Removing tenant on MTM after acquiring rental property

11 Replies | Chicago, Illinois

Firstly I’m new to this so any advice or help would be amazing! I recently acquired my first a rental property two weeks ago with tenants who were  on a month to month lease. I physically delivered a 30 notice to end the lease for two tenants because their apartments need a complete renovation. The tenants who I want to leave are extremely messy leave things in the front area of the property and the rear and their units are just a disaster.

The tenants said they won’t accept the notice and would call their lawyers and report us to the city since there are so many things that aren’t to code including an illegal basement that we inherited and we didn’t exactly want to kick out the tenant down there.

since they wouldn’t accept the notice I made a recording showing the notice the property and folded the notice and put it in their door so that I could prove it was delivered. 

I’m pretty sure they will wreck the place even more after leaving. But concerned with what will happen if t he city is called etc. Also I haven’t given these tenants a lease or any contracts but i assume I inherit the month to month lease? in Chicago I’ve read that with a month to month all you need is 30 day notice. I gave this notice in the middle of their month to month lease. 

I guess I’m what the worst case scenario could be. I think if he reports me to the city I have more of an argument to kick the guy out but I really don’t want something long and drawn out and don’t want the city coming to cite me with violations. 


Originally posted by @Francis Doherty :

Firstly I’m new to this so any advice or help would be amazing! I recently acquired my first a rental property two weeks ago with tenants who were  on a month to month lease. I physically delivered a 30 notice to end the lease for two tenants because their apartments need a complete renovation. The tenants who I want to leave are extremely messy leave things in the front area of the property and the rear and their units are just a disaster.

The tenants said they won’t accept the notice and would call their lawyers and report us to the city since there are so many things that aren’t to code including an illegal basement that we inherited and we didn’t exactly want to kick out the tenant down there.

since they wouldn’t accept the notice I made a recording showing the notice the property and folded the notice and put it in their door so that I could prove it was delivered. 

I’m pretty sure they will wreck the place even more after leaving. But concerned with what will happen if t he city is called etc. Also I haven’t given these tenants a lease or any contracts but i assume I inherit the month to month lease? in Chicago I’ve read that with a month to month all you need is 30 day notice. I gave this notice in the middle of their month to month lease. 

I guess I’m what the worst case scenario could be. I think if he reports me to the city I have more of an argument to kick the guy out but I really don’t want something long and drawn out and don’t want the city coming to cite me with violations. 


Don't waste any time stressing over what the tenant may do. If I had a nickel for every time a tenant threatened to sue me, I would have hundreds of nickels. Seriously, most of them are empty threats from people that can't figure out how to build a personal budget or balance a checkbook.

30 Day Notice can be served on any day of the month and then the clock starts ticking. Wait a couple weeks and see if they agree to leave. If they won't commit or cut off communication, hire an attorney and be prepared to file for eviction on day 31. Once they see you mean business, they will usually scurry off to some other pushover Landlord and you can focus on other things.

 

I don't see any case from the tenants side to come after you. You own the property, you inherited a month to month lease and you are allowed to not extend and you are allowed to end a lease based on the state of the apartment. I would still consult a lawyer for evictions and be ready if you need to file for it. 

Call real estate Atty tomorrow have him send the proper termination notice 

Depending upon how much you charge for rent, waiting a week or two could cost you hundreds and easily pay for the atty’s fee 

@Francis Doherty you are getting a lot of advice, but you mentioned an important thing here... you are in the city of Chicago. You need to speak with a real estate attorney who is local and who knows the code. A 30 day notice for instance, may not work depending on how long the tenants have lived there under a new change to the ordinance. The other thing to remember is that terminating a tenant's MTM lease right now may not work since we still can't evict here... 

Honestly, you need to get in touch with people who know the area yesterday. Under normal circumstances, Chicago is tenant friendly, but in the pandemic you are walking on egg shells. 

Second what John said about city of Chicago. What might be legal/common in other parts of the country don't work here.

 Long story short, coming at people with a thirty day termination is all stick no carrot. 

Treat people like people.

I purchased a seven unit building in Chicago that was filled with legacy tenants paying crazy cheap rents. Only one had a lease.I told the two tenants in middle (smaller) units I would like them out in thirty days and would give them an extra $500 if they could actually be out in that timeframe. The other middle unit tenant was out in closer to 60 days. 

I Make it easy for people, I let them leave large pieces of furniture and they don't have to clean up because we do total renovations on each apartment. 

