Tenant demanding $3000 to move out

Asia Jones · 2020-01-06T19:16:48-08:00

I need Help!!! Just a heads up long post. I had to move for work and was debating on renting my house out. In Jan 2019 I made an agreement with text message proof “not sure if that means anything “ with my cousin that he could stay in the my home and rent it out until 02/01/2020. I hired a property management company and they provided the tenant with the wrong move out date “05/19/2020” on the lease agreement. On my original contact between me and the property management company I set the move out date to be 02/01/2020. I informed the tenant that the date was an error and that it would be updated. Now fast forward to Dec 2019 and I am listing the house for sale due to unforeseen circumstances. My “tenant” refused to allow the house to be shown and demanded I pay $3000 for him to move out by 02/02/2020. Somehow my realtor sweet talked him and he only allowed the house to be shown on a Friday and Sunday. After few hours he cancelled the rest of the showings for the day and that Sunday. Thankfully I got a buyer. I’m set to close on 02/14/2020 with no idea if he is going to move out. I even offered him $1,000 cash for keys and he refused saying that was not enough and he wants $3,000 to move. My PM company did provide him with a 60 day notice that is set to expire 02/19/2020.My PM company has been trying to contact him for a little over a month with no response. I have been trying to contact him as well and no response. He told my realtor “everyone is getting something out of this but me”.What should I do? I really could use any type of advice.

Isaac S.

Member since 2018 · 563 posts · 562 votes

6y

First thing that comes to mind is a frickin knuckle sandwich!

Seriously, what a turd of a cousin!

Try and counter offer $2000, before you succumb to the $3k, which in the over all scheme of things, isn't that bad of a hit, if that's all it is.

FYI, you have learned a lesson(the hard way) that appears in many BP posts on advice for new landlords....NEVER,EVER,EVER,EVER,EVER...rent to friends or family!

3 Reply

Jared Shoemaker

Rental Property Investor · Berwick, PA · Member since 2019 · 18 posts · 6 votes

6y

@Asia Jones

Move another “Friend” into the property and make sure they make his life hell till he moves!

1 Reply

Edy Lagares

Pleasanton, CA · Member since 2019 · 30 posts · 15 votes

6y

@Asia Jones

I’d definitely go after the PM company if they made the mistake, they have to fix it and fix it fast cuz February is around the corner.

Maybe you can talk to his parents and explain the situation and hopefully they can help convince your cousin to move out?

I hope you get this figured out .

2 Reply

Michael King

Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes

6y

@Asia Jones My brother ripped me off to the tune of $100K in a real estate deal. It wasn't a deal gone bad, well not for him anyway, he made sure of that. For me, absolutely. So I say, thugs, baseball bats and balaclavas will give you more joy for your money. Or call his momma.

Or if you want to be really cool, use every penny of that $3K on a lawyer to get the POS out of your house.

Good luck to you, what a scumbag you have for a cousin. But good to find out about him now, before you stood to really lose a lot of money with him.

1 Reply

Joseph ODonovanPro Member

Property Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votes

6y

@Asia Jones What would concern me is your tenant may turn into a squatter come time of settlement. And that may kill the deal. As a buyer, I would never buy a property with an unhappy tenant in it. If your property is occupied at the buyers walk thru, the deal may be off. So you have to weigh the $3K CFK vs no deal. Only you can make this decision.

1 Reply

Marian Smith

Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes

6y

@Asia Jones Tell your cousin that if you have to hire your PM to get him out you will ask to be awarded court costs, PM fees, lawyer consultation fees and any other damages. The eviction will be on his credit report. There are protections from “clerical errors” and you have correspondence proving the agreement was only through 2/2/20. Your cousin is renting and he is not entitled to anything not spelled out in the rental agreement. But you would rather pay him 1k than your bumbling PM. His choice.

1 Reply

Marian Smith

Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes

6y

@Asia Jones PM can put correspondence on the door and photograph it.

2 Reply

Robert Nelson

Member since 2019 · 43 posts · 20 votes

6y

@Asia Jones

Sorry to say, but in my experience, $3,000 could be cheaper than hiring a lawyer and evicting, especially if the tenant is savvy. They could quit paying rent, tear the place up and wait until forced to move out by the sheriff.

