Hi all, to start I'll start to say that I'm new here, and very new to real estate in general. So go figure I have an issue with my first tenant, in my first rental property ever. I'm in Okaloosa county Florida. Here are the details.
The tenant contacted me while deployed (return approx 30 jan 2015), stating that they already knew what the property looked like and would like to hand over a security deposit to secure it. I responded and said that they would need to sign a lease prior to me receiving any deposit. So I had them apply, they had a friend do a walk-through, and I told them that the only way I'd "hold" the property was if they signed a lease with an effective date of 1 Jan, and they would owe me January rent (despite their return date of approx 30).
The tenant readily agreed, and we signed a lease about a week ago via e-mail correspondence with an effective date of 1 Jan. She said she would have her mother postmark 1st months rent and security deposit, which I have not yet received. We arranged to hand over the keys on her return.
I included in additional clause "Tenant acknowledged that even though they will not physically inhabit the home until they return from deployment (after the lease effective date) they are still responsible for the terms and provisions in this agreement."
Today the tenant asked for a reduction on the January rent, and I said no. They then came back and said they "decided to opt-out of signing the lease." Whoa whoa whoa! After already delaying December's rent, now I'd be missing on January rent even though they knew the terms they were agreeing to. There is no provision for early termination of the lease
So my question is, do I have a leg to stand on trying to pursue this if she "backs out"? I am active duty military myself, I'm not trying to screw her based on her situation, but she fully knew everything she was signing up for. Is this just something I have to write off as a loss? Even if I can levy a damages judgement for lost rent, how can I serve them at an address when they never even moved in? Looking for any advice you guys have...
I had something similar happen to me on my first property. I had a family that served in the military sign a lease and give me a deposit/rent and then not be able to move in due to military orders which they never gave me. However, I ended giving the deposit/rent back and found a new tenant within a week and had minimal loss.
I am in the National Guard and though I don't rent my Army buddy does rent in Colorado Springs, home of the Ir Force Academy and Fort Carson. What he does with his military tenants is get their unit contact info and CO info. If they aren't paying their rent their CO can get rent deducted from their pay automatically, it just takes talking to their unit to get the ball rolling. Besides if the Soldier is deployed they're getting BHA and the soldier needs to give a copy of the lease to their unit admin I believe, this should help the soldier pay the rent. good luck
Thanks for the tips guys. I do have all of her unit's info, to include the 1st Sgt and CO. But I also know that a member's unit can be pretty protective and may tell me to pack sand and come back with legal judgement. That's what mine would do at least, and I'm on pretty good terms with my shirt and CO. I guess if she insists and I'm unable to re-rent the property quickly, then that'll be my first step and I'll feel it out that way.
Sorry to hear about all the stress. I would say to move on and find a new tenant.
If you insisted they pay and move in per your lease, do you want to start a hopefully long working relationship like that? And how can you trust someone who doesn't honor their words to execute the lease and take care Of your property?
If you want to get loss in rent damage, how much did you really lose? I am feeling like this is far from an ideal tenant applicant and yet you decided to rent to them, which tells me perhaps you didn't get other interested parties. So I would reevaluate the pricing. It is perhaps priced too high. In reality, would you have rented it at this price to any body else if this trouble tenant didn't commit to the lease?
Third, I always take a non refundable holding deposit before I process any tenant applications. It is anywhere from $200-500, which means when I receive this in cash, money order or cashiers check, I will take the property off the market, and process the applicants application. If the application falls thru because of untimely or the lack of cooperation from the tenant, or any other wrong doing, I forfeit the holding deposit. If the application doesn't go through because of something out of their control, like job loss, or whatever, I return the deposit. If the application goes through, I apply that fee towards their deposit. That way, you can cover this exact situation.
Honestly, congratulations! You just had your first lesson as a landlord, and it only costed you one month rent. Many lessons can only be learned through making mistakes, and most mistakes are very expensive.
Nazz, thanks for the advice, you're correct with the pricing and problems finding a tenant. And your optimism is refreshing! Gotta focus on the lessons learned.
I find renters through Craigslist. Only about 1 out of 3 do what they say. Unless I have Cash in hand. I assume they won't do what they say.
I'd never hold a property or consider it rented without payment/deposit of some form.