Other people I allowed to stay for 90/120 days and kept in touch with them. Lastly I allowed tenants in front units to stay over the winter. I raised their rent $100/150 but it worked for me as well because those tenants were paying their own heat over the winter and we won't get to their apartments till late spring.

Tenant with lease moved out on his own.

@Francis Doherty - echoing what others have said. There's sound advise about not being pushed over from experienced folks like @Nathan G. , but as @John Warren mentioned, Chicago is it's own beast so there a few caveats to add. 

We haven't been able to evict in 13 months. There are literally thousands and thousands and thousands of evictions lined-up before yours (some from 5 months before COVID that never got processed in time). If you go the eviction route they will live there for free for many more months if not a year (pre-Covid was taking 5-6 months, now you have a backlog plus you don't know when you can start the process). If you want them out, serve them to show you're serious and in parallel offer cash for keys. If you only offer cash for keys they'll keep asking for more until they know you mean business. 

Playing out your worst case (not saying that it will happen, but answering your original question). Tenants know the game and if you have a 2 unit with an illegal garden, they call the city on you. City gives you the violation along with whatever else they find. Here is an example from a recent building we were looking to acquire that had this exact violation on the owner caused by an upset tenant (note the garage was there before he owned it, but current owner is still responsible): 

You then need to submit full plans/permits and bank on zoning allowing the change.  This is costly, time consuming, and not a guarantee by any means. You'll most likely have to dig down the basement along with other costly construction updates. Meanwhile the existing problem tenant in one of the legal units is still there for free.

While you have this violation, you don't have clear title so you most likely cannot refi nor sell.

This is why I stray from the illegal garden units. They're fine 90+% of the time, but one pro tenant can make your life hell.

Also, if this is a paying tenant (I just realized you never mentioned that they're not paying), going the adversarial route in Chicago at this current juncture in time, might not be your best move. You got a find a way to connect with them so you can get to an agreement whether it be cash for keys, give them 6 months to find a place...etc

Don't get pushed around but also understand that you might have to take a jab to the chin for a better long-term outcome. 

@Francis Doherty The laws changed last year regarding month to month or end of lease notice required in what has become the "Fair Housing Ordinance".  Here is the notice requirement.

Notice To Not Renew A Lease - Landlords must provide:

  • 60 days of notice to terminate your lease if you have lived in your apartment for more than six months but less than three years
  • 120 days of notice to terminate your lease if you have lived in your apartment for more than 3 years

Other changes under this new Fair Notice Ordinance are as follows.

Raising Rents - Landlords must provide:

  • 60 days of notice to raise your rent if you have lived in your apartment for more than six months but less than three years
  • 120 days of notice to raise your rent if you have lived in your apartment for more than three years

@Francis Doherty From the little you explained you have a scenario that is out of your control right now so cut these tenants a $2000-$5000 check to convince them to leave.  They more then likely already called 311 which will trigger and automatic visit from the city so what you don't want to happen is the tenants let them inside.  At this point any violations can be limited to the exterior if you keep them out.  Cut the check and move on!

You definitely should have gotten some advice before dropping the 30 day notice. 

I would have started cleaning up the common areas first and let the tenants know that going forward leaving messes in the common areas or using them as storage was unacceptable. I would make a point to show up to the property as much as possible to keep it clean, work on the lawn, exterior, add lighting, paint and clean the common areas. This way they would start to see the quality of rental property that you are trying to maintain. They would also start to get annoyed at how much you are coming around to check on the property and that they can't leave their stuff all over the place anymore. If they're messy inside their own unit you can't really do anything about that but you can enforce cleanliness in the common areas. At that point I would tell them that I wanted to start remodeling the units and give them the option to find another place or if they want to stay that you would be increasing the rent.

This reminds me a lot of my first place. I bet the prior owner walked away with a nice check while you're stuck with all of the problems they never fixed, I inherited a busted sewer line, shut off notice from the gas company, a tenant that wasn't paying rent and they they stole the security deposits. Don't get discouraged before you know it you'll have a nice portfolio of cash flowing properties and this will just be a thing of the past.

I would be very careful about buying a property with a tenant in it right now for this very reason. especially with the eviction moratorium in place. I have had to ask a few tenants to leave but luckily they have always left on there own. I hope you have the same good luck.

@Francis Doherty - Good for you throwing it all out there on your first post.  Definitely seems like a tricky situation.

Tons of great advice above so I don't have much to add.  Definitely contact an attorney.

Another idea I haven't heard yet, would be to just sell the property, but I am guessing you may not be interested in that?