My wife and I are house hacking in Burbank, CA and have run into an unusual situation with a tenant that we're not sure how to handle. He and his family have been renting from us for two years without issue, their lease having rolled into a month-to-month agreement after the first year. In that time rents in the area have increased significantly, so in June we gave him a 60-day notice that rent will be increasing and we will be asking them to re-sign a 1-year lease (our feeling being that switching to annual leases will allow us to better automate annual rent adjustments and provide us some assurance that we won't be looking for tenants in the winter months). We told them that they could think it over but we needed an answer no later than 7/15.
Unfortunately, (or perhaps, as expected) we are now past the 7/15 deadline and they still have not responded with a clear decision. We are contacting them daily explaining that they either need to sign the new lease or make clear their intentions to vacate, but they are still delaying. My concern is that we will hit the end of the lease with no signed lease and no clear idea how to proceed.
So I'm opening it up to the group here. How should we best proceed going forward? What could I have done better to prevent this ambiguity? Any help or suggestions would be appreciated. Thanks!
Send them a move-out notice immediately because they don’t response, means they are moving out.
It will scare them to contact you immediately if they plan to stay.
It won’t scare them if they really have the intention of moving out.
If they plan to move out, that’s fine.
After they move out, raise the rent to market price and find a new tenant.
@Christopher L. I would stop contacting him daily that seems excessive and if I was the tenant I would be annoyed.
I am going to assume you gave 60 day notice June 1, which means he has until the end of July, which is still almost 2 weeks away.
I wouldn’t contact him until the end of the month. Then after that if they’re still there, ask for August rent. At which point if they don’t pay, file for eviction.
I believe you’re in a tenant friendly state so that may not be ideal. Where I invest you can evict tenants in 4 weeks for non-payment of rent
Originally posted by @Caleb Heimsoth :
Christopher L. I would stop contacting him daily that seems excessive and if I was the tenant I would be annoyed.
I should clarify that I've been contacting him daily since the 7/15 deadline we gave him, not daily since June.
What did the notice say if they did not respond by the deadline?
@Christopher L. well that’s better I guess but I still would stop that. Wait til next week at the earliest
@Matt K. The notice only asked them to respond by that date so we would have ample warning if they intended to vacate, I can see now I should have indicated what would happen with no response.
Well, they owe you 30 day notice and you'd owe them 60 day notice for move out. What's probably going to happen is they send you the normal amount on the 1st and you send the pay or quit and then if you have to eviction.
Or they move out.... but the more you contact them the more they're less likely to respond. I'd consult an attorney but maybe you can say something that since they failed to agree to the new terms/rate they will need to move out by... whatever the date is.
I had a very similar situation, so have refined the process to tighten things up.
Here's a copy of the letter I sent to my tenant. As a house hacker, I would hand deliver AND send by certified mail, so they know you mean business.
On (date) I sent you a lease addendum for a monthly rent increase of $50.00 for your rental unit, effective August 1, 2018. I asked that you sign and return the included Lease Addendum by July 15. We have not yet received the returned document from you.
I realize that you’ve probably forgotten or you’ve been busy, so I’m sending you another copy to sign and return to me at the address in the letterhead above.
We must receive this signed Lease Addendum by July 25. In failing to do so, I will assume the new rent amount is unacceptable to you and your tenancy will be terminated.
As always, I am happy to answer any questions you may have – so please feel free to reach out if you have any concerns.
Thank you for your prompt attention to this matter.
When I used to do non-month to month leases, when the lease expired (after the year term or whatever is up), it switches to a month to month lease. You might want to add that to your leases.
If they pay the increased amount on the first, all is good, right?
If they plan to move, they owe you a 30 day notice. If they’ve been good tenants for two years, just sit tight and see if the extra dough shows up in the rent check.
Put him on a month to month and raise the rent even more...
@Christopher L. when I do a renewal I give three options. One price for signing a year least and a higher price for going month to month. If they do not sign the lease, they go month to month at $50 more per month. That gives a "no response" option that puts a few more bucks in your pocket. The third option is give written notice and leave.
I don't tolerate people ignoring me. That is a problem. Do what @Caleb Heimsoth suggested at this point.
I'm a little unclear - you notified them that rent was going up in 60 days and asked them to sign a new lease. At that same time, did you give them a 60 day notice to vacate if they didn't sign a new lease? If not, then you should look at your lease and see how much notice you need to give them to move, and then decide if you want new tenants or not. Otherwise, you should expect to get the higher rent if they are on a month to month (most leases have this provision) and deliver a pay or quit if they fail to pay the higher rent.
Knock on the door with the paper in hand when they are home. If they won't sign it right there, hand them notice to vacate then mail another copy certified mail with the rent increase/lease addendum.