Tenant Cousins - One moved out, Another moved in

[Mike Hoefling]

I have an interesting question, I am not really sure it is a problem but I do want to make sure I am properly documenting this unique situation. It may help to ask this question to an attorney in my area.

I took ownership of the property on 6/17/13, last week. During that time I had Tenant #1 living there, since then I have come to find out that Tenant #2 had moved in with his belongings, furniture and all. Tenant #1 took his belongings (minimal) and has left the area/State. Tenant #2 has paid me rent for June 13' when I met him yesterday and is willing to sign a lease and pay me on July 1st for July rent.

Even though this was not the proper way to handle this on their end, I don't know that Tenant #2 would be a bad tenant, unusal maybe.

PLAN
My question is what do I do about the secuirty depoist from Tenant #1? Since he bailed do I keep that? I will be issuing a letter to Tenant #1 at the last known address stating that his lease (month to month) is terminated.

I will have Tenant #2 fill out a rental application and I will proceed to run a background check and contact previous landlords. Depending on what happens with Tenant #1 security deposit I may have to require Tenant #2 provide me a secuirty deposit.

Any help on how to move forward with this unique situation is greatly appreciated.

Mike