'd recommend sticking with the C.A.R. lease agreement, since you'll also have C.A.R. at your back in the event that language in the lease is ever contested.
Forgetting legalese and risk managagement and bla bla bla for a second, here's what I might do in your shoes before getting worked up about something that hasn't happened yet:
I might reach out to the tenant via email, saying something to the effect of "I wanted to let you know that one of your references did not have positive things to say about you. I made the decision to lease to you based on trusting you and what you have told me, and I wanted to give you a chance despite not having a credit score. I'm not sure what happened between you and this prior landlord, but I hope that we can have a good relationship with each other as we move forward, out of respect for each other and our families who you and I work to put food on the table for. Please let me know your thoughts."
I have been able to save doomed situations in the past by humanizing issues and the real people whom it affects. Might be worth a shot. Plus, anything the tenant writes you back will be in writing (and by the way, don't communicate with your tenant at this point unless it's writing.)
I gotta say, the more you go on about this the more questions I have... Which should not be an issue with someone you have already signed a lease with.
I think you would do well to be less concerned with your lease clauses and more concerned with your tenant vetting.
Best of luck.
I have a couple of thoughts.
1) Does your application ask whether the applicant had a previous eviction and/or unpaid rent from a previous residence? Did he lie on the application when he answered? It sounds like he was evicted from his previous place or maybe he failed to pay. If yes, then you could claim he falsified his application so the contract is null and void.
2) Tell him that you found mold in the house and you are not going to be able to rent it out until you can figure out a way to remedy the problem. But if he wants you to hold it until you fix the problem, you will or else you would be willing to refund him his money. But you cannot put someone in there until the mold issue is remedied.
Ultimately, I would think if the guy was a scammer, your credit, criminal and eviction checks would have turned up something. But if you really believe the previous landlord, then don't follow thru with it. I'd much rather have a tenant take me to court for failing to follow through with a lease, then letting a bad tenant in there and trying to figure out how to get them out. Not only will you not collect rent but they could do significant damage too.
I do believe that if they lied on the application, you can get out of the lease - especially if you have not yet given them the keys. If not, then I would try the mold thing. Its a way to make sure you don't have to let them in for now. And then you can hope they ask for their money back. If they do, be sure to sign something saying neither party is beholden to the lease any longer.
Then you're done with them.
Wouldnt there be some
Sort of eviction documentation in clerk of courts from his previous eviction? Id just send him that and say no thanks good luck.
Not nessesarily
If tenants fail to pay I give them 3-days notice and they know I'm not joking.
If they move out or pay within next couple days, I'm not filing an eviction - no need.
So, there won't be any records if they always move out fast.
Let's say, they damaged the property and I have only one month security deposit.
Sometimes it's not rational to go after them through the court - it's easier and cheaper to fix it quickly and get another tenant in.
In couple such cases I didn't even lose any money because the new tenants move in before the end of the month, which was paid by the security deposit.
Also, sometimes I expect bad things and it turn out not so bad. For example, I took a tenant with eviction (which I never do) because that condo had very bad upstairs neighbor and nobody wanted to stay long enough. Now, she's paying every month on the first, not even waiting for the grace period of 3 days and I never hear any complains. I'm not going to even rise her rent in 2 years when her lease expires.
My point is: rather than breach the lease and believe the references, maybe to see how it's going.
I know that Cali is very pro-tenant and it's hard to evict them, but it might be some angry people getting back to that tenant.
If the tenant IS late, then you will file eviction ASAP and write it off as a lesson you learn. It's part of the business - thereis no 100% warranty even about best tenants
Lots of bad advice in this thread, much of which is illegal in California, here's the deal:
You need, first and foremost, to talk to an attorney and your broker if you have one. Nobody can properly answer this without having read your lease.
