Hey BP, need your sage advice please!?!

General Landlording & Rental Properties
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Hey BP, need your sage advice please!?!

Cory LucasPro Member
Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes

Purchased my first duplex on March 2 and it came with tenants currently occupying both sides. I currently have been able to get a lease signed with one of my tenants and rent collected for March with them.

The other tenant I’ve talked to via Facebook messenger multiple times, previous owner said that was the best way to get in touch with him, which I’m not thrilled about that as a communication tool, but I’m navigating that avenue as best I can with him.

I’ve tried to set up times to get together and go over the lease and collect his rent. I feel (and I’m pretty sure I am) getting the runaround in regards to him signing the lease and paying rent. Per his previous lease, late payments do not kick in until day 10 of being overdue.

I should probably preface with I’m not freaking out or anything and I’m perfectly ok with this being a hiccup. I certainly wasn’t planning on posting something like this and asking questions like this so soon, but it is what it is and now I just need to figure out how to best handle it most effectively!

My question to you all without dragging this out much more is, what do you feel my best course of action is?

I have a five day notice from my lawyer that I can use.

Do I just try and stop by and catch him at home? To try and find out what is going on and why he is reluctant to sign and pay? But I’m unsure of tenant rights on that one and just stopping by?

Or do I just serve him the five day notice and if he continues to not pay offer him $200 (his security deposit) to just get out of there?

Or do you all have other better thoughts?

Thanks in advance for the time and replies! Look forward to hearing from you all

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Jill F.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
6y

What, EXACTLY, does the current lease say regarding when rent is due? if rent is due on the first, regardless of the the length of the late fee grace period, then he is technically already in breach of the lease. Yay! Once he breaches the lease, then you are not obligated to honor the rest of the lease term; this is great news if the former owner had a sh*tty lease. I would let him know that because he is late he is in breach and he will need to sign my lease and pay the rent due, and if done promptly (by xx date)this one time I'd give him a pass on the late fee. If he failed to sign my lease, I'd 5-day him-- if you go this route do not accept any payment unless he actually signs your lease. Also, I would not sign a term lease with a tenant of this caliber, only m2m.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y

    @Account Closed  Put a  note on their door stating there is a new sheriff in town.  Outline your expectations and that you want a phone number to contact them and arrange for an inspection and a quick chat about rent payment and to answer any questions they may have.  You are early enough in the week to give them a few options for times this weekend.  There is a small chance that they paid the rent to the previous owner.

    1Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Theresa Harris no, rent was not paid to previous owner. Know that for certain

    Thanks for the insight, good thoughts

    0Reply
  • Michael Peters
    Member since 2019 · 215 posts · 122 votes
    6y

    His he's dodging your attempts to get this straightened out I would show up tomorrow, or whenever they are technically late, and request he sign and pay on the spot.  If not post a 3 day notice to cure or quit and charge late fees.  He needs to understand from day one what your expectations are if he is to stay.  Train your tenant before he trains you.  Good on you for not panicking but don't let that attitude lead to letting this go on for too long.  If you do have to go through the entire eviction process your most likely already out 1-1.5 months rent depending on how fast your county moves.

    0Reply
  • Jill F.
    Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    6y

    What, EXACTLY, does the current lease say regarding when rent is due? if rent is due on the first, regardless of the the length of the late fee grace period, then he is technically already in breach of the lease. Yay! Once he breaches the lease, then you are not obligated to honor the rest of the lease term; this is great news if the former owner had a sh*tty lease. I would let him know that because he is late he is in breach and he will need to sign my lease and pay the rent due, and if done promptly (by xx date)this one time I'd give him a pass on the late fee. If he failed to sign my lease, I'd 5-day him-- if you go this route do not accept any payment unless he actually signs your lease. Also, I would not sign a term lease with a tenant of this caliber, only m2m.

