To those inheriting tenants, don't make this rookie mistake!

35 Replies

Hi BP! I wanted to share my rookie mistake. We have purchased two SFH with inherited tenants. The first was in February and the second this past month. While we were closing on the second rental, we did a new lease for the first rental and know that lease inside and out. Upon inheriting the second tenant, she called and let me know that there was a roach and mice problem in the house. I told her I would take care of that right away. I also told her we would be maintaining the lawn. I got a feeling to check the lease after telling her these things and found that the lease she signed says she is responsible for lawn and for pest control! That's a savings of $120 per month!! So I had to go back and explain this to the tenant. Definitely a learning experience. Don't assume all leases are the same in terms of what the tenants are responsible for! Read them fully before answering any questions on them. Hope this helps someone :)

@Elenis C. So question, are you enforcing the lease from the prior property owner or property management company? If so, is it legally enforceable or do the tenant need to sign a new lease with you?

@Natelya G. We have to abide by the lease that the tenant already signed. Once their lease is up, we have them renew with our own lease.

@Elenis C.

I am a DIY investor and a home improvement contractor, and that affects how I would have handled this, but I think I have some insights that can help you and other reading this thread.

While we also transfer lawn care duties to our tenants, we're always ready to swoop in with out own equipment if the yard goes to pot. You need to be able to do this because if the tenant abandons the lawn care duties, the municipality will write the landlord up, too. And sometimes the tenant just doesn't have the equipment to really take care of issues that just keep getting worse. We maintain a gas trimmer, a gas mower, a chainsaw, loppers, a brush saw, a pole saw, a gas chipper, and weedkiller concentrate and sprayer for these eventualities. These tools are also extremely helpful in our acquisitions business and live-in flipping, but we acquired them for the rentals, so we can write off the expense of buying and keeping them up on our taxes. If your case, if you decide to be hands-off for this, you should always keep a full-service lawn care/tree care company's number in your phone.

Here's the most important thing I can tell you: never, ever, ever transfer insect and vermin control duties to the tenant. There are plenty of tenants who are perfectly happy to live with roaches and rats if they need to pay to get rid of them, and don't see a need to make much of a fuss about it to their landlord. But vermin represent a health hazard and the onus is always on you, the landlord, to provide a safe environment. If a rat comes out and bites a child visiting your tenant's kids in your rental, guess who's going to get sued?

But that's not as important as the fact that termites, carpenter ants, mice, and rats can also do significant damage to a home. Rats are the worst in my opinion, because they love to chew on electric cables to keep their teeth sharp. That's one way electrical fires start. When I learn about a rat problem in one of my properties, Judgment Day descends on the rats. I go after them by any means necessary until I am absolutely positive they're gone. In your case, again if you decide to hire it out now or in the future, it would be wise to keep the most reputable pest control people that you can find in your area in your phone as well. They are incredibly cheap for the security they provide.

Good luck, Elenis.

Thanks for the tips @Jim K. !! We do the lawn for our other property and will probably continue to offer this once these tenants move out and we sign a new lease. I see your point on the pest control. We do pest control for the other property as well. The tenant in the problem property has a baby and wants the roaches gone. I got her quotes and had the company call her to schedule an appt. She will pay for that. We also have termites which the lease states is our problem. Of course I would pay for termites either way because it's a huge problem. But I do see your point about some people being fine living with roaches and rats. Good thing to keep in mind. Thanks for the tip!!

Sfh I’d make them do lawn care . A multifamily I’d do it ~or possibly if you had a good long term tenant I’d have them do it in a multi if they were there for years and the responsible type  . As Jim said pest control is one of those things you better do as the landlord or it’ll come back to bite you ( pun intended ) I cringe when I see posts on how landlords  pat themselves on the back for having the lease state the tenant is fully responsible for pest control .bad idea ! That iron clad lease doesn’t mean the tenant will do anything written in it . Renters are renters for a reason and it’s usually due to financial illiteracy and poor decisions  .The main issue is surprisingly many people will ultimately decide to simply live with bed bugs or roaches when they realize they are the ones on the hook to pay the orkin man 400$ to come out to the property . If you have a multifamily it’s justva matter of time before the whole building is infested if left untreated and the other tenants are moving out due to poor living conditions . Not worth the trouble .. oddly enough there’s another trend I see new investors post up that seems to be a reoccurring theme as of lately , and that is closing on the property and not getting the deposits from the seller at the closing .folks you need to get the keys ,the leases ,and all the deposits at closing ! Not later . Once you sign that agreement the sellers off the hook!  ::LISTEN:: do not  walk away from that closing table without those items in your hand 

@Elenis C. Great post, we deal with this crap every day when we buy new properties and inherit tenants!  