However, speaking very generally - typically in California, once you sign the lease and the tenant is delivered a copy, and once the tenant delivers the agreed-upon Move-In Costs in the agreed-upon time period (typically deposit + first month's rent), that's the end of it, you're locked in, handcuffs and all. Only in the event the tenant defaults on your agreement can you even begin thinking about trying to get rid of your tenant. (Fun fact for non-CA lurkers: same goes by default for the sellers in our state's purchase contracts!)
However, while your suspicion may very well be correct, I implore you to consider the fact that the tenant has, at this point, done absolutely nothing wrong to you here. I have had experiences where the reference you called may have an ulterior motive or agenda as to dissuade you from renting to him, as I think I saw one other person mention.
If anything, it's lesson to do your diligence and wait for all diligence calls to be returned before signing a lease, ever.
For what it's worth, if you used the latest C.A.R. Residential Lease Agreement revision we just released in June, you may benefit from the protection recent language we just added in the event the tenant has not violated the lease, but was not truthful on his original application:
41. A) (...) Landlord may cancel this Agreement: (i) before occupancy begins; upon disapproval of the credit report(s), or upon discovering that information in Tenant's application is false; (ii) After commencement date, upon disapproval of an updated credit report or upon discovering that information in Tenant's application is no longer true. A negative credit report reflecting on Tenant's record may be submitted to a credit reporting agency if Tenant fails to fulfill the terms of payment and other obligations under this Agreement.
Crossing my fingers for you!
"You're locked in, handcuffs and all," huh? So they put you in jail if you breach the contract? Or do they shoot you? Do they give you a blindfold and cigarette first?
Saying "you have a binding contract" is the start of the discussion, not the end of it. Of course he has a binding contract. The question is whether it's a better move to breach it or to honor it.
I'm a Texas lawyer, not a California one, but unless there are extreme and automatic penalties for a landlord backing out of a lease this way (e.g., he would have to pay the tenant three times the entire value of the lease plus attorney's fees, something like that), then he should consider the option of breaching the lease and giving the tenant his money back. If he does that, the tenant essentially has no money damages.
(This is not legal advice and I'm not your lawyer, you person reading this.)
@Mike H. you have to prove the tenant lied on the application.
So far, just blah blah blah from people who didn't dare to tell the "truth" in his face.
Are they going to support their testimony in the court?
You need a written evidence of the lie
@Drew Shirley - Texas is very landlord friendly, while Cali is opposite.
Ohio law has more protected classes than anyone and it's not just monetary damages, he might face.
Especially if he's a licensed real estate professional or has more than 4 rentals.
There was legal case when a landlord discriminated against a tenant and through the court the landlord was forced to rent the property FOR FREE to that tenant.
I'm not implying he discriminated but if the tenant take him to the court, it will be about whose lawyer is better. I'd say if you want to breach the contract, consult the lawyer in your state or even county who practice Landlord-Tenant law.
Where I live, county within 10 min driving (where I work as an agent) consider illegal to refuse rent to section 8 tenants. If you want to, there must be legitimate reason
Best advice is to talk to a California lawyer for sure.
Let me see if I am following this. The advice from about a dozen or so people here is that he should intentionally break a legally binding contract because someone said to someone else who then said it to the landlord, that this person might in the future not pay his rent.
Here is my advice, when you plan involves breaking the law, get a new plan. You cant control his integrity, but you can control yours. Keep your word and your contract. If and when he messes up then act appropriately.
@Drew Shirley You're hilarious - no, no cigarette, just the blindfold. (My expression was mocking the binding nature of a CA lease agreement.)
You are correct, you're not a California attorney, which is evident because you operate on a healthy Texan rationale, something which California courts sorely lack thanks to our incredibly tenant-centric laws that we operate around.
If a landlord tries to breach a lease, a tenant can easily sue them and win here, any day of the week. I have seen landlords held to honor the lease whether they like it or not plus pay for any damages, pay for the tenant's attorney fees, pay fines related to not following due process in certain areas, etc... It can quickly and completely turn a property from a profitable asset into a year-long non-performing nightmare-black-hole of ROI death.