John D., Palm Vacation Rentals | [email protected] | 4155195039
My husband is active duty and I manage 9 rentals, 5 our are own. We require a copy of the orders before move in. We also have a "buy out clause" for those types of situations. They require 2 months notice and 2 months lease. We don't hold the unit or stop showing it until the lease AND the deposit are received at the same time. Unfortunatly this policy was devised due to what you are describing.
Yes you can go to command. Technically you are suppose to go to command before you go to court.
I agree with Nazz. As another active duty soldier, I think the best way to avoid this problem is have them put in a deposit with the lease to hold the property. This will also help you filter out the ones who you don't want to rent to in the first place (tenants that will try to sublease without you knowing, the ones that will counterfeit deployment orders to break a lease, the ones who have trouble affording the security deposit). Great call geting the CO and 1SG's info.
@Christopher Morin I agree with @Paul Dalton . It's best to cut your losses short and move on. Unfortunately, this sounds like the relationship is not starting out on a good note and could be a prediction of what is yet to come should you continue your relationship with this prospective tenant. Best of luck!
Originally posted by @John D. :
I'd never hold a property or consider it rented without payment/deposit of some form.
10X this. I don't hold anything until I have both the lease signed and a deposit. Way too easy for people, like this woman, to say, "Whatever, I changed my mind," when they don't have any skin in the game. I'm sorry you had to learn this lesson on your first foray, but it (should) get better from here.
And, assuming you have a longer lease than a month-to-month, you could also sue her for more than January if it takes longer than that to rent. Not necessarily saying you should sue her (though I would), but at least try to use that as a bargaining chip. Like, "Ms. Soldier, I realize you would like to breach the legal agreement we signed. I am willing to agree to this if you pay the first month's rent, because it will take me at least that long to rent to someone else. In exchange, I will put in writing that I hold you harmless for any rent beyond that, even if it takes me substantially longer to find a new tenant." Or something to that effect.
Not legal advice, but merely something I would do. At least it might get her thinking/worrying that she can't just saunter away from her responsibilities without repercussions.
I'm in the military and I prefer not to rent to military. There is too many ways for them to get out of a lease. Most will do the right thing, but I've seen some weird stuff that gets them out. Orders are nice, but easily constructed... I've done it for a few in the past to get them out a bad situation. I saw a set of orders the other day that blew me away and educated me. The member was leaving the area for greater than 90 days (91 to be exact), BUT was returning after all the training to the same area. Guess what... Broke a lease that was recently signed and legally...
I TOTALLY agree. I have never been more screwed than by my own. They have educated me in the ways of the world. Ways that one should not have to see and people wonder why I like civilians as tenants. At least the lease is enforceable :)
LOL - Here's a recent one, always a good laugh!
A wife called me first upset about "Security". There were supposedly "break -ins in the area" FYI couldn't substantiate them. She wanted to move out because it wasn't safe. Mind you I am buying a house 5 doors down, and 3 O4+ live with sight of this house. So VERY good neighborhood.
When that didn't work!
Than she try's the my husband is deploying (in 18 months :0 ) and he's going on "redeployment work-ups" you should let me out "cry fest" Wasn't amused when I wasn't "buying it".
GUESS Why this all was going.They wanted to move on base because the "best" offer housing came available and they didn't want to follow the break lease clause!
and military wonders why landlords don't want to rent to them. Doesn't it say something when their own have these opinion :)
its a scam yo, they do the same thing for auto posting on craigslist.....DONT BELIEVE IT!
So a quick update: After reminding her that she was part of a legally binging contact now, she sent me a very cordial and respectful email why she wanted a rent reduction, and we agreed to about a $350 reduction (750, down from 1100) for January since she wouldn't be present. Which about equals my monthly expense.
I may have given in when I shouldn't have, or maybe should have just moved on to another tenant, but I suppose we will see where this goes. She is setting up an automatic allotment from her paycheck as well so hopefully late payments won't be any factor.
Allotments are nice, because it helps a young military person out when it comes to figuring out how to pay bills for the first time in their life. For anyone who is not familiar. The allotment deducts half the amount on the 15th and the second half on the 1st. It then deposits the full amount on the 1st. But, it's always 3 mouse clicks from being turned off....
While I am happy you got your money! In the future I recommend NEVER giving a deduction. You need to stand your ground from now on, or you are going to have problems. You need to set the precedence that the lease is a binding contrat and you will hold them to it. So be prepared to have another issues come up (although I hope I am wrong).
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!