Landlord cash for keys gone bad.

Landlord cash for keys gone bad.

William CollinsPro Member
Investor · Rocky Hill, CT · Member since 2013 · 373 posts · 299 votes

Here is a story of a real life issue I am currently working on. Not all landlord/investing things go right.

Setting: New Britain, Connecticut. A small city full of rentals mainly made for manufacturing plant workers housing. Most date from the 1900-1960 for construction.

In a triplex owned by my cousin and I we have a problem tenant on the third floor walk up. After December of 2018 things start going South. A mysterious relative has an issue, drawing the tenant out of state causing her not to pay on time. In Connecticut the law is that the rent is late on the 11th if due on the first. We serve her papers and she contacts us promising a catch up payment in the on the of February. We start down the process of eviction, and she registers a payment in our online Cozy portal, which bounces. She then promises to make a credit card payment which does occur and processes all the way through for just under $2000. In early March I get notice from Cozy that the charge has been disputed as fraud. Pursuing where the payment was made from and the credit card is not in the name of tenant on the lease. Cozy withdraws the money it deposited to my account and now we are sitting in the middle of March. Her electricity gets shut off and electric cords appear from the third floor going down to the basement to steal electricity from an owner outlet. We remove the cords and disable the plugs. The tenant swears it is a mix up, and go down the route of getting a lawyer enaged who recommends cash for keys. The apartment rents for $750, we offer $400 and it is taken. We meet the tenant on SUnday the 28th and we have her move out and then we change the locks.

As a horror story that one is pretty vanilla.... untilthe next day. That is when a couple with 3 children break into this 2 person apartment and claim they have been living their since November. They claim that tenant 1 sublet it to them and has robbed them off $60000. The law in CT prevents me from removing them with the cops and they become aggressive to my property manager. They also tell me that stage is now leaking from my sewer line every time they flush. They call the health department and claim that this has been happening a month. This get the city out there and they call the cops. Also a mysterious amount of trash appears (4 truckloads to be specific). So here I am sorting this out and the city calls saying they will condemn the place if not addressed by 10:00AM the next day. At this point I look like a slum Lord, not the business man I to be.

I rally the troops and I get out there clean all the crap, jet the sewer. I find out the sewer is backed up by a chunk of asphalt getting shoved inside it (wonder who did that). The city shows up with the fire marshall, health, and building department. They pictured going into world war three and in two minutes they realized the tenant number two (hereafter referred to as the squaters) are professional tenants who are trying to get a quick buck. Due to the city getting called the fire Marshall is required to make me bring the triplex to current fire code Thiswill cost me $4-5000. I now need to get the squaters out. That is $900 for an eviction, but the law says you can't evict someone who filled a health department complaint for 6 months. So let's see that will mean I am down 10x $750 in rent. 5,000 in fire upgrades and who knows what in damage at the end. Yeah that was a bad couple days.

Question for you- cash for keys the squaters or go long path on the eviction?

From a name search the squaters have been evicted 2x before. in the same town. On the note of screening. The original tenant met all of the checks,. good credit, 4x income, no evictions, no criminal record.

pay the squaters cash for keys to get moving on the repairs or evit

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y

You made 17 mistakes with the first tenant and then rewarded her with cash. She screwed you over and snuck in some squatters that are going to cost you even more. Now you are seriously considering paying them with cash?

Stop everything you are doing. Recognize that you do not know what you are doing. You've dug yourself into a hole and are trying to dig you way out.

Get the tenants out legally. While you are working on that, find a good property manager that can take over the property and turn it around. Either that or you should sell it and invest in mutual funds.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Account Closed:

    @William Collins. I would absolutely talk to an attorney. It's crazy how low some human beings will go to take advantage of a landlord. I call them slum-squatters! Please have your attorney involved, for what you do next. Time to take the gloves off!

    not sure why anyone would go run to an attorney for this.. are there not eviction services there that have flat fee evictions.. ??? in Oregon there are these services they charge about 750 bucks you send them your paper work they handle it you never hear or talk to anyone else.  or if you MUST hire an attorney for an eviction stick to the facts and the eviction you don't want to just pay an attorney to listen to your tales of whoa 

  • Long Island NY · Member since 2019 · 133 posts · 104 votes
    7y

    Man, I Had similar things happen to me in an OOS rental. It's crazy how some people will stoop so low. 

