Inherited tenant from hell

Inherited tenant from hell

Real Estate Investor · Glenwood, IL · Member since 2015 · 84 posts · 22 votes

Hi all! I purchased a duplex in Chicago and inherited the tenant from hell. She is running a daycare out of the unit, she has a cat and a dog, her girlfriend clearly lives there with her, she puts her garbage on the back porch instead of taking it out, her girlfriend smokes so much that you can smell the weed in the common area, and she NEVER pays her rent on time. These are all breaches of her lease. The first rent payment that was due to me after purchase was paid over a month late, the second was a month late, the third was 6 days late, and this month's is 10 days late now.

I was waiting until I got a tenant in the other unit before I tried to evict her. My new tenant just moved into the other unit yesterday but unfortunately we can't evict in Chicago right now due to Corona.

What advice do you have for me? What should I do and in what steps? Will me waiting so long to try to evict for anything other than rent make it harder for me to evict her? I was waiting until I could afford to do so. I didn't want the building to be completely empty and have to pay the mortgage out of my pocket.

Also, I spoke with the previous owner who sold the building to me and he said that she never paid her rent to him on time either and she also put holes in walls twice. She has no security deposit left because she used it up on her rent before he sold the building to me. Her lease isn't up until September 2021. The previous owner had given her a 3 year lease because she was his daughter's friend.

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Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
6y

@Samantha P. I would offer some cash to leave peacefully. Maybe $2,000 and 2 weeks. All trash and belongings must be taken. I know you’d like to save the money, but put a price in peace of mind and bite the bullet.

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  • Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    6y

    @Samantha P. I would offer some cash to leave peacefully. Maybe $2,000 and 2 weeks. All trash and belongings must be taken. I know you’d like to save the money, but put a price in peace of mind and bite the bullet.

  • San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    6y

    First, you need to ask for her security deposit from the seller.  Did you agree to not having one when you bought the property?  Were you under the understanding that she had one?  Sellers don't get to let the tenants use up their security deposit for rent, and hide that from a buyer.

    I wouldn't worry about the fact that you've let her pay rent late.  Yes, technically, she could argue that you waived your right to get rent on time - but - she would need an attorney to argue that for her, and she's have to know she could.

    So, give her notice to pay rent or quit now.  She'll say she doesn't have to pay because of the virus, but the stay for evictions doesn't give tenants the right to not pay rent at all.  It just means the courts are closed, basically.

    As soon as the courts open back up for business, then you can file your eviction in the clerk's office.  

    It's much easier to evict based on failure to pay rent than the other violations.  But, I'd also serve her with a 3 day to correct or quit (or however it works in Chicago) for the other violations, too.  

    There is no break on other lease violations.  So, when the courts open back up, they can also hear your arguments that you should be able to kick her out for the violations she didn't fix while everything was closed due to the virus - like having another tenant not on the lease, for smoking, whatever.

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

    You cando cash for keys, or maybe try talking to them first. Let them know they are violating the lease and list the ways. See if you can get them to comply. Its worth a shot... if it doesnt work then try cash for keys. 

  • Durham, NC · Member since 2018 · 30 posts · 23 votes
    6y

    Wait until after the outbreak, when you can evict. Then give her the shove. Druggies are the absolute worst. 

  • Real Estate Investor · Glenwood, IL · Member since 2015 · 84 posts · 22 votes
    6y

    @Saj S.

    So just ask her if she'd like to get out of her lease and tell her that if she leaves she doesn't have to pay March rent?

  • Real Estate Investor · Glenwood, IL · Member since 2015 · 84 posts · 22 votes
    6y

    @Sue K.

    I knew when I purchased the building that there was no security deposit. The previous owner write a letter explaining that she'd used it up. The letter was given to me at closing. When I asked hee for her rent the other day(via text) her response was that she isn't getting paid because the world is shut down and that she has nothing. Her rent was due on March 15th. She should have gotten paid prior to the end shutting down. Her source of income is the daycare that she runs out of the unit which also smells like weed smoke.

  • Real Estate Investor · Glenwood, IL · Member since 2015 · 84 posts · 22 votes
    6y

    @Mary Mitchell

    I was thinking of typing her a letter explaining each clause that she is violating and tell her to fix them but then I realized...what's the difference between doing that and serving her with a fix or quit(or whatever it's called)?

  • Chicago, IL · Member since 2017 · 175 posts · 86 votes
    6y

    I had similar situation in back of the yards with a 2 flat.  It sounds like she isn't going anywhere into shelter in place is over. I would wait it out and then offer cash for keys.  She probably is gonna want a lot because this is her business.  

    I did $200 and paid $800 for movers.  You may need more. I'd make sure she signs something for accepting the money.

  • Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
    6y

    You’ve allowed this tenant to run your rental for 4 months and it’s clearly not working. Hire a lawyer, yesterday, and take their advice. Do nothing except listen to the lawyer.

    Only other option under these circumstances is to throw enough money at her for cash for keys.

  • Peoria, IL · Member since 2013 · 967 posts · 383 votes
    6y
    Originally posted by @Merle Svenson:

    Wait until after the outbreak, when you can evict. Then give her the shove. Druggies are the absolute worst. 

     Marijuana is legal in IL.  

  • Peoria, IL · Member since 2013 · 967 posts · 383 votes
    6y
    Originally posted by @Samantha P.:

    Hi all! I purchased a duplex in Chicago and inherited the tenant from hell. She is running a daycare out of the unit, she has a cat and a dog, her girlfriend clearly lives there with her, she puts her garbage on the back porch instead of taking it out, her girlfriend smokes so much that you can smell the weed in the common area, and she NEVER pays her rent on time. These are all breaches of her lease. The first rent payment that was due to me after purchase was paid over a month late, the second was a month late, the third was 6 days late, and this month's is 10 days late now.

    I was waiting until I got a tenant in the other unit before I tried to evict her. My new tenant just moved into the other unit yesterday but unfortunately we can't evict in Chicago right now due to Corona.

    What advice do you have for me? What should I do and in what steps? Will me waiting so long to try to evict for anything other than rent make it harder for me to evict her? I was waiting until I could afford to do so. I didn't want the building to be completely empty and have to pay the mortgage out of my pocket.

    Also, I spoke with the previous owner who sold the building to me and he said that she never paid her rent to him on time either and she also put holes in walls twice. She has no security deposit left because she used it up on her rent before he sold the building to me. Her lease isn't up until September 2021. The previous owner had given her a 3 year lease because she was his daughter's friend.

     are you zoned for a daycare? seems like her rent is late, but she's fully up to date except for being late this month? so you are having to float her rent a month. 

    Are kids still showing up?

    i would keep collecting.  Evictions cost money.  As does a rehab.  as does cash for keys.  & her place is probably already trashed as it's gonna be? As long as she kept paying just being a month late.

    Once evictions are possible, i would talk to her & say hey I need my rent on time EVERY month.  & figure out a way to communicate you might not be zoned for a day care.  tying rent on time to you not checking on a daycare being there. ..

  • Developer · Chicago, IL · Member since 2013 · 432 posts · 355 votes
    6y

    The security deposit part of the story may end up being a bigger problem than you're realizing right now. Even if I'm taking over a building with perfect tenants, I require that the previous owner return the security deposit direct. If your tenant demands their security deposit back, a letter from the previous owner stating that "she used it up", will not suffice...and there will be some big time fines associated with that.

    With that being said, I would ride out this virus before making any changes. Late rent is better than no rent for the foreseeable future.

  • South Holland, IL · Member since 2017 · 374 posts · 432 votes
    6y

    @Samantha P.

    If your finances are super secure I would not hip the “tenant from hell” that I want them gone. You have little to no leverage at this time. Creating unnecessary tension at this point would only make things worse for you.

    If they are paying late, accept the late payment with late fees (some money is better than none if your margins are thin now). Coax them into believing that you are ‘Cool and laid back.’ As soon as the County’s eviction moratorium is lifted I would immediately present them with a 5 day notice the 1st time they are late. Unfortunately, non-payment of rent is your best bet for removal or cash for keys. The other violations are a waste of time honestly. Good Luck.

  • Real Estate Investor · Glenwood, IL · Member since 2015 · 84 posts · 22 votes
    6y

    @Mike B.

    So in this case, what will suffice to show that she did use up her security deposit? And now I'm concerned that my lawyer let this slide at the closing table.

  • Chicago, IL · Member since 2017 · 175 posts · 86 votes
    6y

    https://bc-firm.com/chicago-se...

