New Investor| 1st time Investor | Eviction during COVID

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New Investor| 1st time Investor | Eviction during COVID

Kim Hud
New to Real Estate · Virginia Beach · Member since 2019 · 58 posts · 44 votes

Hey everyone, 
Just went under contract on my first rental that I will househack, a fourplex/4plex/quad in Chesapeake, VA, using a FHA 203kLoan. The house currently has tenants in each unit. My agent and I tried to get the seller to agree to delivering the property vacant but they wouldn't do it saying:
1) holidays coming 
2) COVID is happening so they want to the tenants to be ok
3) the tenants have been living there for a decade+ so the seller thinks of them as family and doesn't want to ask them to leave 
4) what if the deal doesn't go through and they are left with an empty property. 

We countered with them paying credit toward closing which they agreed. 

So my question is getting the tenants out when we close in December. Two reason I do not want to keep these tenants:
1) Their rent is way below market value ie some are paying $300 for rent
2) This is a rehab loan and I am fully renovating the place

The tenants are on a month-to-month lease and know that the property is being sold. The seller let the tenants know there is a possibility for them to be asked to move if the property is sold. 

My plan is to give the tenants notice at the time I take possession of the property that they must vacate the premise at the of their lease  (they are month-to-month) in on January 31st. 

Does anyone have any advice on how to do this properly?

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Account Closed
Investor · Fort Collins, CO · Member since 2020 · 6 posts · 10 votes
5y

Congrats on your new purchase!

I agree with Jon and of course its just my opinion. But don't evict them in December. It's the holidays. It's been an extremely difficult year for everyone and it's just not worth it. Your remodel can wait until 2021 it doesn't have to start on day 1. I would give them 45-60 days notice and deliver it to them when you take ownership in December. If you need one of the spaces to live in then offer one of the tenants a little bit of money to vacate early. Maybe a months rent or something. If they're not paying market rent then it's a small drop in the bucket but may mean the world to them. That way they leave when you need them to and you can sleep well at night. If they won't leave then you'll have to follow VA eviction rules and start your remodel once they vacate.

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  • Tim Herman
    Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Kim Hud what does VA landlord tenant law say. Do you have to give them 30,60,90 day notice. However long it is Send it to them with a tracking number. Also hand deliver or post on the door.

    1Reply
  • Kim Hud
    OP
    New to Real Estate · Virginia Beach · Member since 2019 · 58 posts · 44 votes
    5y

    @Tim Herman from what I found online “Month-to-Month Tenancy

    To end a month-to-month tenancy in Virginia, the landlord must give the tenant a 30-day notice informing the tenant that the tenancy will end at the end of the 30-day time frame. If the tenant has not moved out of the rental unit by the end of the 30 days, then the landlord can file an eviction lawsuit against the tenant. (Va. Code Ann. § 55.1-1253A (2020).)”

    0Reply
  • Tim Herman
    Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Kim Hud Are they allowing evictions in VA, if not you will have to build that into your costs of holding the property. What is the timeline for evictions in VA. My area it takes about 2 months after eviction is filed to get the sheriff to remove the tenants.

    1Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    5y

    @Kim Hud Seeing that you are new, I would not do anything without hiring an RE attorney, not done properly right from the start this experience could doom your LL'ing career. Evictions can be costly and the botched ones even more so. All the best!

    1Reply
  • Matt R.
    Blue Springs, MO · Member since 2015 · 481 posts · 313 votes
    5y

    I am not a lawyer and this is not legal advice.

    COVID or not, you have to follow the law.  You already found the Virginia state law.  Sometimes there will be city or county landlord-tenant law as well - usually in larger metro areas.  I don't know if the Chesapeake/Norfolk/Virginia Beach area is big enough to have those laws, but check the city and county web sites as well.

    Because of COVID-19, there is currently a nationwide ban on evictions for non-payment of rent, from the Centers for Disease Control (CDC).  The tenants have to file a declaration with the landlord that says they can't pay the rent because of COVID-19, and then the landlord can't evict them, at least until December 31, 2020.  A couple of lawyers that have spoken at recent real-estate investor meetings in my area (Kansas City) have said that they expect this ban to be extended into the first months of 2021 as well.  It is still possible to evict tenants for reasons other than not paying rent.