1 Reply

Brian LucierPro Member

Property Manager · Fitchburg, MA · Member since 2012 · 146 posts · 201 votes

6y

There are three types of tenants I do not rent to.

Friends
Family &
Fools

No that thats is out of the way, let's focus on the issue at hand. I "hate" cash for keys and refuse to do it under any circumstances. This is because we have a rock solid lease and are very careful. It is unfortunate there was a error on the rental agreement. But it is in writing and a signed legal contract.

So, I would suggest:

1. Follow through with the 60-Day Notice that was sent to the tenant.
2. Do everything as legal as possible.
3. Follow the laws where ever this rental and potential sale is taking place.
4. Document everything in writing to prepare for your court date.
5. Make an additional copy to submit as evidence.
6. Only what you BRING TO COURT matters, forget about "he said - she said"
6. Prepare to spend more if you have to "move them out"

Or, write the check for $3,000

If it were me in this situation, I would write the check, put it in escrow with the closing attorney, and notify the tenant it is ready and waiting as soon as he goes and vacates the property – although I hate cash for keys.

We are looking at the sale of a property here were you could potentially put hundreds of thousands of dollars in your pocket. I know, I know, we are investors, and on "principal" the tenant is wrong, and you are right. But it that worth sinking the sale of a property over pride? Which is more important? Being right, or being relieved of the whole issue and moving on?

Perks to paying him.

1. It is tax deductible as a part of the closing costs.
2. It is a cost of doing business
3. It helps a family member which was your original intention
4. It allows you to sell the property
5. It allows you to move on

Tough love statement?
"Suck it up buttercup"

Please do not hate me for not having any filters. It is what it is. I know it is painful, but the tenant has a contract. If you do not pay him the $3K, you could end up spending A LOT more to move them out and put their stuff in storage (Massachusetts). Even worse, they have possession of the property and could destroy it on you. I hate the solution, but write the check.

If this is about being right - the tenant has a signed agreement to stay until May. This could cost a LOT more than $3K if you fight it.

3 Reply

Ola Dantis

Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes

6y

@Asia Jones I really liked what @Joe Splitrock said.

First of all, this guy is your cousin for crying out loud! So, he clearly doesn't care about morals!

Look, it is painful but just pay the $3,000 and move on because you don't want your new buyers breathing down your neck as well after closing for the keys!

Now, as for the execution of the cash for keys, you and the PM should have a great strategy of making sure that this guy actually leaves as he is getting the money and be firm when it comes to that. Go back home if that what it takes OR call his mom!

At the end of the day, if the PM reimburses you part or all of the $3k, then awesome. If not, it cost you $3k to see the true color of a family member. Life is an interesting journey...

3 Reply

Ian WalshBusiness Member

Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes

6y

Depending on the lost rent, eviction cost etc it could be worth it.

1 Reply

Matthew Paul

Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes

6y

Cousin or not , the lease has an ending date , legally as long as they pay rent they can stay till the end of the lease . Whether you pay or not is up to you and how it pencils out .

0 Reply

Alexandre Marques dos Santos

Rental Property Investor · Member since 2020 · 215 posts · 137 votes

6y

@Brian Lucier

Well said. Some info came out after my thought. Tennant have a signed lease. It could cost more going to a court. I would still, in possession of the noticed by PM that contract had a wrong termination date AND the messaging text, try to negotiate a better “ cash for keys”, saying you have a case in court. Offering him a 1500/2000 for it.

Go to PM and ask reimbursement, after all they made a mistake. AND use your strategy.

In the end, CHARGE HIM EVERY PENNY YOU CAN from deposit when doing walk through after he delivers the key. After all he deserves it.

2 Reply

CJ Ball

Investor · Virginia Beach, VA · Member since 2017 · 19 posts · 11 votes

6y

@Asia Jones

Ok. Think hard on this one. The PM company are in business. They are a *business*! They need to conduct themselves like one. They carry (or should) Errors & Ommissons Insurance for this very reason! Also, you definitely need to immediately contact an attorney, at least for consultation. Corporate and Real Estate Attorneys can be expensive but they are there to strategize on your behalf to help you navigate legal waters which could in the long run cost you your home, your business, and basically your financial life. So get their opinion. And also, the PM needs to receive at minimum, a threatening demand letter from you and/or the attorney demanding they pay and correct the situation in a hasty way. You may have to ask for a later closing date. I think by your cousin allowing the showing of the property those few times, he indirectly signed off on the house being sold and forfeit any lease termination payments to him. But that's one for the attorney to consider. Good luck! Give us an update when there is one.

