Tenant check at lease signing has bounced !

General Landlording & Rental Properties
13yFollow

Tenant check at lease signing has bounced !

Andy K
Investor · San Diego, CA · Member since 2011 · 48 posts · 4 votes

Hi,

I would like some advice from experienced folks on the board about an urgent matter. I signed a lease with a tenant and at the time of lease signing, they gave me a check for the move-in funds. They got the keys and have moved in. Few days later I find out that the check has bounced! When I mention to them that they have not paid and should move out, they have not been co-operating. Its already been 12 days now that they are living in the home without paying anything.

My question is, what can I do now to get them out of the home? Since bouncing a check is a crime, can I report it to the local police department or the DA's office? Since the move-in funds were not received, is the lease in default now?

I accept that we did make a couple mistakes in going with these tenants. One was not running a thorough screen on them before lease signing. Now we find out that the tenant has a past eviction and also a theft felony on her record few months ago. Another mistake was getting in the move-in funds with a personal check and giving them the keys before we know the check has cleared. Won't be repeating these mistakes again.

Looking for advice going forward about what I can do to get them out of the home at the earliest possible. Thanks for your help.

0Reply
102 views

Most Popular Reply

Steve Babiak
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
13y

What does the lease say about failure to pay rent on time? Usually, that leads to presenting a "notice to quit" - basically, pay up, or get out, or we will evict. You have to go through the eviction process now, since you have given this tenant possession of the premises. Since you are so new, you should get yourself a good eviction attorney; I suspect that this tenant knows the game they are playing better than you do ...

4Reply
See this reply in the discussion

30 Replies

Jump to latestLatest
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    13y

    What does the lease say about failure to pay rent on time? Usually, that leads to presenting a "notice to quit" - basically, pay up, or get out, or we will evict. You have to go through the eviction process now, since you have given this tenant possession of the premises. Since you are so new, you should get yourself a good eviction attorney; I suspect that this tenant knows the game they are playing better than you do ...

    4Reply
  • Kathy Braschler
    Duplex Investor · Littleton, CO · Member since 2010 · 15 posts · 4 votes
    13y

    I agree with Steve. You need to start the eviction process. You can probably get the form and instructions for a 5 day notice for the county where your property is located by googling it. I had to evict my very first tenants too...it gets easier as you get better at picking tenants. Good luck.

    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    13y

    Start an eviction. You've just been had by a professional tenant! You can probably plan on this being drug out for as long as possible, perhaps several months. I'd recommend hiring a lawyer so you don't make any procedural mistakes.

    One full months rent plus the full deposit in cash or money order before the keys get handed over.

    3Reply
  • Randy F.
    Contractor · Anchorage, AK · Member since 2012 · 351 posts · 196 votes
    13y

    The way it is and the way it oughta be may be two different things, but it seems to me that the lease should not be brought to force or be binding until rent & security deposit is paid. The lease being made is contingent on that set amount being paid. A Landlord SHOULD be able to simply call the county Sheriff and have the trespassers/squatters removed!!

    0Reply
  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    13y

    Andy K it seems you have been played. I'm willing to bet that the "tenant" knew full well that their check would bounce when they gave it to you. They now have a free place to live until they get forced out, which could take a while. You'll wind up spending money to get evicted, then they'll move onto the next sucker.

    Two lessons learned:
    1. ALWAYS do a thorough background check. If you're not sure how, have someone do it for you.
    2. ALWAYS get the security deposit and first month's rent in cash, money order, or cashier's check. Never a personal check.

    Podcast Guest on Show #29
    1Reply
  • Robert Fabian
    Contractor · Rocky Point, NY · Member since 2013 · 14 posts · 1 vote
    13y

    I agree with Randy. Although I have had a few issues with tenants in the past, never so soon and without collecting a single dollar. Although all areas of the country have different laws, no money was ever paid! Good luck. Keep us updated.

    0Reply
  • Sandy Blanton
    Residential Real Estate Broker · Pensacola, FL · Member since 2012 · 221 posts · 49 votes
    13y

    Jon Holdman What Jon said, that was my first thought. My 2nd: hire a property manager and save yourself from Your Self. You've demonstrated you can't be trusted to be a property manager.

    In Florida we could have them dragged out by the Sheriff in 22 days or so. I have no idea about the CA laws.

    On that note, I've screwed up big myself before. Damn and good luck. *sigh

    0Reply
  • Johann Jells
    Rental Property Investor · Jersey City, NJ · Member since 2011 · 1k+ posts · 876 votes
    13y

    At least here in NJ, I believe that you need to be in a place for 30 days to have legal possession of it and protection by anti-eviction statutes. You need to know the legalities of your situation and fast. Common sense says that if they haven't paid a thing they're not in possession, but tenant law often makes no sense.

    0Reply
  • Ed O.
    Investor · Statewide, MO · Member since 2011 · 819 posts · 427 votes
    13y

    Andy K

    That sucks. Sorry to hear about your mistake.