As a high volume turnkey seller, we've dealt with this crap more than we care to remember LOL.

Good lessons for sure!  

If you inspect your properties on a fairly regular basis. Which you should....then you can easily catch tenants that don't keep up with landscaping duties and pest issues, When you do catch them, you require them to take care of the issue....professional pest control only..... or you take care of it and send them the bill. Stated in my lease.

If you can make the numbers work and provide these services directly, then that's the best scenario.

Similar to this, another thing I learned... if an inherited tenant is on a month-to-month lease, instead of having them sign a new lease I wait a month to see if they're a tenant I want to keep. If they are I write up a new lease. 

@Elenis C. I will take it a step further and say you messed up prior to purchasing. Your offer to purchase should include a requirement that they provide all documentation and agree to sign an estoppel certificate (also called estoppel form or agreement). The estoppel certificate is a form filled out by the tenant and then confirmed by the Landlord. It's supposed to ensure there are no surprises after closing. For example, you buy the place and the tenant could claim the Seller allowed them to paint the walls black or that their security deposit was twice what the Seller claimed. How will you know? An estoppel certificate fixes this problem.

Some things it may include:

1. Tenant name, contact information, and address

2. Occupancy date

3. Is there a written lease? If so, review it to ensure it matches the estoppel certificate

4. Are there any modifications to the written lease?

5. Are there any verbal agreements or arrangements between the current Landlord and Tenant?

6. Current lease term (expiration date, month-to-month)

7. Current rent rate

8. Rent due date

9. Security deposit amount

You can find plenty of examples by searching for "tenant estoppel certificate doc" or exchange "doc" with "pdf" for more options.

Here is an example and explanation:

Some have a lot of legal jargon but this document does not need to be so detailed. This is an important tool for anyone buying a tenant-occupied property.

Originally posted by @Karl B. :

Similar to this, another thing I learned... if an inherited tenant is on a month-to-month lease, instead of having them sign a new lease I wait a month to see if they're a tenant I want to keep. If they are I write up a new lease. 

 I recommend you keep them on a month-to-month lease for six months before making the decision. They could pay on time the first month and then completely fall apart after signing the new lease.

@Elenis C. I just wanted to drop a quick comment to thank you for starting this thread. Your post and those who added to it have really given me food for thought on how I’ve been running my rentals.

My dad had a couple of pads for Mobile Homes on his acreage. When he passed I inherited his tenants. One guy had dogs. I knew there were several. One day he moves out and leaves 23 dogs. The dog warden caught 22 of them and one would always run away. 

I’m left with a trailer I can’t give away and 23 dang dogs. 

@Elenis C. ,

Don't break out the champagne yet.   

You inherited the house, and upon them learning they got a new landlord-- they reported a mice/roach problem.   That tells me, you likely have a HUGE pest problem, and they have probably been reporting it for years and were hoping you'd take actually  care of it.     I'm 100% with @Jim K. , and think he nailed it on the head!  Roaches are absolutely disgusting and will breed and take over a home  (they likely already have), and mice--- mice will chew on wires, electricians are expensive!    I say, eat the $$$  (it's 100% tax deductible) and hire an exterminator, and go there and caulk every area you can.     I'm sure the prior landlord showed them per the lease they had to pay for it, and haven't, so I just can't see them happily paying $$$ for an exterminator. 

Bugs are the #1 reason I hear of people getting evictions and refusing to pay rent, obviously it's bad on the tenant, but it's very common.