    4Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Michael Peters appreciate that man. Just trying to find out the best remedy and that’s what is sounding like the best way to go is unfortunately. Is what it is, I was optimistic about it. The previous seller had his hang ups with him, yet when I met him he seemed outgoing and was easy to converse with. Young kid, but I was giving him the benefit of the doubt. Is what it is I guess

    1Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Jill F. That is the kind of advice I love on here at BP! Thanks a ton for the reply and thought out info

    1Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Jill F. To answer your question, yes rent is due on the 1st. Then late fee if not paid after day 10

    0Reply
  • Jill F.
    Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    6y

    @Account Closed I see you're from Il, esp if you're in Chicago you should check with attorney about local rules, a breach would give you an opportunity for new lease here , but I've heard Chicago area is way more tenant friendly than Ohio so 'CYA' with attorney advice. Good luck in any event.

    2Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    If you bought the apt on March 2nd no rent is due you yet. Your prorated rent for march should of been on the closing statement and your first month with you collecting rent will be april 1 


    look at your closing document carefully to ascertain if you got credited rent and deposits 

    1Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    Also, if the tenants already have a lease with the previous owner that is the lease you get until it expires and only then can you sign a new one. 

    1Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Jill F. Yep, plan to call tomorrow. I was in email contact with them today, but before I go there to implement anything I plan to call them to make sure I’m clear on my course of action. Definitely appreciate all the advice and insight. Luckily no I don’t live in Chicago, good thought though

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  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Mary Mitchell no prorated rents were credited and I was operating under the previous lease, but it definitely sounds like there’s some good question to be raised as to best course of action since he may be in breach of it

    0Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    I have always been credited rent when closing mid month. I would contact Your agent and ask what happened. 

    Then I would notify both tenants that there is a new owner and give them the info on how to pay rent (if you haven't already). 

    I would ask my attorney who was responsible for rent collection as IMO march should of been on the closing statement 

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  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Mary Mitchell agent was the seller, no agent was technically involved. March 2 was Monday and he said they usually paid on Monday when rent was due on the 1st and it was the weekend

    I’ve reached out to them both via text and a letter giving them contact info and options and ways to pay as well. He definitely has the info, I emailed him the lease as well which per our conversation ended up being the way he preferred after he avoided meeting in person. I’m leaning toward showing up in person with a copy to have signed as well. Any other thoughts or tips? Appreciate the help

    0Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    he does not need to sign anything if the lease is not expired - the lease he signed is valid until it expires. 

    I would get on a call with your atty and ask them next steps 

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  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Mary Mitchell current lease shows “Tenant will be in default of the residential lease agreement if he/she 1. Fails to pay the full rent when due”

    So technically he’s in default, which should allow for breach of lease, correct?

    0Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Mary Mitchell goes on to say if tenant is in default landlord shall have the right to terminate this residential lease agreement by giving the tenant a 3 day notice

    0Reply
  • Maricell Hall
    Member since 2020 · 24 posts · 9 votes
    6y

    I agree with @Mary M. get the attorney involved asap. I was in a similar situation where I was been completely ignored and was not recognized as the new owner. They avoided paying rent for 3 months. I had to take them to court and evict them.

    1Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Maricell Hall sorry to hear that. Thanks for weighing in

    0Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    6y

    @Cory Lucas When you take ownership always provide them with a brief letter that outlines where they can send rent, where they can report maintenance requests, etc.

    Then prompt them to contact you so you can ensure you have their contact info. At that point is when I would discuss extending leases, rent payments, etc.

    If they do not contact you make a couple attempts to contact them by whatever contact info you have. If they avoid you past the 10th and rent hasn’t been paid I would serve them just so you can figure out what kind of person you are dealing with. If they don’t respond and don’t pay rent I don’t think they leave you any other choice.

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  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Michael Noto thank you sir, good insight. Sounds like I’m on the right path. To this point I’ve done the items you outlined, Except for the last pieces of course with regards to serving him notice. Sent them a welcome letter with all my contact info and I’ve offered multiple ways to pay as well as options in collecting it, including me coming down to collect.