    One last idea comes to mind: find out if passing a bad check is considered as a felony in your area and what amount it needs to be. Then, if the shoe fits, go to the tenant and tell them they can move out in 12 hours and have their check back, or that you'll be forced to present the info to the po-pos. It may be a last ditch shot, but if they already have a record and might be on probation, it could get the trick done.

    Another thing to keep in mind: have the incoming tenant put the utilities in their name AND VERIFY IT the day before they move in, so you don't get hosed there.

    Hope this helps.

    2Reply
  • Ben Skove
    Cincinnati, OH · Member since 2013 · 292 posts · 81 votes
    13y

    Amen to what everyone else said. While this person is probably judgement-proof, hopefully you did a picture/video walk-through with them at move-in so you can document any damage for small claims/"large claims".

    I don't have enough experience with this kind of tenant (yet) to say, but I wonder what other BPers would say about cash for keys from this person to avoid what may be a drawn out eviction process. I hate the idea of it, but it addresses the bottom line. On the other hand, if California is anything like Florida, Sandy Blanton has the right idea...out quick, and another eviction on their record to warn the next landlord.

    1Reply
  • Tevis Verrett
    Lender · Woodland Hills, CA · Member since 2013 · 364 posts · 115 votes
    13y

    Ugh Andy K, I am so sorry my CA Brother!

    You have gotten the best advice from our wise BP Brothers and Sisters, so let me add my .02

    1) What Ed O. and Steve Babiak said, and also see if the DA will file a criminal complaint on kitting checks.

    . . . and as wise Ben Skove has said about cash for keys.

    Yup, turns my stomach also, so. . .

    2) Cozy up to a motorcycle gang, and give them a one month lease plus $1000 schmoles. . . and sit back and giggle.

    Disclaimer: I am not in a motorcycle gang, and your mileage may vary!

    Tevis

    1Reply
  • Ann Bellamy
    Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    13y

    I'll admiit to having made the same mistake long ago. but never since!

    I took a personal check for their first month's rent, because they moved in on Christmas Eve. I gave them free rent for the one day of Christmas as a good will gesture.

    Their security deposit came from a local charity and their personal check bounced, so I never got a dime from them. The charity got taken too, because they trashed the unit. I made the mistake of letting them string me along for a few weeks before I started eviction, so they got me for several months while I waited for eviction.

    So I stopped making mistakes, and got a good real estate attorney for my first eviction. When we were in court, my attorney explained that if we came to an "agreement", then that meant they waived their right to appeal if they lost. He then went to the tenant and asked if they needed a little more time to find a new place to live. They said yes, so he said: If you pay $300 today, we'll extend our request for possession for an additional 10 days. They agreed. So instead of presenting our case to the judge (which we almost certainly would have won) my attorney stood up and said: Your honor, we've come to an agreement. So the judge allowed the agreement, and the tenant paid $300 for 10 days. I got $300 more than I would have, and got the writ of possession without any right of appeal from the tenant. They were out at the end of 10 days.

    A good trick if your state has a similar provision. don't try to do your eviction yourself, get a good eviction attorney.

    2Reply
  • Rob K.
    Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    13y

    In my state, it's a felony to write a check from a closed account. Not sure about short of funds.

    I'm guessing you have this check. I would take it to the bank on Friday and see if it's good. It's a long shot, but they might have direct deposit. It's possible you could clear out their account before the other checks that they have written clear.

    I agree with everyone else. Lawyer up and get these deadbeats out. In the future don't take personal checks. I always tell people when they move in that they need to pay in cash, money orders, or cashiers check. I let them know that I prefer cash and they won't have to pay for money orders or check fees if they bring cash. After they move in, they can pay their monthly rent in personal checks unless a check ever bounces.

    1Reply
  • Rolanda Eldridge
    Investor/Realtor · Hoover, AL · Member since 2010 · 1k+ posts · 459 votes
    13y

    Wow!! yes working the system..My first bad tenant was a family member, ouch....didn't move until the sheriff was coming to sit out...knew the system,,,Bought sense is better than borrowed and I payed for 3 months with this, BUT...I no longer rent to family...dust yourself off and keep it moving..get a good attorney and if working garnish for $$$

    0Reply
  • Matt Stoker
    Property Manager · Lehi, UT · Member since 2013 · 45 posts · 2 votes
    13y

    This is a fantastic reason to use a property management company. NEVER give keys until the check has CLEARED the bank. NEVER accept someone by "your gut". I did this years ago, and the tenant killed a child in my home!!! ALWAYS do a criminal and credit background check!!!

    0Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    13y

    On a closed account...felony turn it over to the DA.

    No consideration, no contract, you have a squatter, throw here out....I do like the motorcycle club idea, every landlord should be riding.....LOL

    Collecting certified funds for first rent and deposits avoids this, even so, I have had a bad check for the second month. I run bad checks the day after the first bounce, if that bounces, they owe fees and the check goes to the DA bad checks division. They then are on cash only or certified funds, no checks accepted, miss that it's time to evict....depends, intentionally missing or writing bad checks or a real mistake. :)

    1Reply
  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    13y

    forget the fact that the check bounced... they did not perform the background check correctly. if they had done that, they might have done things differently.

    thinking back, i remember accepting personal checks in the past, but luckily have not been burned like that.

    good luck and give us an update when you can.