    You could be liable for 2x security deposit due to RLTO. That's why I like cash for keys better. 

    lawyer is probably $1000 in Illinois for eviction.  Then if they determine you still owe 2x security deposit it might be easier to just pay her. 

  • Attorney · Elmhurst, IL · Member since 2016 · 255 posts · 161 votes
    6y

    It's actually 3X of the deposit, plus attorneys fees

  • Attorney · Elmhurst, IL · Member since 2016 · 255 posts · 161 votes
    6y

    @Samantha P., hate to make matters worse, but this is another problem:

    "She has no security deposit left because she used it up on her rent before he sold the building to me."

    I hope that if you hired an attorney to assist you with the purchase, that you received a security deposit credit at the time of purchase and if not, you received some kind of written indemnity for now missing/used security deposit from the Seller.

  • Developer · Chicago, IL · Member since 2013 · 432 posts · 355 votes
    6y

    @Samantha P. not sure what can be done after the fact. I just know that they are very strict in regards to security deposits being placed in an interest bearing account. If you're off by just pennies in the way of interest, they can hit you with several thousand dollars in fines. It may not be too late to clean up the paperwork and get in front of it but I'd recommend that you speak to a lawyer in regards to that process. If you need a referral, I can PM you my lawyer's number for you to speak direct. 

  • Real Estate Investor · Glenwood, IL · Member since 2015 · 84 posts · 22 votes
    6y

    @Mike B.

    Yes please PM me. Thanks so much!

  • Real Estate Investor · Glenwood, IL · Member since 2015 · 84 posts · 22 votes
    6y

    @Vincent Incopero

    Im going to reach back out to my attorney and see what i can do. Thanks so much!

  • Princeton, NJ · Member since 2017 · 38 posts · 17 votes
    6y

    I would suggest against paying them off, you will only succeed in creating an even bigger nightmare for future landlords, and nobody needs that. Take them to task for violating the terms of her lease. At least the she will learn she has to play by the rules or get burned. 

  • Chicago, IL · Member since 2017 · 175 posts · 86 votes
    6y

    Please let us know how this turns out

  • Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
    6y

    @Samantha P.

    I’m going to use your post as a lesson for others since the answer to you would normally be terminate her lease and/evict ASAP, but you already passed that option.

    1. When purchasing and there is a poor tenant, have the seller deliver the unit empty and “broom clean” at closing.

    2. Never delay pay or quit notices and evictions.

    3. If you’re so extended your choices are either keep bad tenant or miss a mortgage payment, delay purchasing until you can afford to make a better decision.

    4. Security deposits are never allowed to be used for rent while a person is living there.

    5. When writing up your purchase agreement, you always ask for the full security deposits and prorated rent at closing. It does not matter what the seller says about security deposits. You make that as part of your purchase agreement. It also does not matter if the seller has even received the rents that month from tenant. The seller will pay you prorated rents for the month you close.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Anthony Wick:

    @Samantha P.

    I’m going to use your post as a lesson for others since the answer to you would normally be terminate her lease and/evict ASAP, but you already passed that option.

    1. When purchasing and there is a poor tenant, have the seller deliver the unit empty and “broom clean” at closing.

    2. Never delay pay or quit notices and evictions.

    3. If you’re so extended your choices are either keep bad tenant or miss a mortgage payment, delay purchasing until you can afford to make a better decision.

    4. Security deposits are never allowed to be used for rent while a person is living there.

    5. When writing up your purchase agreement, you always ask for the full security deposits and prorated rent at closing. It does not matter what the seller says about security deposits. You make that as part of your purchase agreement. It also does not matter if the seller has even received the rents that month from tenant. The seller will pay you prorated rents for the month you close.

    great advice.. proper reserves is simply a must to a landlord.  Also there was a lot of talk going around on how landlords were just going to TAKE the deposit as April rent if tenants dont pay.. I dont think they can actually do that in most states.. or at least there would need to be a written agreement amending the lease to NO deposit and tenant agrees to use the deposit for rent.. and landlord acknowledges they now have no damage deposit. ??? thats my thought

  • Member since 2019 · 6 posts · 4 votes
    6y

    @Samantha P.

    Wait? Is it even legal to run a daycare out of a rental unit? Is her daycare licensed?

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