A colleague of mine owns a rental condo in St. Louis. His tenant has not paid November rent. His property management company is advising against eviction proceeding because it would take 10 years to collect repayment and they would have to leave the unit vacant for the remainder of the lease. The lease was signed in July 2017 and was for a year in length. The tenant currently has a verbal agreement to leave by December 1st.
I have never heard of the provision that landlord must keep the unit vacant if the lease is "broken" through eviction. Is this common? Any recommendations on the cash for keys/lease break agreement? The tenant paid two months rent in advance so he is technically paid through the end of December.
Something sounds suspect. Maybe the management company knows the person and since you are out of state they think they can get one over on you. You need to call a local real estate attorney and get the ball rolling because no one who rents will want the eviction on their record and Missouri is not a crazy hard place to evict. Get a new property manager if they seem suspect to you.
Your buddy appears to need a new property management company. It is totally untrue that the rental unit would have to be left vacant for the remainder of the lease. Sounds like the management company might be planning on taking off for the holiday season!
While there is a "verbal agreement" that the tenant will be leaving on December 1, there is no guarantee this will take place. What the property management SHOULD have done is initiate the eviction process following the statues for the state of Missouri. This is typically a Pay or Quit notice for not paying rent in November.
IF the agreement is that the two months rent paid in advance is to cover the rent for November AND December (and the tenant would owe for December since he/she is not supposedly vacating until December 1) then it is best if this agreement is in WRITING, not verbal. Management should get off their sorry rear ends now and begin the process of attempting to find a replacement tenant with the hoped for goal of a new lease starting in January 1st, 2018.
If a new tenant is found sooner (and a lease is started on, say December 10th) and there is no damage above normal wear and tear to the rental unit then management would need to return the difference in rent back to the original (now departed) tenant (minus any expenses for advertising the unit to get it re-rented).
The entire point is that it is totally untrue that the rental unit has to remain empty for the remainder of the lease while property management sits around doing nothing.
Tell your friend he needs to fire his management company. They should have started the pay or quit and eviction process on November 2nd when rent was not received on time.
Your friend needs to take the time to sit down and learn the regulations governing his business. Having a PM does not exclude him from having to know the laws. He is equally responsible as his PM and contributing to giving our business a bad reputation.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing