How To Evict Old Ladies?
Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
Hey guys, I have a sad situation that I am going to be involved in soon. I am closing on an 11 unit building and two or three of the tenants have been living at their apartments for 15+ years and only paying $300/month for a 2 bedroom excellent condition apartment with utilities included. They're older and would probably find it difficult to find new housing but they don't have leases. The current owner just didn't want to raise their rents and cause them trouble nor did he take the time to renew their leases. I can't just let them stay paying this rental rate though. Any ideas? The only thing I could think is get them with a social worker who can help them get on section 8 or public assistance to be able to pay us market rent.
Strange, because nowhere in your post did I see where you'd talked to the women and explained the situation to them, and asked if they would be able to pay the rent, or even how much the rent was going to be. In all the time they've been there, has any investment been made into their units, and are they identical to the higher market rent apartments?
This old lady thinks you need to show them some respect, and deal with the women as you would others in business. If they can't afford the rent, tell them you'll be asking them to move, and then give them the notice required in your state, before you find yourself on the other end of a discrimination lawsuit.
@Ronald Starusnak can you let them pay you in caramels or hard candies? They probably have that if they don't have the cash.
Also, are you worried about damages from the cats?
We toured the apartments, all units are in immaculate condition. Very clean, the ladies are not cat ladies lol but the apartments were almost bare, very little furniture and a tiny tiny TV on the least expensive stand I've ever seen. Very sad.
Hey guys, I have a sad situation that I am going to be involved in soon. I am closing on an 11 unit building and two or three of the tenants have been living at their apartments for 15+ years and only paying $300/month for a 2 bedroom excellent condition apartment with utilities included. They're older and would probably find it difficult to find new housing but they don't have leases. The current owner just didn't want to raise their rents and cause them trouble nor did he take the time to renew their leases. I can't just let them stay paying this rental rate though. Any ideas? The only thing I could think is get them with a social worker who can help them get on section 8 or public assistance to be able to pay us market rent.
What's the market rent for their $300/mo units?
$800 is fair.
@Ronald Starusnak
NY has rent control.... how can you raise rent?
NYC has rent control, not Upstate NY. NYC May as well be a different state.
@Ronald Starusnak how much more are you going to get with new ? If only 100 more leave them alone. It will cost you a few k to get them rent ready again , two three months for new tenants do the math . No headaches while earning a little less , I will take that any day.
I don't care about saving a few grand. Time is money, we want to get our properties performing properly fast, usually this means spending a little more upfront. I like to stabilize one thing at a time and not have to worry about it again later on. We will lose about $6,000 per year per unit that is at $300.
With the respect that all humans and in addition our elders, deserve.
Quoting a line from Fried Green Tomatoes "I'm old, I'm not a child."
I wouldn't hold it against anyone to raise the rent without a word to the tenant.
I also wouldn't hold it against anyone to work with an existing tenant because, after all, they are humans and this is where they live. We don't sell TV's to people, it's a bit more personal and significant than that.
The whole point of this post I guess is how can I mix the business side with the human side?
@Ronald Starusnak when I bought my 4-plex there was a fellow paying $600/mo rent while the other units go for $1,100. I met with him and explained that while I want to work with him, I simply cannot afford to rent for so low. He could not afford more so he suggested he get a roommate and they are my favorite tenants today.
Let them know your situation and see if they can help find a solution. They HAVE to know that they were getting a fantastic deal and that it wouldn't last forever.
I like this idea a lot. Though it may be hard for them, I think they're 70+ and not too savvy with the internet thing.
@Karen Margrave is right. You are talking about "fair market rent", but a unit that hasn't been updated in over 15 years will require rehab to get to to "fair market condition".
Lets say it costs $6000 per unit to update. Over the course of three years, that is $166 per month. Over six years that is $83 per month. You mention section 8 pays $725 per month. Let's say that fair market for after rehab is $800 per month. Based on this scenario, with rehab costs, you wouldn't even break even at the higher rent over six years. Maybe my numbers are not right, but the point is do the math. Make sure rehab is getting the desired return.
As far as how to handle the old ladies. I like your thoughts on trying to connect them with programs to help with rent. Keeping the current tenant as a higher rate removes your rehab expense.
One idea is to increase rent to $400 effective February 1st and notify them it is going to $725 on June 1st. That puts the rent right in line with the section 8 amount you mentioned. This gives them time time to either plan for the higher expense or move.
Everyone talking about "throwing grandma out" may not be thinking of the down side in handling it this way. I would not increase rent by 2X with only 30 days notice. They probably won't have time to move and you could be stuck evicting them. So you go into court evicting an old lady, in the winter because you wanted to increase rent by over two times current rent. Even if the law is on your side, it looks bad. Wait until that story gets on to social media and spreads like wild fire.
It is far better for a landlord to work with tenants to get through these difficult situations. It is not about being a "softy", but rather the smart business decision. Helping grandma either pay more or transition out is in your best interest.
I'm not worried about the upfront costs. They are minimal, the previous owner owned a hardware store close by and has kept everything updated and has updated carpets, paint, doors, bathroom flooring, etc. They're all in excellent condition apart from the appliances which are just old. I make good money with my other business and my entire investment goal is to buy these places, get them operating and as care free as possible right away. I don't mind spending and investing into a unit right now so I don't have to worry about it later on.
I don't like jumping between properties trying to play catch up. I tend to over remodel my rentals even so I don't have to worry about anything lol. These units though won't need much of anything. Even the windows are new.
I appreciate your thoughtful response, @Joe Splitrock. It's an effective business decision while maintaining integrity. I'm unnerved by some of the responses which seem downright excited about the prospect of evicting two elderly women. While it may be necessary to do, I don't see where the enjoyment is coming from.
I’d be unnerved about losing 500$ a month
If your going to Subsidize their rents they can Atleast pull their weight around the place instead of just sitting around watching jeopardy in their craft- matic adjustable beds . I’d Atleast make them knit sweaters or bake cookies to sell on the open market to off set the rent loss ! If it was me I’d tape that eviction notice right to the back of their wheelchairs and wheel em out to the curb . Maybe a night out in the elements will make them improve their conduct !
lol!
We have a lot of older tenants paying below market rate, so I sympathize.
First you gotta understand-- they will hate you, even sweet older ladies-- you are the greedy landlord now. They will likely list all of their expenses (ie: prescription drugs, phone bills, etc), and also inform you they are on a fixed income-- when you tell them it's going up. I would recommend a sliding scale, say this year it will be $500, and next year it will be $600, up until you get to market rate of $800. Be ready for a list of deferred maintenance though, when people pay tiny amounts, they won't tell the landlord about anything because they fear rent increasing- but when they are paying more (even below market rate), they want stuff fixed that they overlooked for likely years.
This immediately put you closer to market rate, and slowly increase so they can chose to stay/go. Factor in vacancy, and you're likely going to need to put in a few grand to make it really rent ready, and I think that would be a win/win.
I'm okay taking a loss on fixing the units up if need be and vacancy simply because I don't even need cash flow at all right now, my 100% goal is to have as much passive income after 3 years as possible, even if that means losing money at first. I'm reaching for the goal of passive income not just income. I can make good money working right now but if I want it to be passive as quickly as possible.
We have a lot of older tenants paying below market rate, so I sympathize.
First you gotta understand-- they will hate you, even sweet older ladies-- you are the greedy landlord now. They will likely list all of their expenses (ie: prescription drugs, phone bills, etc), and also inform you they are on a fixed income-- when you tell them it's going up. I would recommend a sliding scale, say this year it will be $500, and next year it will be $600, up until you get to market rate of $800. Be ready for a list of deferred maintenance though, when people pay tiny amounts, they won't tell the landlord about anything because they fear rent increasing- but when they are paying more (even below market rate), they want stuff fixed that they overlooked for likely years.
This immediately put you closer to market rate, and slowly increase so they can chose to stay/go. Factor in vacancy, and you're likely going to need to put in a few grand to make it really rent ready, and I think that would be a win/win.
I do expect to hear all of that and that's why my title for this post is what it is. I am truly worried that being Elderly could make it very difficult for them to find a new spot.
Eviction is for lease violations and non-payment of rent. You can't evict them.
You CAN increase their rent - but look into your state's landlord-tenant laws, because some states limit the amount you can increase at one time.
You cannot raise their rents without giving them proper notice - in most states no lease equals a month to month tenancy which requires one month notice INCLUDING one rental period. So you can't give notice today and raise rent in the middle of the next month.
It's mid-December right now, that means the earliest you can see an increase is February 1.
Right, it'd be a non-renewal. Optimally we'd like to help get them transitioned into the market rent but based on what the previous owner did with their rental rates I don't think they can afford it. Of course I haven't asked yet.
@Ronald Starusnak - congrats on the 11-unit! Evicting old ladies is a bit of a turn from a mobile home investment, if I'm remembering correctly! The section 8 route sounds really reasonable. I'm no lease expert, but checking with an RE lawyer on providing options between eviction, section 8 application, or a termination of housing only to welcome them back with market rents may be possible.
Caution: I'm not sure if the mechanics of the latter option is legal; I'm brainstorming here.
Cara, we did a big turn from the MHP! Will have 62 units bought this year haha. This is my only occupied building that we're buying.
@Ronald Starusnak - Good for you for demonstrating basic human compassion and at least trying to puzzle through a particularly prickly situation. Placing business above any sense of humanity is a failure of the soul. And who wants to do business with someone who has an ugly soul?
On the flip side, @Karen Margrave brings up an excellent point with regards to discrimination: New York State's (aspirationally-named) Human Rights Laws include a restriction on housing discrimination based on age. Discrimination includes, under these laws, providing unequal services to tenants based on their protected class status (such as age).
Therefore, if you're willing to provide extra services (e.g. setting up a soon-to-be-former-tenant with social services) to one tenant, then you'd better be willing to provide that service to all tenants, lest you find yourself on the wrong side of a discrimination lawsuit.
How does that play out in a real world worst-case scenario?
You think you're doing a good thing by offering, before upping her rent, to help the elderly lady in Unit 6 apply for Section 8 or get her in contact with Social Services. A year from now you have a 23 year old tenant in Unit 11 who you inform "rents are going up!" You don't offer her any Section 8 application help or to connect her with Social Services. And, what's more, she's friends with the elderly lady who lives in Unit 6. They get to talking and 23-year-old learns about the special treatment the elderly woman in Unit 6 got from you. She's savvy and doesn't want to leave her apartment. So she talks to an attorney or the local legal services clinic run by Syracuse University Law School (I did Tenant rights for Greater Boston Legal Services while I was at Boston U. School of Law, so it's not an unreasonable scenario), and they tell her about housing discrimination and how she can't be treated differently just because she's 23 and Unit 6 is 89.
Now you find yourself on the wrong side of a discrimination lawsuit, housing this angry tenant and paying her rent AND damages. NOT GREAT, RON. NOT GREAT.
The unintended consequence of non-discrimination laws is that they sometimes lead to scenarios like this - where you have identified an elderly person as weak or in need of additional help but are required by law to treat her as any other tenant.
In other words...it's a pickle.
--break--
That said, and not to be the fun police here because I am a fun guy... (I tried to upload the Kawhi Leonard laughing gif here but I'm not sure if it worked)
but I've got to say that I'm a little disappointed by the levity with which many users (not you, Ron) are treating this situation. While I can understand gallows humor to help process or mentally manage traumatic events, these are human beings that Ron is talking about. Potentially losing your home around the holidays is pretty traumatic. Laughing at their circumstances doesn't seem funny, it just seems cruel. If this were happening to my Grandma and I presented these facts to a group of unknown business people and they made a bunch of Werther's Original jokes, I would (1) be forgiven for thinking that landlords are the awful stereotypes the media and lawmakers often make them out to be, (2) be justified in hating them forever, (3) also be justified in probably punching them in the face, and (4) probably get away with it because I'd demand a jury trial and as soon as the comments of the punched party got out, the jury wouldn't sympathize with that person either and would let me go.
Again, not trying to be the fun police. It's just that some of those comments about a potentially vulnerable population seemed gross. Maybe I'm just being sensitive, but then again people might be acting a little bit like jerks. We report, you decide.
OK! Non sequitur!