I guess the question you have to ask yourself, is do you want to deal with the roaches/mice issue with the current tenant, or the next one, that will probably be livid that you didn't disclose bug problems?    I'd pick the current one.

@Elenis C. We always took care of the front lawn of the SFR, so we'd know it was always cared for and looked good. All the tenants needed to do was pay the water bill and not mess with the sprinkler timing. We never had a pest problem, but if we did, we'd certainly nip it ASAP.

@Dennis M. Totally get your point on the pest control! Lawn care I figured they would live with long grass and let the property go. Especially in one of my SFH I have college students in there and I highly doubt they will be all into getting the grass cut. Anyway, about the pest control, if a person is okay living with roaches what if they never even tell you about the roaches? I guess that can happen too but I know it's more likely to happen if they have to pay for it.

@Ned J. I am currently an out of state landlord but once we move closer in the next few years, I'd definitely go around and check on the properties on a regular basis. How would you pick up pest issues from a drive by? You'd ask to come inside?

@Nathan G. Thanks for the reply. I actually did ask them to fill that out and got it back. I made that mistake with the first inherited tenant and wasn't going to make the same mistake again. But I just didn't review the lease fully for maintenance issues and who would pay for what so I assumed I had to do lawn and pest in this case when I didn't.

@Elenis C. ....if you self manage from out of state it is can always hire someone...even a handyman or local agent to walk the inside and outside of the property every 4-6 months...both inside and outside. Don't make the mistake of ignoring your investment for years on end only to have huge surprises when you have turnover. Be proactive. I do mine.. which are more local.... at least every 6 months. I tell the tenant its a routine maintenance inspection to look for issues I need to take care of...end of year ....change the HVAC filters.....etc. Gives me a chance to really know the condition of the property before I get some huge surprise that its a disaster

If you have a PM, I would make it a requirement that they do routine inspection

LOTS of landlords do a "set and forget" approach and then are shocked at how horrible the place is when they get a turnover or some issue comes up and they go to see their investment

@Linda S. I agree now that everyone made their comments on the fact that not every tenant will be willing to pay to get rid of roaches and bugs. Super good points!

I just called the pest company as I had gotten quotes and sent her the info. They stated she set up a service to go out there 3 times to get rid of the roaches, they are german roaches and multiply heavily, and also set up a quarterly service after that. The tenant had told the previous owner and he did not take care of it. She had also told him about an electrical problem that the power company was posting notices about it and he did not take care of it either. I guess the old owner was just waiting it out till the property was sold and he didn't have to pay for these things. The tenant has a 13 month old baby and sounds like a responsible mother that doesn't want roaches or mice around her child. Luckily!

I'll for sure follow up with the pest company after the set appointment to make sure they went out there and took care of the problem. Thank you guys for all the input! Now I know to not always trust that the tenants won't pay for bugs and I'll check to make sure it was done or I'll do it myself and then bill them for it.

@Rochelle G. I always learn so much from posting something or from replying to someone else's post! BP is awesome  :)

@Elenis C. I do not care if you add pest control or not, people in rentals are still going to live the way they were raised. In every property I have ever owned, people leave out food and it attracts ants. How do you tell people in a lease to not be SO STUPID and put up their food or clean up their messes? You cannot. People are renting for a reason, don't try and get them to be "better" people, they will never change. 

I put a clause in that states they are on the hook for the first $50 of any contractor fee, so they can call the pest control or other, but they are on the hook for part of the expense. They made the mess, they need to be responsible for cleaning it up. In every property once the food was removed and property cleaned, rodents and bugs went away......amazing how that works! 

@Jack Bobeck This is particularly true for families with children. Mom and Dad might clean up their own messes, but they can't watch Junior non-stop. Do you remember when you were a kid, and hiding those nasty vegetables? Well you might fool Mom for a while, but you won't fool the bugs!

@Elenis C. ,

Sounds like you got a unicorn tenant that really sees the home as long term!   Make sure you keep her happy and she'll probably be there for a long time! 

The best advice I got regarding rental properties  is to "be the best landlord you can be, fix things quickly, communicate quickly-- return security deposits ASAP-- people hate moving so give them no reason to move. "

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