    Have you asked the seller if any of the current tenants have given them the CDC declaration?  If they have, it's probably a good idea to talk to a local real-estate lawyer about what to do.

    Some states have laws or executive orders in place that restrict evictions, more than what the CDC ban does.  Big cities or counties might also have orders from the mayor or health department that go further than the CDC ban.  Check your state, city, and county web sites to see what they say.

    There were some other nationwide eviction bans earlier this year, but my understanding is that most of those have expired now.  One consequence of that, though, is that sometimes a bunch of eviction cases got filed when the ban expired, which caused the courts to get behind.  Also, eviction cases filed early in 2020 were "on hold" because the courts were shut down, and now those cases are moving through the courts.  So, if you do end up having to file an eviction, it may take longer than usual for your case to go to court.

    I am not a lawyer and this is not legal advice.

    1Reply
  • Marita Jojo
    Rental Property Investor · Philadelphia, PA · Member since 2020 · 116 posts · 23 votes
    5y

    @Kim Hud we were in similar situation recently. After we closed we gave 30-45 days notice to end the lease but as per lease only 30 days were needed. Also, the tenants were not paying rent so gave 10 day notice filed eviction and got the possession.

    0Reply
  • Kim Hud
    OP
    New to Real Estate · Virginia Beach · Member since 2019 · 58 posts · 44 votes
    5y
    Originally posted by @Matt R.:

    I am not a lawyer and this is not legal advice.

    COVID or not, you have to follow the law.  You already found the Virginia state law.  Sometimes there will be city or county landlord-tenant law as well - usually in larger metro areas.  I don't know if the Chesapeake/Norfolk/Virginia Beach area is big enough to have those laws, but check the city and county web sites as well.

    Because of COVID-19, there is currently a nationwide ban on evictions for non-payment of rent, from the Centers for Disease Control (CDC).  The tenants have to file a declaration with the landlord that says they can't pay the rent because of COVID-19, and then the landlord can't evict them, at least until December 31, 2020.  A couple of lawyers that have spoken at recent real-estate investor meetings in my area (Kansas City) have said that they expect this ban to be extended into the first months of 2021 as well.  It is still possible to evict tenants for reasons other than not paying rent.

    Have you asked the seller if any of the current tenants have given them the CDC declaration?  If they have, it's probably a good idea to talk to a local real-estate lawyer about what to do.

    Some states have laws or executive orders in place that restrict evictions, more than what the CDC ban does.  Big cities or counties might also have orders from the mayor or health department that go further than the CDC ban.  Check your state, city, and county web sites to see what they say.

    There were some other nationwide eviction bans earlier this year, but my understanding is that most of those have expired now.  One consequence of that, though, is that sometimes a bunch of eviction cases got filed when the ban expired, which caused the courts to get behind.  Also, eviction cases filed early in 2020 were "on hold" because the courts were shut down, and now those cases are moving through the courts.  So, if you do end up having to file an eviction, it may take longer than usual for your case to go to court.

    I am not a lawyer and this is not legal advice.

    @Matt R. Great (non legal) advice to check out local laws that specifically pertain to COVID

    0Reply
  • Kim Hud
    OP
    New to Real Estate · Virginia Beach · Member since 2019 · 58 posts · 44 votes
    5y
    Originally posted by @Marita Jojo:

    @Kim Hud we were in similar situation recently. After we closed we gave 30-45 days notice to end the lease but as per lease only 30 days were needed. Also, the tenants were not paying rent so gave 10 day notice filed eviction and got the possession.

    @Marita Jojo Are you still in the process or is everything wrapped up?

    0Reply
  • Jon Morgan
    Rental Property Investor · Leavenworth, KS · Member since 2018 · 22 posts · 18 votes
    5y

    @Kim Hud this is just my opinion, but I do not agree with evicting people (after living in a place for a decade) on Christmas. Not many people move in the Winter.

    I know its just business. Give them some time.

    Do you have a property manager for this property yet. Can they speak with your tenants and get a better understanding on an individual basis what their plan is?

