About to buy a house and tenants have not paid rent to old owners

7 Replies

I'm closing on a house in a couple weeks and it is currently occupied with renters who have not paid for months. The current owner will not evict them. After I sign on the house what can I do? Do I have to give them time to see if they will start paying me? Can I evict immediately? Not sure what to do, I'm new to this with my first house closed on this May.

@Josh Fralish   It may be too late to amend the contract, but you should have stated that the house must be vacant upon possession.  At this point, the current owner probably doesn't care as they are passing the problem on to you.   Make sure you get the deposit from the landlord and a copy of the lease.  You also want to tour the property immediately before closing-same day if possible to view the condition of the property.  Somewhere in your purchase contract it should state that the house must be in the same condition as it was when it was viewed on XXX date (ie when you toured the house with the realtor).  If it isn't, don't be afraid to have your lawyer hold money in escrow to cover damages.

Start eviction proceedings immediately after closing.  Pay an eviction attorney to do it for you.  Give the tenants documentation telling them who to pay and that it is due on the 1st of the month and make sure you have a signed copy of the lease.   As soon as they are 5 days late...start with the eviction and don't listen to any excuses that they have.

@Theresa Harris thanks! It's a sticky situation though. The owner is giving me a really good deal on th house but it's her family that has been living in it as a renter. I'm not even sure if she has told them that she is selling it yet. I have been by a few times but nobody has been home. From the outside it looks like a good deal. But.... idk

If the numbers truly work, then handle evicting them upon closing. Be sure the numbers truly work. Are you remembering every single expense for the property? Are you remembering to include putting aside savings each month from the rental income? True cash flow is what is left after all expenses *and* savings (at least 5% *each* the monthly rent for repairs, vacancies, and capex).

Still good? Great! Close on the property, and that same day file for eviction. Either hire someone or handle it yourself. I'm guessing evictions in Georgia aren't too difficult. Before closing, research how to properly file for it and all the details involved. Do not file until you officially have closed on the property. Do not try to "get ahead" by starting this before closing. You'd be surprised how many people like to treat a property as if it's theirs before they go to closing. Don't do it. Too risky!

After you file for eviction, go introduce yourself professionally to the tenants. Inform them nicely of who you are and that you've had to file for eviction and that it's nothing personal. Let them know that if they move out by a specific date and return the keys to you, you will drop the eviction proceedings. If you really want, even offer them a bit of cash (whatever you see fit) to move out by a specific date. But if they don't move out by giving you the keys and signing a short letter you write up saying they sign that paper acknowledging they moved out and any left items are considered trash, then they don't get the cash! 

Now, if they don't move out, they don't get the cash *and* you already started the eviction and didn't waste time just hoping they move out.

If there was security deposit given to the landlord/owner, make sure that is given (or credited to you on the HUD paperwork) to you at closing. Also make sure the owner provides any other possible paperwork such as rental licences (if required in that area) and lead certificates (if property was built before 1978 and required in that area).

Originally posted by @Josh Fralish :

@Theresa Harris thanks! It's a sticky situation though. The owner is giving me a really good deal on th house but it's her family that has been living in it as a renter. I'm not even sure if she has told them that she is selling it yet. I have been by a few times but nobody has been home. From the outside it looks like a good deal. But.... idk

 That does make it more complicated for her.  Have you seen the inside of the property?  I'd still do a walk through on the day of closing.  You need to know what the condition is.  As soon as you close, I'd start the eviction if they fail to pay rent.