@Diane G. - ahhh...the typical mistake of the non-native NYer...assuming that the rest of the state is the city. New York City has rent control. New York State does not have universal rent control. New York City is a city within New York State that contains about half of the state's population. Conversely, about half of the state's population does not live in New York City (or even particularly like it). NYC laws, despite what they try to do in the state legislature, do not apply to the rest of New York State. Common mistake to make. Also, go Bills.
I think some people are just trying to have fun on the click bait title but the problem is indeed real and it's concerning. You're also absolutely right that I shouldn't be treating the Elderly Tenants different even if they're more vulnerable. The Neighbor to my personal home has no one, she's Elderly and we often have to get her groceries and help with minor things, some 25 year old kid isn't going to have that problem and the thought of putting someone out who can't even get their own groceries has been on my mind since we found out.
Is there any way we can suggest or help them? No matter what I do they're going to look at me like a scumbag for not having empathy. Maybe get an unrelated 3rd party to help? What if we issue a letter about the rent increase and on the letter we just put contact information for Department of Social Services? Then moving forward it won't be too hard to include that information on all notices of rent increase.
I guess all I have to say is in NYS do not make any policy decisions based on the protected classes. Positive or negative..... at all. Simply make policies for your company and execute them. Trying to help "Insert protected class" for any reason is just a recipe for disaster. Make a policy that is identical for RACE as it is to AGE, SEXUAL PREFERENCE, LAWFUL OCCUPATION... etc.
DISCLAIMER: Not legal advice, simply used for entertainment purposes only. Any advice should not be followed by any person on the planet Earth. The poster is simply a dolt and the opinions stated are most likely poorly thought out.
In the future I would make it part of the sales agreement that the seller has to evict current tenants and pay for eviction so they are the bad guy rather than you. Now that you will own the properties it is best just to have the frank discussion with them. Show them what current rent rates are and if they would like to stay that is what they will need to start paying. If you are willing to help them find services like section 8 or agencies to help them move then that is a great idea as well. As much as we want to help people we are still running a business and have to run it as such. Again in the future I would make the seller do the dirty work since they caused the situation.
In the future I would make it part of the sales agreement that the seller has to evict current tenants and pay for eviction so they are the bad guy rather than you. Now that you will own the properties it is best just to have the frank discussion with them. Show them what current rent rates are and if they would like to stay that is what they will need to start paying. If you are willing to help them find services like section 8 or agencies to help them move then that is a great idea as well. As much as we want to help people we are still running a business and have to run it as such. Again in the future I would make the seller do the dirty work since they caused the situation.
That would have helped a lot if we told them to non-renew tenant lease as part of the agreement. I can see them being sketched out doing that though in case we backed out of the deal and had them evict their whole building lol.
@Ronald Starusnak
I just acquired a property where rents haven’t been raised since 2003. They are low by 350 per month. We have a plan to raise rents every 3 months for 1-1.5 until they hit market. We intend to send out a mailer and describe exactly what we intend to do. Luckily, I always have an open ear, but am not easily influenced by tenant sob stories. These people have to know they have been getting a deal. If I chose to leave rents where they are, I would be leaving over 200k in forced appreciation on the table.
I may be the outlier, but first chance I get I'd call them to let them know the situation that their rents are far far below market and that you plan to raise them. You don't have to be dick about it, but how much money and time did you put into getting this property? Is Real Estate your hobby or your business?
If it's your business, do what you have to do, and let the politicians have the bleeding hearts.
I would also mention that just because they're old doesn't mean they're helpless. I actually had a tenant who was elderly and without a car who paid my increase in rent before ultimately leaving at which point she paid the penalty to break the lease and leave. She didn't make a fuss over it either... Don't judge a book by it's cover .. because you don't know what people have or don't have.
@ronald I know this sounds harsh... but remember that you are running a business and you are the CEO of that business. Becuase you own the property you have no one to answer to. But you probably do and that is the bank in the form of mortgage payments, you must create standardized policies and procedures and MOST IMPORTANTLY you have to treat all tenants the same or you can be involved in a possible fair housing or discrimination suit by some other tenant that did not get the special treatment.