1 Reply

Shelleman Paulin

Investor · Atlanta, GA · Member since 2018 · 18 posts · 16 votes

6y

@Ola Dantis @Joe Splitrock

This family member sounds like an opportunist. Even with a solid promissory agreement to move out after receiving cash for keys, what’s to stop him from holding out longer and demanding more money or being more of a nuisance to the OP?

What would be her most viable option after afterwards with the least financial impact?

I agree with others who gave strong warnings against renting to family members.

There’s some really great advice in this thread. Thank you guys.

1 Reply

Michael Robbins

Property Manager · Henderson, NV · Member since 2018 · 501 posts · 317 votes

6y

I would make all decisions based on what you have agreed to in writing (a contract, not text messages). If the tenant wants $3,000 for moving out early has he/she signed an agreement? If not, then I would not pay any amount and assume that the original contract date is the date he/she will move out. Even though the property management company made an error, all parties signed with a move out date of 5/2020.

1 Reply

Joseph Walsh

Brookfield, WI · Member since 2016 · 191 posts · 108 votes

6y

I'd let the PM company deal with it. Maybe let your taker cuz (sucks when family are "takers", I know), AND family know, "well, he blew it. I tried to help him out by GIFTING him $1k on the way out to set up a deposit for him on a new place, instead you tried to extort me. now you get nothing, deal with the PM company." Also, I'd let the PM company know, since they blew it, and eviction costs are on them.

1 Reply

Bryan Devitt

Contractor · Oxford, MA · Member since 2018 · 807 posts · 745 votes

6y

What are the odds he moves out after you give him $3k? He's going to stop paying and tell you he can't afford the upfront cost of getting a new place while paying you, even with that $3k. He is then going to tell you he's having a hard time finding a place and he needs another 2 weeks, then a week, then he stops answering again. In the end, this will probably end with you having to file for eviction and losing the sale. When you get the property back it will be destroyed. If you give him the $3k it has to be after he is out and the property is inspected, doubtful he will agree to that. I would have the management company file for eviction immediately, have the management company give 24hr notice and go inspect the place and take pictures of everything. After that it should all be on the management company. It is their screw up and their problem to fix, they tell you when he is out and hopefully it is soon enough to get to get the new family in.

2 Reply

Alan Dunlap

Rental Property Investor · Chicago, IL · Member since 2018 · 89 posts · 77 votes

6y

@Asia Jones

Believe it or not, things could be worse:

Man, 93, shoots property manager over water damage https://www.bbc.co.uk/news/world-us-canada-51041426

0 Reply

Ola Dantis

Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes

6y

Originally posted by @Shelleman Paulin:

@Ola Dantis @Joe Splitrock

This family member sounds like an opportunist. Even with a solid promissory agreement to move out after receiving cash for keys, what’s to stop him from holding out longer and demanding more money or being more of a nuisance to the OP?

What would be her most viable option after afterwards with the least financial impact?

I agree with others who gave strong warnings against renting to family members.

There’s some really great advice in this thread. Thank you guys.

Needless to say that this cousin is worse than an opportunist!

That said, in business, and life, it is best to deal with things fast and effective than drawing it out unnecessarily, causing more pain and stress along the way.

If the Pm and the owner all go there to the house, give the cash, and get the cousin to sign on the spot I'm certain the cousin would leave probably to go on a shopping spree and a drunken fiasco.

Remember, the motivation for the cousin here isn't to stay in the house, it is that he wants MONEY, a major driver for this kind of behaviour, out of the deal.

Real Estate Investing is part psychology and understanding human behaviour. Fascinating stuff!

1 Reply

Oleksandr IvanovskiyPro Member

Rental Property Investor · Member since 2019 · 124 posts · 38 votes

6y

@Asia Jones

What is on the paper?

