Stressed: Non-paying pro tenant suing for everythingg.
CA · Member since 2019 · 7 posts · 4 votes
Hi guys,
Newer sfh investor. Started eviction after non payments. After the delays in court date process. It's month 4 no payment. Now they repeatedly threatened with a lawyers demand letter inhabitable health issues for mold and other issues. They shut down phones and emails.
From the PM and us. Every repair has been taken care of and documented. Definitely stressed about it. Called insurance and they aren't sure about mold coverage liability. Calling insurance might have been a mistake also since it's only a threat.
Should I get my own lawyer and proceed? I'm stuck in a tough situation. Need some help.
You must have specific philosophies you adhere to to run any business and to keep yourself in-check and safe from a nervous breakdown. Before you start your a business you need to set yourself up with a mind-set, business plan and business model that protects yourself both financially so you make better profits and protect yourself from not wanting to run a very profitable business. Yes! Being a landlord is really a serious business and should not be looked at like it is something that does not need any thought in regards to how you will react and what you will do when you have tenant problems.
This is how it works. You knew that tenants can be problems and drive you insane when they tear up your property and don't pay the rent. The day I put my first multi-unit property in escrow I make a promise to myself that I would never let a tenant get me emotionally upset. I told myself that running a rental property business was exactly the same as running a gas station, liquor store, or any other type of business and every type business has inherent problems that can drive most people crazy.
So, I closed escrow on my first 28-unit building, called in my bulldozer operator, knocked down the entrance doors to the courtyard, ripped out the trees, stairs, concrete sidewalks and swimming pool. The tenants were so angry about the mess one tenant spit in my face and wanted to fight. I am quite a hothead myself and this tenant was a wimpy 4-/1/2 foot 85 pound Asian, but I actually smiled and asked the tenant when he was going to move. My wife and workers could not believe I was so cool and was smiling and they asked me why. I said it was because I made that promise to myself, ahead of time, and because when a tenant moves I make an instant $36,000 profit by increasing the rents.
I also set up a business plan with operating policies to keep from going insane. Whenever you want to evict a tenant, or any time you have a tenant with a trash mouth you do not every say one word to that tenant. The only want you can communicate is in writing. This way you don't antagonize each other and you don't put yourself in a situation where you have to argue in court about what happened.
When I write a letter and make a demand I do not give tenants the idea that they can negotiate and drag out the eviction. I spell out exactly what their deadline, when I will file with an attorney and that they will be liable for all the costs.
Then, even though you are taking a loss, turn your eviction over to an attorney and bear the costs because if you don't get an attorney very quickly you are injuring yourself. I've evicted about 40 tenants and almost every one takes exactly 7 weeks and costs about $650. That is not bad at all when you should have at least a one-month security deposit. So, maybe you lose 1 month rent plus attorney costs. As for mold and all the other garbage, any judge should understand that you have the 'tenant from hell' and tenant's claim is only a ploy to remain in the rental unit he is not paying rent for.
I've has several tenants bring up the issue about mold in their apartment. The first thing I tell a tenant is that if they even suspect there is a mold problem they cannot remain in the unit for even one more night, or they do so at their own risk. Then this is my procedure.
1) I immediately give the tenant a notice to vacate the apartment, immediately, or they remain at their own risk.
2) The second thing I do is I give the tenant a 24-hour notice telling them that we are entering their apartment, with or without them being present, and I have the apartment tested for mold. The cost for the test is about $500, but the peace-of-mind and knowing that I am acting for the best interest of the tenant is well-worth $500.
3) Usually, the only mold you find in rental properties is penicillium found on bathtub walls and in showers. This mold is caused by the tenants when they don't clean the walls and grout. I send a letter telling tenants that there was no mold in the bathroom when they moved in and mold growth was caused due to their failure to keep their bathroom clean.
4) I evict every tenant who even mentions the word 'mold' because sooner or later you will have problems with this type mentality. I had one tenant who lived in an apartment for only a few weeks and he said his nose was bleeding due to mold in the apartment. I spent $20,000 remodeling the entire apartment just before he moved in. The day the tenant told me he was sick from the mold I told him that he could not stay in the apartment for one more night. We argued for about 3 hours and finally I convinced him to move into another apartment on the same property before the end of the day. I moved him within a few hours on a Saturday and I evicted him from that apartment on Monday morning. Then, I paid a mold testing company to test the apartment just in case the tenant sued me.
For the landlords who don't have the proper business plan and mind-set the loss is much greater and these landlords hate owning rental properties. Then, it is all downhill from there.
Haven't seen the words Cash for Keys in this thread anywhere. Clearly if they believe they're being exposed to mold, they would be best served by moving out immediately -- what kind of help do they need from you for that to happen, and would they be willing to waive all claims in exchange? Yes, that kind of payoff is exactly what they're looking for, but how much do they want exactly, and how does that compare to the lost income and to the $300 / hour that you're about to start paying an attorney?
@Carrie K. Run a tenant screen online(rentprep, etc) that gives you background and eviction search
@Jack Lauer I had bad luck with a POS tenant that my PM placed in one of my places. I found it helpful to do a background search and find the previous landlord he screwed over and talk to them. It helped put my mind at ease and gave me an idea of what his MO was & what outcome I could probably expect.
Might be something you can try? And if it does go to court it would only help your case if you can prove he has a history of doing this to others. In the state of Missouri there's a website called Casenet where you can look up all the court cases against someone for free down to a parking ticket. Not sure if they have something similar in CA where you could look up lawsuits filed against him? I'm guessing your not the first person he's screwed over and he probably has wronged some other people too.
They claim it's uninhabitable, yet they still stay in the dwelling. Isn't that some Bull poop.
@Mike Franco I've been in property management for years and tenants have always tried to pull the mold card. No case has ever won due to mold. Yes, you are responsible to make it habitable. Which means heat, running water and electricity.
Insurance has nothing to do with eviction, it has to do with repairs.
@Carrie K. Run a tenant screen online(rentprep, etc) that gives you background and eviction search
I will give you an idea regarding the number of lawsuits filed by tenants against the property owner. ZERO! I have owner more than 140 rental units including homes and apartment buildings and started 50 years ago. Not a bad record for lawsuits. The worse i ever had is it took 3 months to go through the court process to get the sheriff to go to the property and lock out the tenant.
The most money i ever lost on a rental unit regarding the loss of rent was $8,000 and this happened two times in 50 years. Sometimes, you get a tenant who knows how to get a judge to keep giving them a new court date. I had one where a Korean woman spoke perfect English during the first court appearance and the judge asked her if she understood English and needed a translator. She said, "no" and then appealed the court's decision stating she had seven days to move by claiming she did not understand English. Then, she went to court a 2nd time without a translator.
I love the rental business because I have good philosophies that make the business fun and I develop all my own computer software that makes the business simple to run. Sometime next week, I am going to put a link on this forum with a video explaining what my software does and I give the software for free providing I don't get banned due to suspicion that I am trying to sell a service.
I am always looking for individuals who would like to come to my office and start a club where we can work together as a team to help people get started in the business and for the experienced investors actually work together putting large deal together. My office is in Gardena California, 11 miles south of downtown Los Angeles and 11 miles from the Los Angeles airport. My club is going to be a 24/7 club with no specific times members can come. I am going to dedicate one room with all the software and equipment where members can come any time to do their data mining, send direct mail, emails, crunch numbers and help each other by voicing opinions.
@Jack Orthman Count me in, Thanks