I like the idea of trying to get them help with government agencies but before you do this i would suggest that you put that in your policy and procedures manual and make that a standard so that it is written incase of an issue in the future.
The more you bend the rules of your business model the higher chances you have of it breaking. 1 out of 3 landlords are in some form of suit every year for violation of the law and the majority are because they did a favor or nice thing.
It's two weeks before Christmas!!!
Sorry, had to throw in an extra jab. We had a very similar situation with a duplex we inherited a tenant in. Around this time of year too. When we acquired it we had the property manager have a discussion with him about the rents. He told her that he couldn't afford any more, we struck out looking for social programs to assist (they weren't taking new cases), so we gave him three months notice to move out (It helped that he caused me $500 in come back fees for an appraisal and yelled at my property manager). He ended up needing to stay "just a little longer" than that notice but claimed he could pay closer to market rent than he previously let on. A year later and he's paying about 85% of market. We'll probably step it up slower than we would normally on account of his situation, but we are in a good position with the cash flow and he's never leaving until we price it out of his range (so no turnover cost) and never calls for anything trying to fly under the radar so that's been working for us.
If you don't handle the situation today it will only be more pitiful and harder tomorrow. Depending on your strategy, you need to either take the bandaid approach or start to incrementally raise rents until they decide to move on to somewhere else. You might find out that they can make rent happen at levels higher than they are letting on.
How much are they below market rents and what's the cap rate in the area? You see where this is going...
Section 8 pays $725+ for this apartment. We don't want to just be at section 8 rates either.
So conservatively, you are taking a $18,000 hit to NOI by having those rents at $300 instead of $800. Even if the CAP rate in your area is 10%, that's still costing you $180,000 in property value. If that doesn't motivate you to start ratcheting up rents, nothing will!
You're right, we're taking a big potential loss here. I know the business thing to do is to tell them we are raising rents but at what point do we have to second guess what we're doing? They're most likely on SSI only.
You never have to. The fact that you are considering them so thoroughly in your thought process tells me that you have no reason to second guess whatever decision you arrive at. Give them plenty of time to make other arrangements because a big rent correction is happening or increase rents gradually over time and let them stay for continued reduced rent if you feel more comfortable with that. Make a decision that you determine to be the intersection of reasonable, rationale and ethical. As long as you are honest with yourself and them, you have nothing to be ashamed of.
The same people that walk into a financial advisors office at 58 and say, hey I have to start saving so I can retire at 65 are going to be those ladies you are worried about 20 years down the road. I'm not saying that anyone deserves poverty, and who knows what extraordinary challenges an individual might have faced in their lifetime, but in the U.S. poverty often represents the summation of an individual lifetime of choices and is does not always reflect the presence of insurmountable obstacles.
This decision is yours to make because you have sacrificed to put yourself in the position that you have. Chances are they aren't going to be happy with anything that happens other than you forfeiting value and cash flow entirely, so do what you decide is right for your situation and look forward instead of back.
I find myself agreeing mostly with what Julie Dillon has suggested, mainly that you make no assumptions. In fact, I would have the discussion about the rents with ALL the tenants in the building, not just the three ladies of whom you speak. I would start with the requirement that all occupants be on a current lease by, say, January 1st or as soon as the notice requirement for your state allows. Then, within the lease you can incrementally raise the rent every two months or so until you get the rent for all the units to the market value by the end of the lease period. The benefit of this is that, first, by requiring everybody to be on your lease, you are not discriminating against anyone. And second, you won't have to deal with any wierd or unusual conditions that may be present in some of the current leases. Should some of your tenants elect not to sign a new lease, then you may terminate the tenancy as proscribed by the laws in your state.
This whole thread reminds me of the movie "Duplex" with Ben Stiller and Drew Barrymore. Classic.
Hey guys, I have a sad situation that I am going to be involved in soon. I am closing on an 11 unit building and two or three of the tenants have been living at their apartments for 15+ years and only paying $300/month for a 2 bedroom excellent condition apartment with utilities included. They're older and would probably find it difficult to find new housing but they don't have leases. The current owner just didn't want to raise their rents and cause them trouble nor did he take the time to renew their leases. I can't just let them stay paying this rental rate though. Any ideas? The only thing I could think is get them with a social worker who can help them get on section 8 or public assistance to be able to pay us market rent.