If you both signed lease with the wrong date then unfortunately he is in the clear.

However if property management made a mistake it’s on them and you can hold them liable.

0 Reply

Asia Jones

OP

New to Real Estate · South TX · Member since 2013 · 45 posts · 15 votes

6y

@Isaac S @Jared Shoemaker @Edy Lagares @Michael King @Joseph ODonovan @Marian Smith @Robert Nelson @Ola Dantis @Ian Walsh @Matthew Paul @Alexandre Marques dos Santos @Chris Ball @Shelleman Paulin @Michael Robbins @Joseph Walsh @Bryan Devitt @Alan Dunlap

Thank you everyone for all the great advice it’s helping me put things into perspective and giving my different angles on battling this issue. As things progress I’ll keep you all informed on this mess. Sad to say I offered to pay him the money he wanted and now he is refusing that and from what his mom “my aunt” says he’s not going anywhere. I am officially a top student in the School of Hard Knocks.

Also my signature is not on the lease agreement. My signature is only on the agreement between me and the PM company bearing the 02/01/2020 move out date.

1 Reply

Shelleman Paulin

Investor · Atlanta, GA · Member since 2018 · 18 posts · 16 votes

6y

@Ola Dantis

I agree with you. I have heard stories similar to this and presupposed a lot about the guy without simplifying his base motive-- which you did. I expect @Asia Jones will be able to resolve this situation and get the buyer into the property as scheduled. If anything, I've learned a few tactics from this thread that I hope to never need.

3 Reply

Asia Jones

OP

New to Real Estate · South TX · Member since 2013 · 45 posts · 15 votes

6y

Originally posted by @Brian Lucier:

There are three types of tenants I do not rent to.

Friends
Family &
Fools

No that thats is out of the way, let's focus on the issue at hand. I "hate" cash for keys and refuse to do it under any circumstances. This is because we have a rock solid lease and are very careful. It is unfortunate there was a error on the rental agreement. But it is in writing and a signed legal contract.

So, I would suggest:

1. Follow through with the 60-Day Notice that was sent to the tenant.
2. Do everything as legal as possible.
3. Follow the laws where ever this rental and potential sale is taking place.
4. Document everything in writing to prepare for your court date.
5. Make an additional copy to submit as evidence.
6. Only what you BRING TO COURT matters, forget about "he said - she said"
6. Prepare to spend more if you have to "move them out"

Or, write the check for $3,000

If it were me in this situation, I would write the check, put it in escrow with the closing attorney, and notify the tenant it is ready and waiting as soon as he goes and vacates the property – although I hate cash for keys.

We are looking at the sale of a property here were you could potentially put hundreds of thousands of dollars in your pocket. I know, I know, we are investors, and on "principal" the tenant is wrong, and you are right. But it that worth sinking the sale of a property over pride? Which is more important? Being right, or being relieved of the whole issue and moving on?

Perks to paying him.

1. It is tax deductible as a part of the closing costs.
2. It is a cost of doing business
3. It helps a family member which was your original intention
4. It allows you to sell the property
5. It allows you to move on

Tough love statement?
"Suck it up buttercup"

Please do not hate me for not having any filters. It is what it is. I know it is painful, but the tenant has a contract. If you do not pay him the $3K, you could end up spending A LOT more to move them out and put their stuff in storage (Massachusetts). Even worse, they have possession of the property and could destroy it on you. I hate the solution, but write the check.

If this is about being right - the tenant has a signed agreement to stay until May. This could cost a LOT more than $3K if you fight it.

Thank you so much for this, your list of perks is actually what made me break down and offer him the $3,000. To my surprise he is now refusing that and is adamant about staying in the house. Now its looking like I will have to spend more in the end and try to fight this thing out in court. One thing I think will help is that he made modifications to the property without my approval, has been smoking marijuana in the property and failed to obtain renters insurance all in which is stated as a violation per his lease agreement.

0 Reply

Joseph ODonovanPro Member

Property Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votes

6y

@Asia Jones Well Asia, if he refused CFK then start eviction proceedings immediately. I would strongly recommend engaging a landlord tenant attorney. Good luck.

3 Reply

Tenant demanding $3000 to move out

Tenant demanding $3000 to move out

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