    0Reply
  • Deborah BurianPro Member
    Rental Property Investor · Oklahoma City, OK · Member since 2013 · 1k+ posts · 412 votes
    13y

    Can't resist a funny story from years ago. Evicted a tenant who had been referred to us by their cousin. Went to said cousin's house... evicted tenant was living in the garage. Evicted everyone. End of story. We all have a tenant(s) we learn our trade from, you are now your own guru on what not to do.

    0Reply
  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    13y

    Consider it an expensive lesson.......NOBODY gets keys without the full move in amount paid in cash or certified funds. I won't take a personal check for the move in money EVER.

    You'll have to evict them, they're living there so you have to go through the legal process to get them out.

    0Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    13y

    You HAVE to do the background checks and verify income on tenants.

    Just because someone has money doesn't mean they can pay the rent. They might have gotten an injury settlement and blow through 10k in 2 months. They pay you to move in and then bam they are broke again without a leg to stand on.

    I have also seen where they have the deposit and first months etc. but that is because they paid nothing to the previous landlord for months and months and months and are trying to move before the eviction shows up. The current landlord just wants them out and tells you they are model tenants and they hate to see them go........ : )

    Look a tenant in the eyes when you are interviewing them. If you ask a question and they look down and scratch their head or look up or away or are uncomfortable then they are concocting a story to tell or trying to hide something and give you a partial truth to an answer.

    Podcast Guest on Show #47
    NNN Invest53 Reviews
    WebsiteView Page
    1Reply
  • Matt Stoker
    Property Manager · Lehi, UT · Member since 2013 · 45 posts · 2 votes
    13y

    I agree with Joel. Going on "your gut", will get you in the gut eventually.

    0Reply
  • Ben Yoon
    Real Estate Investor · Brooklyn, NY · Member since 2013 · 26 posts · 2 votes
    13y

    I spent a few years working with a property management company (9 apartment buildings), a few years as a rental agent, and My mother evicted a commercial tenant from her residential home. So i know a little about this type of situation.

    We know there's no point in going back about the mistakes that we made, so I will address the situation at hand.

    The eviction process is going to be different in each state - due to the laws on the books. Even certain cities are different from other cities in the same state.

    When I knew I was going to include Real Estate (both local and across state lines), I purchased a low cost legal service. It continues to allow me to ask actual lawyers in any state about laws, including real estate. Obviously, this is handy in local real estate and across-state lines real estate.

    They walked me through the eviction, from Notice to Service to filing, and re-claiming the premises. They helped us by reviewing the contracts to an out-of-state REO-short-sale, and helped us avoid what could be a very costly and time-wasting agreement. They also helped us with non-real estate things as well. Theorteically, they could even help me before I let a tenant in by guiding me through the safeguards before I hand over the keys - since that is a legal transaction.

    So, for you - every road you take will lead to some sort of legal action or question, I think. The only question is how much you spend and where you are getting your answers from.

    0Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    13y
    Originally posted by Steve Babiak:
    What does the lease say about failure to pay rent on time? Usually, that leads to presenting a "notice to quit" - basically, pay up, or get out, or we will evict. You have to go through the eviction process now, since you have given this tenant possession of the premises. Since you are so new, you should get yourself a good eviction attorney; I suspect that this tenant knows the game they are playing better than you do ...

    Andy -

    Steve gave you the best and simplest advice (not discounting any of the other responses). If you have not engaged an eviction attorney, do so immediately. Allow them to handle this and get it done as soon as possible. Without knowing what is or is not in your lease, you really need to get in front of an attorney fast so they can begin to help you get this taken care of.

    Podcast Guest on Show #224
    REI Nation4.577 Reviews
    WebsiteView Page
    1Reply
  • Andy K
    OP
    Investor · San Diego, CA · Member since 2011 · 48 posts · 4 votes
    13y

    Thanks everyone for the great help and advice on this topic. We hired an eviction service and gave the tenants a 3-day notice few days ago and filed for their eviction yesterday. Just got a text from the tenant that they received the eviction papers today and are telling me they will move out of the home by Wednesday and would like to hand the keys to me.

    The eviction company I am using is closed on the weekend, hence I cannot consult with them till Monday morning. What will happen if the tenants hand over the keys to me by Wednesday? Does it mean that the eviction case on them has to be dismissed and the eviction will not appear on their credit? Thanks for your help.

    0Reply
  • Andrea M.
    Real Estate Investor · Hampton, VA · Member since 2012 · 562 posts · 109 votes
    13y

    Start the eviction process, I never accept a check especially at move in..maybe later down the line once I build a relationship with the tenant. With my experience once you send serve the Pay or Quit..they usually pay or leave.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free