Tenant didn't sign lease

Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes

Hello team,

I acquired an 8 plex about a month ago. The in place tenants were month to month. We drafted a new lease with a rent increase and instructed the tenants to return the signed leases by Jan 1st. I have one tenant, who went ahead and paid the increased rent, but hasn't returned the lease. I have text her, called her and left a voice mail on Jan 1 telling her that she would be considered month to month at a higher rate, but no response.

How should I proceed? I am fully aware that she can't just stay in place with no lease. That scenario seems less than ideal. Let me know. Feel free to let me have it. Thanks.

3 Reply

48 views

Most Popular Reply

Max T.

Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes

Originally posted by @Nik Corbaxhi:

Originally posted by @Ryan Proffit:

@Nik Corbaxhi I agree with that. Looking for some advice to move forward.

Try visiting her and knock on the door. While tenants don't like unexpected visits, especially from the landlord, you have exhausted all communications channels with no luck. Once you get her in person, then ask for the lease agreement that you have not received yet and if she dances around it (I would expect she would), then straight up ask her if the rent increase is the issue and how you can work with her, if you want to retain her. If not, just state that if there is no contract, you will have to start showing the property to potential tenants as you want to have lease agreements for 1 year instead of month to month. At this point you can end the month to month at any point, as long as you give her enough notice (usually 30 days in advance).

I'll add to that - bring a spare copy of the new lease and a copy of your 30 day notice just in case.

6 Reply

See this reply in the discussion

43 Replies

Jump to latestLatest

Sort by

Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Mindy Jensen thanks very much Mindy, i will give this a shot. I really appreciate your input.
0 Reply
Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Ralph R. Well my steak appraised at an 8.5 market cap, with meat prices sitting 1300 per month below the meat market price. So I don’t want to mark it down, because that would leave tons of meat sitting around to spoil.
0 Reply
Ralph R.
Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
6y
@Ryan Proffit. What that poster and I are saying your best loss is to terminate that tenant now and move on. Your best loss. Has nothing to do with cap rate or the value of your deal. Cut the loss now and renovate or whatever your doing and move past it. RR
1 Reply
Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Ralph R. Ok, it seemed like you were saying to give her cheap rent to avoid losing her.
0 Reply
Ralph R.
Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
6y
@Ryan Proffit At no point did I say raising the rent is wrong. There are methods that can be used that make it easier to swallow for the tenant. Everybody on here has suggested ways to deal with one of these tenants. Nobody has suggested leaving rent alone. I suggested that the method you were using was going to cause trouble. That’s all RR
0 Reply
Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Ralph R.understood. At the surface it probably seems like I came in and just jacked the rents up, but we asked tenants what their concerns were at the property are. And we have taken steps to improve the property. Many improvements are planned, and we have told them that with improvements, that rent increases will also come. I don’t deny that I am new to this, but I have been researching this, as well as talking to as many investors as possible to find a happy medium. Thanks for the advice as always. This thread has giving me a move forward plan.
0 Reply
Robert Lei
Member since 2019 · 22 posts · 9 votes
6y
@Ryan Proffit
I am flying C17s out of Charleston, SC, where I also invest in.
1 Reply
Jill F.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
6y
Send her an email (or letter or whatever notification your state/muni requires for rent increases) that says she needs to sign the attached intention to move out in 30 days notice or sign the attached lease. Failure to sign either document will result in a monthly rent increase of $20 each month until you receive a signed lease or move-out notice. (I hate it when people ignore my requests for written documentation).
2 Reply
Michael Robbins
Property Manager · Henderson, NV · Member since 2018 · 501 posts · 317 votes
6y
I would send a certified letter and post the letter on the door. Make sure to include the new rental rate and date the lease must be signed by. If the date comes and goes then send another certified letter (30 day notice) and post on the door. Each State is a little different so of course consult an attorney.
1 Reply
Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Robert Lei awesome, I was an Aerial Porter for 18 years, I’ve loaded tons of stuff on that bird. Love Charleston SC. I want to move there some day.
1 Reply
Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
Originally posted by @Jill F.:
Send her an email (or letter or whatever notification your state/muni requires for rent increases) that says she needs to sign the attached intention to move out in 30 days notice or sign the attached lease. Failure to sign either document will result in a monthly rent increase of $20 each month until you receive a signed lease or move-out notice. (I hate it when people ignore my requests for written documentation).

Solid gold, I am glad my rookieness has gotten a lot of responses on this post. I think I am going to give this a shot. I appreciate your time.

0 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
6y
One mistake I think you made: the 3 month lease. No reasonable tenant wants to sign a 3 month lease. Anyone who thinks that short term is fine being on month to month.
When we want to give a tenant the option to re-up, we usually charge a 10% premium if they want to go month to month. Good tenants, we usually just let them slide into month to month and don't worry about it. But some tenants like the security of a 1-year without any increases, so we offer those too for good tenants. Unstable ones or tenants I suspect might leave in December, if they don't want to sign a lease that gets us to good weather we add the premium; this way, if they leave after Thanksgiving we've covered the extra vacancy a little bit, as December-February are hard months to fill.
Podcast Guest on Show #243
Skyline Properties
View Page
2 Reply
Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@JD Martin I agree, next round we will do something different.
1 Reply
Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@JD Martin in all honesty, there was maybe 2 tenants who should have been put on long term, and the rest should have been month to month. We would like to turn most of the units around, but of course, don’t want them all empty at once. I guess I will have to make some lemonade. We secured a good deal, I just need to get the leasing situation down better.
0 Reply
Jonathan R McLaughlin
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Ryan Proffit I’m struggling to find an actual problem here. This is a tenant you ultimately want out, she paid your rent increase and is now month to month which gives you a good deal of flexibility in both your rental rates and giving notice.
Seems to me she did u a favor?
0 Reply
Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Jonathan R McLaughlin I wouldn’t say I ultimately wanted her out. She paid on time, and kept her place clean, and it’s the middle of winter. I do agree with you though. It’s a pretty cut and dried solution to just have her head down the road. I also posted in case I ever have someone try this in the future. I plan to use this post to put systems in place so next time I can just take decisive action. Thanks for your reply.
0 Reply
Ryan Proffit
OP
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Jill F. I hit her with an email, as well as a certified using your advice. She called the next day and signed it. Thanks for everything.
2 Reply
Joseph Hammel
Rental Property Investor · Lake Hallie, WI · Member since 2015 · 292 posts · 144 votes
6y
I didn't read all the replies but I would send a strongly worded text/ email or even better certified letter stating that if they don't sign then you will be starting the eviction process in 5 days or whatever time you need for proper notice. You need to set the tone, your the boss now and if they don't like it leave! If you don't they will be ghosting you all the time. I tell a non responsive tenant that I'm expected to reply when they have repair issues and they need to respect you as well.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.