What's the market rent for their $300/mo units?
$800 is fair.
I'd imagine you have $5k-$10k in reno ahead of you on each of those old lady units. I'd try to move them up the ladder slowly. Don't be in a hurry to drop a quick $20k here on a building you just took over. Keep money coming into your pocket while you are stabilizing things. Try a few smaller increases for a year or so first. Too much artificial reno and turnover costs are what will kill you.
@Ronald Starusnak - Good for you for demonstrating basic human compassion and at least trying to puzzle through a particularly prickly situation. Placing business above any sense of humanity is a failure of the soul. And who wants to do business with someone who has an ugly soul?
On the flip side, @Karen Margrave brings up an excellent point with regards to discrimination: New York State's (aspirationally-named) Human Rights Laws include a restriction on housing discrimination based on age. Discrimination includes, under these laws, providing unequal services to tenants based on their protected class status (such as age).
Therefore, if you're willing to provide extra services (e.g. setting up a soon-to-be-former-tenant with social services) to one tenant, then you'd better be willing to provide that service to all tenants, lest you find yourself on the wrong side of a discrimination lawsuit.
How does that play out in a real world worst-case scenario?
You think you're doing a good thing by offering, before upping her rent, to help the elderly lady in Unit 6 apply for Section 8 or get her in contact with Social Services. A year from now you have a 23 year old tenant in Unit 11 who you inform "rents are going up!" You don't offer her any Section 8 application help or to connect her with Social Services. And, what's more, she's friends with the elderly lady who lives in Unit 6. They get to talking and 23-year-old learns about the special treatment the elderly woman in Unit 6 got from you. She's savvy and doesn't want to leave her apartment. So she talks to an attorney or the local legal services clinic run by Syracuse University Law School (I did Tenant rights for Greater Boston Legal Services while I was at Boston U. School of Law, so it's not an unreasonable scenario), and they tell her about housing discrimination and how she can't be treated differently just because she's 23 and Unit 6 is 89.
Now you find yourself on the wrong side of a discrimination lawsuit, housing this angry tenant and paying her rent AND damages. NOT GREAT, RON. NOT GREAT.
The unintended consequence of non-discrimination laws is that they sometimes lead to scenarios like this - where you have identified an elderly person as weak or in need of additional help but are required by law to treat her as any other tenant.
In other words...it's a pickle.
--break--
That said, and not to be the fun police here because I am a fun guy... (I tried to upload the Kawhi Leonard laughing gif here but I'm not sure if it worked)
but I've got to say that I'm a little disappointed by the levity with which many users (not you, Ron) are treating this situation. While I can understand gallows humor to help process or mentally manage traumatic events, these are human beings that Ron is talking about. Potentially losing your home around the holidays is pretty traumatic. Laughing at their circumstances doesn't seem funny, it just seems cruel. If this were happening to my Grandma and I presented these facts to a group of unknown business people and they made a bunch of Werther's Original jokes, I would (1) be forgiven for thinking that landlords are the awful stereotypes the media and lawmakers often make them out to be, (2) be justified in hating them forever, (3) also be justified in probably punching them in the face, and (4) probably get away with it because I'd demand a jury trial and as soon as the comments of the punched party got out, the jury wouldn't sympathize with that person either and would let me go.
Again, not trying to be the fun police. It's just that some of those comments about a potentially vulnerable population seemed gross. Maybe I'm just being sensitive, but then again people might be acting a little bit like jerks. We report, you decide.
OK! Non sequitur!
@Diane G. - ahhh...the typical mistake of the non-native NYer...assuming that the rest of the state is the city. New York City has rent control. New York State does not have universal rent control. New York City is a city within New York State that contains about half of the state's population. Conversely, about half of the state's population does not live in New York City (or even particularly like it). NYC laws, despite what they try to do in the state legislature, do not apply to the rest of New York State. Common mistake to make. Also, go Bills.
This is the best post I have ever read of BP.
@Ronald Starusnak if you are saying you will get about $500 more per month per unit ( $800 vs 300 ) then she must go.
Good Luck