Rental Property Investor 路 Lehi, UT 路 Member since 2019 路 13 posts 路 6 votes
I purchased a Duplex with an inherited tenant that signed a 7 year lease expiring October 2021. The property closes next week, and i find out today that the tenant is also purchasing a home, and he will be vacating the property, ultimately breaking the lease. Would it be ethical, and lawful as a Landlord in my position to Keep the Security Deposit? The unit is also distressed, and needs a makeover, i just cant prove he caused the distress. Property is located in NJ. Any Suggestions, stories, etc are greatly appreciated!
@Gabriel E. Galloza It depends. While the lease is up in Oct, it was a 7 year lease and you are buying the property. If he gave 30 or 60 days' notice as per the lease, I would charge him for cleaning and any obvious damage (hole in the wall). If he did NOT give proper notice, then he is responsible for rent for that period of time-eg if he gave 14 day's notice and 30 is required, he owes for 16 days of rent.
Sept will be easier to rent than Nov and if you need to do renos to the property, even if they are cosmetic; it is a good time to do it. Plus it will rent for more, and I'm guessing it was below market value, and you get to pick your own tenant-lots of good things in there.
Flipper/Rehabber 路 Indianapolis, IN 路 Member since 2019 路 24 posts 路 7 votes
6y
@Gabriel E. Galloza it is my thoughts that it would be extremely hard to prove damages if the matter had to go to a damage hearing for collections. You would need to provide pictures at move in and any documentation of the conditions of the house.
I would suggest charging the SD for the normal cleaning trash and any account charges. You can then move forward and get a good tenant馃槉
@Gabriel E. Galloza It depends. While the lease is up in Oct, it was a 7 year lease and you are buying the property. If he gave 30 or 60 days' notice as per the lease, I would charge him for cleaning and any obvious damage (hole in the wall). If he did NOT give proper notice, then he is responsible for rent for that period of time-eg if he gave 14 day's notice and 30 is required, he owes for 16 days of rent.
Sept will be easier to rent than Nov and if you need to do renos to the property, even if they are cosmetic; it is a good time to do it. Plus it will rent for more, and I'm guessing it was below market value, and you get to pick your own tenant-lots of good things in there.
Rental Property Investor 路 Lehi, UT 路 Member since 2019 路 13 posts 路 6 votes
6y
@Dusty Ackerman It is my intentions to let him go, im Debating giving him the security deposit since he broke the lease, and there are some damages to the unit (i cant prove it was him).
@Earline Caudle It is to my understanding that the previous owner renovated the kitchen in 2018 (as per MLS) and the renovation happened during the tenants lease. Im going to deduct all obvious damages caused by the tenant and return the remainder deposit.
@Theresa Harris Why is September easier to rent then November? I obtained the property below appraised value and has the potential to convert into a triplex. Im definitely picking out my own tenants once he leaves, and started vetting out people as of now so come time when he leaves, ill have someone lined up.
Flipper/Rehabber 路 Indianapolis, IN 路 Member since 2019 路 24 posts 路 7 votes
6y
@Gabriel E. Galloza sounds like you are on the right track!!! Also August n September are great months for leasing because a lot of families move in that time frame. It鈥檚 right before the start of the school year and before winter hits馃槉 which here in Indiana can mean lots of snow!
Investor 路 New Orleans, LA 路 Member since 2014 路 1k+ posts 路 944 votes
6y
With inherited tenants, I base my purchase price on the condition of the property during my inspection. I don't put myself in the position of having to "prove" what is/isn't tenant damage. It's damage. Period. It goes into my rehab analysis and I base my purchase price accordingly. Inherited tenants then start "fresh" with their security deposit, with me. Plus, I will then have pictures of what the property looked like around my purchase date. So any tenant-related damages AFTER that, can be subtracted from the security deposit because I will have the picture proof.
Real Estate Agent 路 Virginia Beach, VA 路 Member since 2012 路 2k+ posts 路 1k+ votes
6y
If the property doesn't close until next week, can the current seller or management company give you the list of issues he feels tenant would be responsible for at move-out, things that are not normal wear and tear? This may be already addressed in your contract. Make sure you follow landlord/tenant laws regarding security deposits -- interest, notice time limits, etc. If the tenant vacates early and you don't find another qualified tenant immediately, you can likely keep deposit for unpaid rent, anyway, but I believe it must be itemized and notice sent within proper time limit.
Flipper/Rehabber 路 Indianapolis, IN 路 Member since 2019 路 24 posts 路 7 votes
6y
@Lynn McGeein this as well is a good way to handle damages in a transfer of ownership! @Gabriel E. Galloza I would add...ensure the seller can provide the move in inspection and (or) date stamped pictures from time of move in. In a damage hearing you must have documentation and pictures from time of move in. The seller could provide you a list and you could start at your inspection of the unit. But remember the Judge will need to see proof explaining exactly why you are charging the tenant for any and all damages.
Property Manager 路 Alpharetta, GA 路 Member since 2018 路 163 posts 路 117 votes
6y
I wouldn't want to start the wonderful adventure that you're on with negativity and a battle. I'm sure you were probably counting on a nice long term tenant getting the cash-flow coming in quick. I'm sorry that's not the case now. Charge for what you can in your state that's reasonable, actual damage beyond NWT, charge for a clean or trashing out any junk and then move on and focus forward.