Gave away Keys too Early and Made a Mess of Things

19 Replies

Wow did I make a huge mess of things and need some advice.

Had a new tenant, filled out the application, paid the application fee passed the background check and everything was fine.  Then went into the lease signing and he of course only brings in rent for September and asks if he can bring the security deposit the next day.  I of course stupidity agree and stupidly give him the keys to the place too.  I also made a mess out of the lease as well stating on the end of it that the lease is invalid if I didn't receive the security deposit by 9/1.  So now what I have is a full signed lease, with a paragraph saying that if I didn't get the security deposit by 9/1 it is invalid, and only have money for September rent.  I have called him three times yesterday, sent him 3 texts, and have gone to the property twice but he hasn't been there.  I haven't gone in the unit but I was able to see some stuff moved in.  

What would you recommend doing?

Thanks,

Brandon

Milwaukee Wisconsin

Well I'm not sure at this point because he has the keys to the unit still and I can't get ahold of him. I have tried getting a hold of him all day yesterday and today and have got no response. I would be more than willing to even give him the September rent back at this point for him to move out since now I have a bad feeling about it all but I'm not sure how I go about it since technically our lease is invalid since I put that paragraph in and didn't receive the security deposit.

Brandon,

Well first of all let me say I've made the same mistake more than once, so as long as this is the only time you make this error you'll be ahead of me...:). With that said I am not sure what the tenet laws are in WI or the language of your lease it is hard to say for sure what can be your recourse. Today being 9/2 it may be early to get too worried, however personally if they are not responding by tomorrow, in a situation like that I would place a "notice to quit" on the door requiring that they contact me to avoid eviction. I will also say that in the past with a similar situation I have actually changed the locks to get tenets to call me. The reality is they would have to go through the same process to file a claim against you and in our state Indiana the courts and specifically or county records are pretty favorable to landlords in this kind of situation. Not sure if any of that helps...

Don't brow beat yourself too much. Have some patience too. This is Labor Day weekend. Wouldn't be surprised if you didn't hear back from the tenant until Tuesday. Banks are closed until then too, so if your tenant is going to get money out of the bank for the security deposit, they will do so after the long weekend.

Remain calm.

On Tuesday, stop by the property and talk with the tenant directly. Don't enter the unit ever without proper notice unless it's a life threatening emergency or the property is in danger. This is the first week of their tenancy, so there are likely to be a number of loose ends to take care of. The tenant is just settling in. Make sure you don't do or say anything that would ruin the relationship. Work together to sort it out.

Do not place a "Notice to Quit" on the door! Do not change the locks! Either would put this in a tail spin and reflect badly on you. Changing the locks would be illegal. Your tenant has rights of tenancy now, regardless of what you wrote about the agreement being void if the security deposit is not received. They have established residency. The courts would likely side with the tenant.

Have faith. If you properly vetted this tenant, they will probably have the security deposit money for you within the next few days.

Aim for open and honest communication. Remain professional, nice, firm and fair. Sometimes a little flexibility pays off. Aim for a win-win.

I am very upfront in all of my marketing materials on what the total move-in costs are for our apartments.  We reiterate this to applicants when we set the time for the for the rental agreement signing.   If an applicant showed up without the total required funds, it would be clear that the applicant was trying to pull a fast one, and we would immediately end the meeting.   We pro-rate the second month for mid-month move-ins.

As I am sure you have realized, never hand over the keys until you have all the move-in money.   I have had tenants borrow from family and friends to come up with the SD -- not ideal, but nice to know that they have this informal support.  Your tenant may be trying to do this right now, which is why he is not returning your calls.

Were you very clear ahead of time on the funds needed for move-in?  Did the tenant guilt you into handing over the keys during an awkward point in the meeting?   If you were clear, the tenant/applicant has stiffed you twice -- both at the lease signing and by not providing the SD by 9/1 and not returning calls.  Hopefully, this is just a miscommunication that will work itself out, if the tenant has a good credit score and a reputation worth preserving.  If you do not hear from him by Tuesday, I would assume the worse and post a notice to perform or quit, and contact my attorney.   Thank God you had the presence of mind to add that last paragraph to the lease. 

@Mike Montana @Marcia Maynard @Bettina F.

Thank you everyone for the responses.  I left a message with him on Saturday, went over to the property today and knocked on the door but it looked like he wasn't there, and left a message for him today.  Still no response as of tonight.  I guess I'm trying to be calm and firm but yet I still haven't heard anything from him and it's getting frustrating.  I've never had a tenet not contact me within 24 hours so this is definitely new (and probably won't be the last time).

I was very upfront about everything but I just wasn't thinking when I gave him the keys.   I guess my question too is since I have that paragraph that invalidates the lease, and he has paid the rent for September, would I even be able to give him a notice to perform or quit since we don't have a lease and he has paid rent for September?  