    Even in NY, even with a Big REO Bank owned foreclosure, they paid a Squatter $7500 to vacate on a house that they were auctioning off.

    You are probably going to have to evict them legally or call a "few guys" from Bridgeport to "speak with them" 

    This sucks, but when it's over you will be better for it. 

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    7y

    Explore your rights declaring them a trespasser.  Call your Sheriff dept.

    Our state is very pro-tenant but we have good owner protections from squatters.

    Sorry you are facing this.  I had one in Feb.  Went to serve the loser for late rent and a new loser answered.  Gave them 30 mins to leave and sent him to the curb.  Don't do that, but do see if you can do something about trespassers.  Good luck! 

  • Rental Property Investor · Orlando, FL · Member since 2016 · 22 posts · 17 votes
    7y

    Gotta love the liberal renter friendly laws in the NE.  No wonder everybody is moving. 

  • Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
    7y
    Originally posted by @Jaysen Medhurst:

    @William Collins, I'm not sure why they have a claim to the apartment? Does your lease allow sub-lets? Do they have a copy of the "sub lease?" Does your lease require that all adults living there are on the lease? If so, the "subs" aren't on the lease and I'd think that means they can't legally make a claim to the apartment.

    How are the "subs" making any claims to the apartment?

    I'm sure you just want this behind you, but you should go after them with all you can. The only way this stops is by making it WAY more painful for them to do this crap then what they get out of it.

    @Edward Schenkel, any thoughts? This is some BS.

     I had that kind of thing happen recently. They even had a forged Lease Agreement signed by someone who doesn't exist and lives at an address that also doesn't exist. The phone number is fake. 

    This is how I took care of it:

  • Investor · Parrish, FL · Member since 2014 · 120 posts · 115 votes
    7y

    @William Collins That's a horrible story and bad experience. I hope you get it resolved easily from this point on.

    I've always wondered when people only invest where they live. If it's not a landlord friendly state like Connecticut, why invest there? I understand it's not easy being an put of state owner but it would be easier with property management in place, landlord friendly state, and less to deal with.

    I live in a landlord friendly state and invest in Arizona, but looking to invest in Florida, which is also landlord friendly. Just asking but what's the appeal of investing in your backyard if the state laws allow stuff like this?

    Just my opinion anyway. Best of luck resolving this and please keep us up to date.

  • Hamilton, NJ · Member since 2019 · 78 posts · 15 votes
    7y

    I'm reading this and shaking my head. Shame on them for abusing the system and getting away with not paying rent.

  • Real Estate Agent · Houston, TX · Member since 2017 · 292 posts · 233 votes
    7y

    OP , thanks for sharing your story .  This is a hot mess indeed.  What's done is done, your past mistakes can't be taken back. 

    But I think you should heed the advice from previous posts and get SERIOUS about the law and get your property back properly.  Best of luck. 

  • torrington Connecticut · Member since 2018 · 11 posts · 2 votes
    7y

    @William Collins  I relayed your story to a friend of mine this morning. He owns 14 units in Connecticut and also works for the Ct state marshals office.  He said that any halfway decent lawyer should able to get them out.

  • Great Falls, MT · Member since 2017 · 97 posts · 172 votes
    7y

    @Kyler Cook

    Ha ha...I’m glad I’m not the only one with anger issues!

    I wouldn’t pay them a dime and I’d make their life HELL (all legally of course).

    For starters, I would install security cameras everywhere. Low life’s like this are doing more wrong than just squatting. Watch their every move and report to police for everything.

    I also guarantee they are bad parents....make a DFS report so they have some social workers in their life.

    Find out where they work and start calling for payment...several times a day...making sure to tell anyone who answers the phone what they are doing. Although they probably don’t work.

    I’d do as many walk-through as the law allows. In my state I only have to give 24hrs notice. I’d go in every.single.day. and then give 24hrs for my inspection the following day.

    Take pictures of everything while you are there.

    I’d suddenly need to do a lot of maintenance....just to get in more often.

    I’d stand outside their bedroom with a bull horn every morning....at 4am.

    Post their photos on every social media site, Craigslist, Rentals FB pages letting the world know who they are.

    They are probably receiving some sort of government assistance, so call and report them for fraud....I guarantee they are reporting they pay rent.

