Tenant check at lease signing has bounced !

General Landlording & Rental Properties
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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.

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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 ...

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

    Hi Andy, sorry about your situation! Evictions usually don't show up on a credit report unless you win a judgement.

    On the flip side, when I do my own background check on a tenant with the county clerk's records all of their cases come up, even those that were dismissed. While the potential tenant may have a good reason why they had to go to court, I see it as a huge red flag if a former landlord had to go to the trouble and expense of filing against them. So even if you don't get the satisfaction of having it show up on their credit report, it will make it harder for them to rent from reputable landlords.

    2Reply
  • BJ Butler
    Investor · Virginia Beach, VA · Member since 2016 · 22 posts · 6 votes
    9y

    Although I did not start this post, I thank EVERYONE for their comments. I too, have learned a valuable lesson as I just moved in tenants for the 1st time & accepted personal checks. They gave me half of the security deposit to hold the place w/ a check and it cleared. However, the rest of the checks on move-in day, did not. I've gathered enough information from all the comments to know what I need to do next. The one thing I feared came upon me. Now that I had to face it, I can move past it and move forward!! Thank you Biggerpockets family.

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    9y
    Originally posted by @Andy K:

    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.

    It's been a few years now - can you tell us how this played out, and did they cause damage?

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  • Jon Lanclos
    Real Estate Broker · Houston, TX · Member since 2017 · 64 posts · 27 votes
    9y
    Also, get VERY familiar with the property code in your state - you should know how many days it will take to evict - you should know the process backwards and forwards - if they are a minute late with their rent in Texas I put a 3 days notice to pay or quit on their door - know what you can and cannot do to tenants who don't pay - you maybe breaking the law if you take their stuff or turn off utilities - get friendly with a local attorney and small claims courts - do your due diligence and learn the process now - review your lease agreement and see if it can be strengthened - good luck
    0Reply
  • Jim Cummings
    Residential Real Estate Broker · College Station, TX · Member since 2013 · 1k+ posts · 969 votes
    9y

    Suggest you ONLY Accept MONEY ORDERS / CASHIER'S CHECK for Security Deposit & First Month Rent. After that you can accept whatever works for You, Cash, Personal Check, etc.

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