Thanks again,

Brandon

I actually applaud you for placing the clause in the lease that says if you didn't security deposit by 9/1 the lease was invalid. But the key here is what does he think he paid you for?  Did you give him a receipt specifying what the payment was for?

If he thinks he paid you security deposit you have to issue a 5-day notice.  If he thinks it is rent, you will still have go through an eviction with the court system, even if it is just unlawful retainer or a trespassing eviction.  You should call an attorney to discuss how to do it in that case.  Most attorneys will give you a quick consult to get you started on how to remove them from the premise.  Be sure to explain what his payment was for at move-in, and the lease clause.  

In the future, don't give keys without both sec dep and rent paid in full and in a verified form of payment (cash or money order) and checklists are my best friend. I have one for every major tenant transaction. 

I think @Marcia Maynard had excellent advice. I would try to get back on her path as soon as possible. Hiding out in the bushes until the tenant arrives sounds pretty creepy to me. It sounds like you are a bit too attached to the property, investments are dollars and cents, remove emotion, and to make a few bucks you got to give up some control. It's a small amount of money, let it ride Clyde; let the tenant make their move and then you make yours. Give it a week. No need to freak em out.

If it ever comes down to a new person being short on move-in funds (and you decide to give them the keys anyway), make it short on the rent part, not the deposit.  

There is no such thing as a 3-day notice to pay the deposit or vacate!  

@Elaine Gee @Steve Vaughan @Deanna McCormick @Corina Eufinger

Hi Everyone,

Here's an update for everyone.  I spoke with the tenant he was able to give me the full security deposit on 9/23.  So that's the good news.

The bad news is he hasn't paid October rent as I figured would be the case.  On 10/6 I gave him the 5 day notice in person and he seemed to not mind or care but said he would give me the rent that day after picking up his check.  No rent.  I also talked to his girlfriend hoping she would take control of the situation and I thought she would but the next couple of days he continues to say he will get me the rent but never makes it to the bank after work.  After giving him the 5 day notice in person I also went to the post office and sent the same 5 day notice in certified mail.  It was of course returned to me today because he didn't set up the mailbox.  Will this be a problem in the eviction process?  Thanks.

I guess I'm hoping he pays this month and then is late next month so I can just give him a 14 day notice and get him out of the place.  We'll see how it all shakes out tomorrow...yay for first evictions.

Thanks for the update @Brandon V.   At least with unpaid rent you can give a notice with teeth.

Here, a 3-day or 5-day has to be served by a 3rd party with no interest in the property.  It can be a professional server or anyone that is a resident and over 18, just not a friend, SO, partner etc.    I would start over and serve properly.  Handing it to them most likely won't fly.

We serve personally and then mail regular 1st class.  Also include a separate notice and mailing for 'Unknown Occupant(s)'.  Otherwise, the Sheriff will come kick out whose on the notice but not their turd friend(s) that moved in along the way. 

@Shane H. So October rent never came.  Went to the courthouse filed the eviction, learned the whole process.   Went to court I believe around October 30th and they didn't show up so I got an immediate writ to evict.  Set up the eviction date with the sheriff and movers for the following week.  Received a phone call three days later of the girlfriend crying and basically saying she had no idea, she has two kids and now with this eviction would have no where to go.  I told her the eviction is scheduled and could only be stopped if the full rent, full security deposit, all the court fees and associated fees were paid and everything was documented and signed and at least 24 hours before the eviction date.  Two days later she called again saying she was able to borrow money and put it all together, we met at US Bank and she handed over the full amount, was very sorry, and couldn't believe that her boyfriend would do this.  The eviction went through, only evicting him, I was there and able to take hold of the property again and changed the locks gave her new keys and we signed a new lease.  She later got a roommate and is currently still a tenant to this day.  

Originally posted by @Brandon V. :

@Shane H. So October rent never came.  Went to the courthouse filed the eviction, learned the whole process.   Went to court I believe around October 30th and they didn't show up so I got an immediate writ to evict.  Set up the eviction date with the sheriff and movers for the following week.  Received a phone call three days later of the girlfriend crying and basically saying she had no idea, she has two kids and now with this eviction would have no where to go.  I told her the eviction is scheduled and could only be stopped if the full rent, full security deposit, all the court fees and associated fees were paid and everything was documented and signed and at least 24 hours before the eviction date.  Two days later she called again saying she was able to borrow money and put it all together, we met at US Bank and she handed over the full amount, was very sorry, and couldn't believe that her boyfriend would do this.  The eviction went through, only evicting him, I was there and able to take hold of the property again and changed the locks gave her new keys and we signed a new lease.  She later got a roommate and is currently still a tenant to this day.  

Thanks for the update Brandon! I am blown away by how that whole thing transpired, I (and I'm probably not alone here) would NOT have continued renting to the girlfriend after reading how she reacted/handled things up to that point. That being said, I am so happy to hear that everything worked out and that she's still a tenant! It's nice to be wrong sometimes =)