California is pretty much the last place in the world that a landlord should screw around with tenants. Your ultimate advice, to consult a CA attorney, is spot-on.
You make a good point. Something isn't adding up. The poster stated that the applicant has no rental or credit history. Yet the applicant's own reference is stating he's going to stiff him. How does the reference know if he's going to stiff him? If he stiffed a previous landlord, then the tenant would have a rental history and likely some sort of eviction on their record.
That being said, I would be extremely hesitant to move forward given the applican'ts own reference is telling him that the tenant is going to stiff him on rent.
In terms of proof. I guess thats what I was stating he would need to find. The first question asks if his application even asks the applicant the questions of whether they've had an eviction or if they've been late on the rent. My assumption was the applicant has played this game before. But in reading the original post, it looks like the applicant has no history.
So the question does become why does the applicant's own reference take the time to call the landlord and share that with him? If the applicant has done this before then why does the poster state they have no history? Something isn't making sense there.
As far advising someone to "break the law", thats nonsense. I'm suggesting they break their contract. Because quite honestly, it would be much cheaper to break the contract then it would to have to go through with it if you believe the tenant is going to stiff you on the rent and may extend the thing out for a significant portion of time. Not only will you lose out on rent and incur legal costs along the way, but there is the possibility that they may do significant damage to the property as well.
I would definitely agree with needing to see an attorney to find out what their options are in getting out of the lease. Ultimately, I'd guess it would be similar to what the landlord's options would be if the tenant were to not follow through on the lease.
Typically all the landlord could do here in Illinois is go after them for however long the property was vacant. So maybe a couple of months? And thats what he'd have to weigh. How much/long would an eviction take plus the risk of damages to the property? How much could the damages be if he breaks the lease?
I'd still rather keep that tenant out of there. Something is off. Quite honestly, the fact that they had no rental history and no credit history probably should have been an absolute No to begin with.
Just for my edification, what is the difference between breaking the law and breaking the contract. Because I was always under the impression that it was called contract law?....and civil law? And you are admitting they would have to pay damages...which is what you have to do when you break civil law...so I am confused? It still seems like you are advocating that they proactively break a valid contract (enforceable by law) based on supposition and hearsay?
I guess technically I am advising them to break the law - be it civil. But to me that phrase "breaking the law" means doing something criminal. I guess its the same advice I gave to people when their house was underwater. I told some people they were better off just walking away.
Did I advise them to "break the law" under your logic? Yes. I guess I did. They broke their contract with the bank to make the payments.
But contract law is completely different than breaking some criminal law. I'm not advising them to do something that leads them to jail. I'm advising them to do something that may limit their exposure to something that seems like a fairly shaky situation that is fraught with risk.
The key is going to be how much would a drawn out eviction cost in his area plus the damages this tenant may be able to do. Versus how much would it cost if he broke the lease contract.
Thats the decision he's going to have to make once he sees what both those numbers look like. But the fact the tenants own reference called him up and said the tenant intends to stiff him and require him to go through a drawn out eviction, that would make me think its more than likely thats what the tenant is going to do.
So if you were to tell me the tenant could get 5k for breaking the lease or an eviction could cost me 6 mos of unpaid rent (say 8k), then I'll break the lease contract and limit my risk. I'd probably offer the tenant an extra grand for an apology for breaking the lease and make up some excuse like my mother is sick and needs to move in or there's mold or something. Not saying that will work but I think it would give me a better chance.
At the end of the day, the fact this renter has no credit or rental history and his reference is calling me telling me he's going to stiff me and draw out an eviction, I don't trust the tenant one bit. And I'd rather keep possession of the home and deal with the broken lease contract than give up possession and risk the guy doing exactly what his reference said plus possibly a considerable amount more if he damages the place.
Yea. I would definitely not risk giving up possession and as long as the applicant doesn't have the keys, he doesn't have possession......