    I guess at this point we will see if he pays today. I am due to stop by my other tenants residence tonight for another item of business, so I plan to knock on his door this evening to try and find out what’s going on if he still has not paid by the end of the day and see what we can do to move forward. I’m going to have my five day notice in hand if I need it. Hopefully I get the chance to speak with my lawyer as well today

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  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    Contacted my lawyer, he recommends serving him both a 5 day and 30 day at the same time. If he pays go ahead and get a lease signed, if not serve him the notice. Thanks everyone for the replies and advice. Any other thoughts, tips, or kind words are welcome too :)

    1Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y

    Laws vary based on location.  I am not a lawyer and mostly only know the laws as they apply to the area of our rentals.  A local RE attorney should have local RE law expertise that puts my knowledge on that market to shame.

    We have similar language in our lease and the majority of the tenants treat the days between due date and late fees imposed as setting a later rent date even though the intent was this be margin for emergencies, etc. (a grace period).  We consider the rent late at the end of the grace period even though the lease states rent is due on the 1st (due to the grace period).

    If the previous LL accepted this and never considered it late when submitted prior to the end of the grace period, you may have issues changing the rules regardless of what the lease indicates.  

    If tenant pays prior to the 5 day notice, I see no way that he will be required to sign a new lease.  He has a lease.  If he makes the payment on that lease that is accepted, I know of no jurisdiction that would consider the current lease void.  This would be true even if you refused to take the payment because during the notice period the tenant is allowed to pay what is owed (payment plus penalties) to avoid eviction.  Be leery of accepting partial payment.  Many jurisdictions treat a partial payment as resetting the clock on the eviction.

    I would have waited until the 10th to see if payment was submitted before the end of the grace period.  If not submitted, and in the absence of any communication, I would have proceeded as you have with starting the eviction process.

    Good luck

    0Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Dan Heuschele that is actually exactly my plan! As we speak I am currently headed home to get said 5 day and 30 day notices typed up and I will be stopping by his residence tomorrow to try and find out what’s going on. Definitely plan to be nice and hopefully he pays, but if not he will be getting served 5 and 30 day notices Per my lawyers recommendations!

    Thank you very much for the insight and the kind reply. Much appreciated

    0Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    6y
    Originally posted by @Account Closed:

    Purchased my first duplex on March 2 and it came with tenants currently occupying both sides. I currently have been able to get a lease signed with one of my tenants and rent collected for March with them.

    The other tenant I’ve talked to via Facebook messenger multiple times, previous owner said that was the best way to get in touch with him, which I’m not thrilled about that as a communication tool, but I’m navigating that avenue as best I can with him.

    I’ve tried to set up times to get together and go over the lease and collect his rent. I feel (and I’m pretty sure I am) getting the runaround in regards to him signing the lease and paying rent. Per his previous lease, late payments do not kick in until day 10 of being overdue.

    I should probably preface with I’m not freaking out or anything and I’m perfectly ok with this being a hiccup. I certainly wasn’t planning on posting something like this and asking questions like this so soon, but it is what it is and now I just need to figure out how to best handle it most effectively!

    My question to you all without dragging this out much more is, what do you feel my best course of action is?

    I have a five day notice from my lawyer that I can use.

    Do I just try and stop by and catch him at home? To try and find out what is going on and why he is reluctant to sign and pay? But I’m unsure of tenant rights on that one and just stopping by?

    Or do I just serve him the five day notice and if he continues to not pay offer him $200 (his security deposit) to just get out of there?

    Or do you all have other better thoughts?

    Thanks in advance for the time and replies! Look forward to hearing from you all

    Your post doesn't say whether or not you sent a letter indicating there's a new owner to every tenant in the building. If you didn't send a certified letter to the tenant, followed by a 5-day notice. Stop communicating with him via Facebook messenger. All future communications should be through methods where you can document delivery and receipts of your communications  Regarding cash for keys, $200 isn't very much. Nevertheless, whatever you offer make sure the other tenants aren't aware. The next thing you know you'll be paying everyone.

    312-681-7487
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