    1Reply
  • Kim Hud
    OP
    New to Real Estate · Virginia Beach · Member since 2019 · 58 posts · 44 votes
    5y

    @Jon Morgan no property manager. The first year I’m going to be the property manager.

    In terms of your thoughts on eviction I hear what you are saying. There are two major reasons why the tenants need to vacate:

    1. Doing an FHA 203k loan to gut and renovate the entire house

    2. Tenants paying below market value rent

    3. This will be my home too so I one of the units has to be vacant

    0Reply
  • Account Closed
    Investor · Fort Collins, CO · Member since 2020 · 6 posts · 10 votes
    5y

    Congrats on your new purchase!

    I agree with Jon and of course its just my opinion. But don't evict them in December. It's the holidays. It's been an extremely difficult year for everyone and it's just not worth it. Your remodel can wait until 2021 it doesn't have to start on day 1. I would give them 45-60 days notice and deliver it to them when you take ownership in December. If you need one of the spaces to live in then offer one of the tenants a little bit of money to vacate early. Maybe a months rent or something. If they're not paying market rent then it's a small drop in the bucket but may mean the world to them. That way they leave when you need them to and you can sleep well at night. If they won't leave then you'll have to follow VA eviction rules and start your remodel once they vacate.

    2Reply
  • Michael Robbins
    Property Manager · Henderson, NV · Member since 2018 · 501 posts · 317 votes
    5y

    I would make the closing contingent upon the property being vacant.  

    0Reply
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    I agree with @Account Closed that it is almost inhuman to give someone 30 days notice to vacate in December.  While my lease does allow us to give a tenant 30 days notice to vacate, the reality is almost no one can find a place, get organized, and save up enough money to get moved in 30 days. Add to this that in the winter there are almost no properties available for rent, and you are putting people in a real bind.  This said, tenants who lie, cheat, and steal I have no problem giving 30 day notice to.  

    If it’s not too late, I would suggest you identify the unit you want to live in and make the contract contingent on the seller giving notice to that one once all your contingencies lift. Once you are there, meet with them all and gather application data so you can see what their income is and how much they can afford. Then prioritize which ones can afford to stay if you raise the rent. Chances are you can get them paying at least the current lease amounts once you engage.  Then prioritize and give notice one by one, renovating after they leave, and getting the unit rented at market rent.  This will maximize your income during the process.  Sometimes the people you think you want out the worst end up having another tenant trump them with worst habits or worst payment history.

    757-472-2547
    0Reply
  • Sean RooksPro Member
    Rental Property Investor · High Point, NC · Member since 2017 · 272 posts · 304 votes
    5y

    I agree with @Patti Robertson, also hiring a PM for this transaciton would be wise, as you can following along in the process and see how it works. Then when you feel like you have a grasp on these difficult senarios you can self manage at that point if you would like. 

    0Reply
  • Kim Hud
    OP
    New to Real Estate · Virginia Beach · Member since 2019 · 58 posts · 44 votes
    5y

    @Patti Robertson spoke with my realtor and I was wrong we are not evicting them. The tenants are on a month to month lease that says I can give them 30 days stating that I am not renewing their lease.

    Once again I am doing an FHA 203k loan and my lender explained that we have 30 days from the close date to start construction and up to 6 months to finish construction. The contractors that are eligible for this loan also do not want to do the job piece meal nor do they want people living there during construction due to liability.

    0Reply
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    Aha. I missed the 203k part. 

    757-472-2547
    0Reply
  • Kim Hud
    OP
    New to Real Estate · Virginia Beach · Member since 2019 · 58 posts · 44 votes
    5y

    @Patti Robertson yeah that’s one of the biggest things. I think I could have been a little more flexible on move out date but based on the loan I’m getting this is the most prudent option.

    0Reply
  • Brooke Andrea
    New York City, NY · Member since 2017 · 43 posts · 174 votes
    5y

    @Kim Hud

    You can still evict right now under certain circumstances.  For instance if the tenants are damaging the home, or other items.  I think the eviction is only limited for payment related issues, but there are always ways around that!

    0Reply
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