Help with horrible tenants

79 Replies

Hi guys, I'm reaching out for help or advice on how to deal with a tenant that I have been having problems with. Short story is that this tenant lost her job last year. We felt bad (horrible mistake) for their misfortune and accepted half rent for some months. They are $2,200 behind, and keep making BS excuses. Anyway, besides being behind in rent, there seems to be a lot of drama between the couple, and it has got us a bit annoyed. Everytime the guy leaves, the women inquires about changing the locks. We asked for a restraining order, and the guy always goes back. What's most frustrating is that they have bought a new gazebo, a new large pool, outdoor furniture and other luxuries while they owe us money. My question is, is there a formal notice or letter that I can use where I demand the outstanding balance within a specific date, and what are my rights. I have looked online for resources, but feel that I can use more clarity, and I trust the opinions of the biggerpickets community much more. 

You can send them a pay or quit notice. It's a notice to a non-paying tenant to pay the rent by a certain date or "quit" the property. You might google pay or quit and your state. If they do not pay then you can start the eviction process.

Did they assume that you were giving them this 1/2 off? or did they know full rent was still due? 

@ Clay O.  They are aware and are paying full rent. They have made the full payment for the last 3 months but are still behind $2,200. They've been giving an extra $100, but I realize it will take forever to get my money at that rate. I'm agitated because I see all they buy and see what their lifestyle is despite owing me that much money.

@Luis Prieto

Sometimes, landlords have to be clear and honest with themselves whether they are running a business or a charity organization. As you can clearly see and as you describe, when you give an inch they will take a mile, all on your account and without any conscience.

Start the non-payment/eviction process asap before they take you for a bigger ride.

Don't accept any more sob stories or excuses from them, not even one more. When tenants give a sob story or excuse, seasoned landlords will respond with their own sob story or excuse how they need the rent to pay the mortgage, insurance, repairs and etc.

Originally posted by @Luis Prieto :

@ Clay O.  They are aware and are paying full rent. They have made the full payment for the last 3 months but are still behind $2,200. They've been giving an extra $100, but I realize it will take forever to get my money at that rate. I'm agitated because I see all they buy and see what their lifestyle is despite owing me that much money.

If they pay $100 a month, it won't take "forever" it will take 22 months. That's probably too long so you may need to make some type of more favorable (to you) arrangement such as $200 per month. That would eventually get it paid off (less than a year)

I had a tenant get way behind like this and they signed a two year lease at an amount to pay the rent plus the arrears and they did get it down to zero. They're still in the property by the way some years later.

Accepting reduced rent was a mistake which you probably realize now. Everyone that doesn't pay their rent has a reason. We don't need to know what their reason is because it doesn't matter. They pay the rent or "leave".

Our late/unpaid rent policies have changed over the years and are pretty inflexible now.

@Wy Kay.    We have learned our lesson. We really are not flexible anymore and demand atleast full rent. I plan to sell this home next year as I have about 90k in equity and it has only been 3 years since we occupied it for 3 years, therefore we won't get taxed on it. I am just trying to get my money back by March. 

Originally posted by @John Teachout :
Originally posted by @Luis Prieto:

@ Clay O.  They are aware and are paying full rent. They have made the full payment for the last 3 months but are still behind $2,200. They've been giving an extra $100, but I realize it will take forever to get my money at that rate. I'm agitated because I see all they buy and see what their lifestyle is despite owing me that much money.

If they pay $100 a month, it won't take "forever" it will take 22 months. That's probably too long so you may need to make some type of more favorable (to you) arrangement such as $200 per month. That would eventually get it paid off (less than a year)

I had a tenant get way behind like this and they signed a two year lease at an amount to pay the rent plus the arrears and they did get it down to zero. They're still in the property by the way some years later.

Accepting reduced rent was a mistake which you probably realize now. Everyone that doesn't pay their rent has a reason. We don't need to know what their reason is because it doesn't matter. They pay the rent or "leave".

Our late/unpaid rent policies have changed over the years and are pretty inflexible now.

@John Teachout I know it will only take 22 months, but I don't have that much time. I am planning to list the home in March, and I am just trying to recoup my money by then, so I was just wondering if any strategies to make them pay at least $200 extra each month. We have learned our lesson, and thankfully it won't be a big hit. 

Well, if you're going to list the property in a half year, you don't have many good options other than to limp them along until that time. Will you need much time to turn it prior to listing? I guess even if they pay another $600 of the arrears, it will reduce the loss.

@Luis Prieto   If you agreed to the payback when she was out of a job, tell them you need to increase the payments now that she's working again. Figure out the amount you need to get paid back by the spring and tell them to start in Oct as that gives them time to get their finances sorted.

They are renters for a reason. Unless they are young, just moved to the area, etc, then the most likely reason is they waste their money on consumer goods such as new gazebos, pools, etc. Glad you learned your lesson in this regard. Very noble of you, I think most blue collar land lords have done this before, but we all learn our lesson at some point. 

@Luis Prieto it’s happened to the best of us, one way or another! Check your state laws first, in NH, we go with a demand for rent, then I immediately went for the eviction. Your state website will give you all the basics! You will hear story after story! Good luck

@Luis Prieto

Tell them to advance the same credit card they’re buying pools with and pay up. And get them out ASAP. Almost everybody makes this mistake once. Just don’t learn the same lesson twice or it’s your own fault.

I agree that you should file a pay or quit and if you were planning to keep this house I would 100% recommend you go ahead and file for an eviction. BUT.. here is your issue. If you are planning to list to sell in March what does that time line look like? If you file an eviction you are looking at 30ish days (depending on your state). That puts you at the beginning of October. If you have to do a make-ready and find a tenant you may push into November/December depending on your rental market. If you want retail prices you'll want to sell without a tenant, so they'll need to be out in February for you to list in March. 

Is it going to be realistic for you to find another tenant that will be willing to move by March? 

If the tenant is paying their rent in full, attempting to make-up the owned money and not damaging the property, you may consider a written agreement for them to pay a certain amount each month. It's going to be either deal with the annoying tenants you have and try to get them on a payment plan, or possibly have a six month vacancy through the winter. Neither is a good option, but I would work with the tenants you have to try to get them to pay as much extra as you can and keep them until it's time to list the house. 

Chances are, they are taking out debt to pay for the "extras." See if they will agree to a weekly or bi-weekly payment plan. It's a lot easier to collect money if you can get it on payday then relying on them to budget enough to have it by the time rent is due. 

I am going to take the contrarian view here of kick the bastards out BP members LOL.

if they are paying 100 a month extra and are current I would accept that.. and if your selling in a year 

it becomes moot and they owe you 1k.. you do an eviction and turn over right now and I flat guarantee you it will cost you more than the grand they will stiff you for.

if they fail to pay anymore then take the kick the bastards out BP mantra and do just that.. 1k is just nothing money don't want to fight over that.. 

Like Jay said.... But to add you gotta get to the money before they spend it... They probably can't lump sum it but they could probably afford a more agressive bi monthly payment vs 1x mo +100

@Jay Hinrichs

I agree 100%

If you are going to be selling, turnover could cost you more money and hassle.

If they are buying a gazebo and pool, it is an indication that they care about the house and are taking some pride in their home.

Before sending them a formal notice, have a conversation with them for goodness sake and see what you can work our before sicking was he dogs on them.

If conversations fail, then you can go to the next level should you choose.

I want to thank everybody for the overwhelming support and sound advice. For me, it is more about the frustration I have than necessarily the money. If I were to see that they were doing all they could to live frugally, and still struggle, than I'd be cool with the extra $100. It's just very frustrating because right now my wife and I are on only one income (hers) while I'm getting ready to transfer to Penn State to finish my B.S. On too of that, our 2.5 year old has a sensory processing disorder, and is in constant need of extra expenses (weighted clothes, compression, etc..) So, as you can imagine, we are living quite frugally, (which doesn't bother me because I'm a simple man anyway.) And then I see them being irresponsible on my dime. They do take care of the house, so therefore, I will have a conversation and try to squeeze a little more per month and try to limit my loss. A las, when we do sell, my frustration will probably be gone, but I will learn my lesson.

put your foot down and demand money owed.

You might have to be their financial advisor/accountant. "I see you bought all these items, but you are $2200 behind on rent. Let's see what expenses you can cut out so you can pay off this debt faster. I am requiring that you pay $500 extra per month."

so maybe you can get your money within 5 months.

if you decide not to evict, no matter what, you gotta recoup this debt before the lease term is up.

They're acting selfish- they should not be indulging in stupid gazebos and pools when they still have $2000 debt.

@Mike Franco.    Perhaps that's a good idea. After all, I do plan to have a career as a financial advisor after I finish my bachelor's at Penn. Has this happened to you before, I can sense the same frustration/anger in you about this that I myself feel.

Separate emotion from business, but learn from the mistake. It's recoverable don't let the stress of your life cloud the judgment of a sound business decision.

numbers (read that as money) doesn't mean anything more or less them what you associate it with... Come up with a plan that benefits both of you and go from there. There's a solid chance these people could appreciate the pride of feeling caught up but don't have the money management skills to make it happen and in all honesty at 100/mo don't feel it's important to do so.

You could probably stand to cut them a deal if you get more (frequent and manageable) payments for past debt. Who knows maybe they'll even want to buy the place and you forgive the debt entirely/end the lease early. Or maybe the improvements get some credit and reduce debt/stay with property at sale assuming they're kept it good condition.

win win is always better then someone or both losing...

@Matt K. They have expressed that they would like to buy the house, but I do not think it is possible. I think that their credit is bad, hence why they have inquired about rent to own, but I want my cash now. I know that they very much like the house, because it is quite nice. It was our first and it has hardwoods everywhere except for marble floors in the kitchen and bathroom. It really is a nice place. I don't feel that they have really done anything to improve value, but they have taken care of it. Perhaps I will try the bi weekly payment method. Therefore I I'll get more money before they blow it on another Saturday carne asada and brews with their guests.

Half rent is violation of the lease (mine at least) should have filed for eviction IMMEDIATELY. NO money but the 10th of the month they must go. I no longer have any relationships with my tenants for this reason. Run like a business of run out of the business

@Luis Prieto You hit on a crucial point in your posts. They are prioritizing paying for other luxuries before paying you rent. Serve them with a notice to pay their past due amount by a certain date and let it play out from there. Right now they are keeping the balance because they know they can get away with it and you likely won't do anything about it. Turn the tables on them and see how it goes. 

From a screening risk profile, this kind of relationship drama happens more frequently with unmarrieds vs married, smokers vs non, etc.  We are in the risk measurement / actuarial business when selecting tenants.

The things they purchased represent permanence. Do they have any idea you plan on selling next March?  The $2200 default is unfortunate,  but I'd be hesitant to rock the boat too much with quit notices or full demand letters, then an oh by the way, you're out next spring anyways. They can be an ally or a nightmare at sale time.

I would probably let go as it is with them compliant and paying full rent plus $100 with the expectation they will  help you sell by being clean and pleasant.  But, you have to be a big picture person to be a napper so take my view with that grain.  5 years from now a clean sale will matter much more than a $1500 or whatever net rent default.  I always ask myself if it will matter in 5 years or not. The sale is key.