    Post signs in the yard stating that they are illegally squatting in your property.

    Id suddenly be landscaping the yard. I hang out with the hose “watering” then accidentally spray them when they walk out and try to get in their car. Hopefully they punch me; then I can press assault charges.

    I love the idea of hiring kids to throw eggs at them....

    I’m just getting started. I have no room for such pieces of crap. I don’t care about money- I’d make them pay. It would be my new favorite hobby.

  • Denver, CO · Member since 2018 · 29 posts · 21 votes
    7y

    My 2 cents:

    1) Smart locks: These do not require physical key. You just enter a secret code using keypad. Admin (landlord) can assign upto around 10 codes at a time (Im thinking common door here). You can also remotely revoke codes for these locks and create temporary access codes (say 24 hours, because a delivery guy needs to drop something and needs access). Look at Schalge, Kwikset etc They cost about 180-250 dollars but offer the convenience of never ever having to change locks again. You can also have them sent you alert every time someone access these locks, you could enable this setting for empty property so you get alert as soon as squatter is in.

    2) Security cameras: Make sure you buy the ones that upload stuff on Internet and have motion detection at least and offer upto 30 days video history (or you can create a setup to download video history from Internet to your personal local drive. If the cameras have facial detection as well thats even better

    With above 2 setup you will have video proof that they were not living there before and they basically DONT have any tenant rights

  • Denver, CO · Member since 2018 · 29 posts · 21 votes
    7y

    Also, the above setup will cost only about:

    1) Smart locks = 180 -250

    2) Good security system: about 1000 dollars

    So less than 1500 dollars, one time capital expense and can save you 750 x 6

    Also, have you considered using Zelle for rent collection? Its almost like digital check, once money is in your account theres nobody taking it away from you. Also, you can further bullet proof it by accepting money using Zelle in one bank account (lets say Chase) and once the money shows up in your Chase account move it to your REAL account (lets say WellsFargo), that ways you keep the account that originally received the money almost empty. What that would mean is taking money back by Zelle or Chase in this example would not be a straight forward process for them because there is nothing to take away. If they then want to take you to small claims court etc so be it, they will also lose time and the onus to prove fraud will be on them.

  • William CollinsPro Member
    OP
    Investor · Rocky Hill, CT · Member since 2013 · 373 posts · 299 votes
    7y

    I did contact a lawyer to start formal eviction on the same day I asked the question. I was really looking for opinions on which paths people would take.  @Rohit Verma The lock swap out really needs the doors to be a better grade. Note this was the first of 12 small multi's I have worked on- and definitely not to the same level of upgrades I did on the next apartments.  @Charles D Marrow  the lawyer I am working with now - I am confident will get them out. It is just a matter of time. @James De Stefano  The law was followed for a known tenant and the apartment was totally vacant... Squater protection being put in place is always fun. @Greg Junge  I am working with my cousin on these and once we get our current properties online expansion will be bigger multi's in more landlord friendly states. @Account Closed In our state for eviction on a property in an llc- the law states you need an attorney. 

  • Rental Property Investor · Los Angeles, CA · Member since 2016 · 137 posts · 80 votes
    7y

    @William Collins as a fellow landlord this is close to if not the worst tenet landlord story I have ever heard off but thank you for sharing.

    I would follow up with the lawyer you hired and do what the cops said evict them fast.

    Do not reward them with cash. If fact I would spend money and see if some “guys” “talked” to these squatters and they might leave.

    Also if the previous tenet subleased this unit to these squatters. The previous tenet could have also subleased it to another “squatter” “roommate” that doesn’t get along with the ones you have now. I remember in college sometimes roommates don’t get a long and moved out. I suppose the “squatter roommate” would be just as legal as your current squatters if that was the same “sublease”

  • Design | Build · Milwaukee, WI · Member since 2014 · 107 posts · 35 votes
    7y

    @William Collins

    Hate to say it. Bullets are cheap these days.

  • Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
    7y
    Originally posted by @William Collins:

    I did contact a lawyer to start formal eviction on the same day I asked the question. I was really looking for opinions on which paths people would take.  @Rohit Verma The lock swap out really needs the doors to be a better grade. Note this was the first of 12 small multi's I have worked on- and definitely not to the same level of upgrades I did on the next apartments.  @Charles D Marrow  the lawyer I am working with now - I am confident will get them out. It is just a matter of time. @James De Stefano  The law was followed for a known tenant and the apartment was totally vacant... Squater protection being put in place is always fun. @Greg Junge  I am working with my cousin on these and once we get our current properties online expansion will be bigger multi's in more landlord friendly states. @Account Closed  The cops that were there commented "evict them fast".  @Steve Vaughan  just in a pro- tenant state right now. @Jay Hinrichs In our state for eviction on a property in an llc- the law states you need an attorney. 

    Here's the Quick Tip: You call 911, and say "someone has broken into my house and I think they are still in there, I don't feel safe going in". If you say that to 911 it's an arrest, say anything else and it's an eviction. The cops come, in force, and ask the squatters for a lease and who let them in. You say you didn't give them a lease and they broke in. If you aren't there when the police arrive, it is treated as though they are renters because the police don't have your side of the story. If you are there and say "I don't know who they are and they don't have authorization to be inside, I want them prosecuted". The police take action, they are arrested and no eviction is needed. Now, go claim your property or get into investing in mutual funds as someone previously stated. Whimpering is not a way to run real estate.

  • Jonesboro, GA · Member since 2016 · 14 posts · 2 votes
    7y

    @Nathan G. 17 mistakes? No, just one Big one. He didn’t aggressively evict her from December. Shouldn’t except the sob stories. It will bite you every time. I learned that from Brian Murray “Crushing it” in Apartments and Commercial Real Estate.

  • Rental Property Investor · Central, FL · Member since 2016 · 950 posts · 821 votes
    7y
    Originally posted by @William Collins:

    I did contact a lawyer to start formal eviction on the same day I asked the question. I was really looking for opinions on which paths people would take.  @Rohit Verma The lock swap out really needs the doors to be a better grade. Note this was the first of 12 small multi's I have worked on- and definitely not to the same level of upgrades I did on the next apartments.  @Charles D Marrow  the lawyer I am working with now - I am confident will get them out. It is just a matter of time. @James De Stefano  The law was followed for a known tenant and the apartment was totally vacant... Squater protection being put in place is always fun. @Greg Junge  I am working with my cousin on these and once we get our current properties online expansion will be bigger multi's in more landlord friendly states. @Account Closed In our state for eviction on a property in an llc- the law states you need an attorney. 

    Just a thought for next time.  The second someone clears out of a unit either for eviction/cash for keys/end of lease.  I immediately walk thru with a video camera (iPhone) time stamp and date it and say who left that no one remains going thru each room. Heck do proof of life and show a dated newspaper or speak of a current event that happened to ensure it is that date. 

    If you had that video and showed it to the cops they would be forced to arrest them and remove them for trespassing.  

    Live and learn.  (I had an evocation right out the gate and learned tons the hard way too)

  • Rental Property Investor · Miami Springs, FL · Member since 2016 · 25 posts · 11 votes
    7y

    @William Collins this is were you hire a hitman

  • Specialist · New Cumberland · Member since 2019 · 5 posts · 3 votes
    7y

    @William Collins wow that snowballed quickly. Sorry for the misfortune. Sounds like the laws in Connecticut are not in the landlords favor at all which tends to open the door to professional tenants.

  • Johnson City, TN · Member since 2017 · 209 posts · 367 votes
    7y

    Usually the coroner will remove the bodies fairly quickly.

  • Real Estate Broker · Chicago, IL · Member since 2016 · 52 posts · 25 votes
    7y

    @William Collins Evict!  These squatters know the law, the game the system.  Better to have the law on your side.

  • Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Joe Splitrock. You get what you pay for with cozy, since it’s free you will have issues. I’ve seen so many threads about tenants paying with a credit card, then claiming fraud through cozy and then cozy pulls the payment.

    They can’t do that with a PM who takes money orders and certified cash.

    I will likely never use cozy for this reason until they fix this

  • Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
    7y

    @Mike M., this warms my heart.

  • Steve RozenbergPro Member
    Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @William Collins

    Man that is one for the books, I have had similar type horror stories in the past.. the one thing I have learned is that the more I stick to policies and procedures the better I am. If this goes off the rails like this again I would get legal counsel involved and let them take it from here. No reason you should try to become an expert and deal with this type of issue on your own and guess if you are correct or not.

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