Best Tenants are Drug Dealers

17 Replies

I had the best tenants ever with no late payments and no repair calls.  Three years later I was worried when the rent was not deposited by the 2nd.  Normal for most of my tenants but this particular case was different since they deposited the rent into my account and I had not talked to them in years. After going to the property and leaving notice I had to enter from a window in the back. The grass was cut but every window had been screened so I couldn't see in.  Upon entry I noticed the master had been used as some sort of industrial storage facility for drugs.  After looking for a duffle bag full of money stored in the attic and back yard I began to wonder what my liability was for unwilling allowing this to happen. Unfortunately this has happened once before and I'm beginning to think they can pick me out among the crowd. As great as they are as tenants I can't help but wonder my liability in this type of situation. Any help would be greatly appreciated. ..

In posts like this I've found that I'm in the minority with this opinion but:

I don't care what my tenants do as long as the property is taken care of, rent is on time, and there are no dead bodies in the unit.

Worst thing you could have done is what you did. Now you're going to be suspicious and  stressed regardless of whether not something illegal is really going on. 

Contact the tenant, schedule a walk-through, and when you find nothing, move along and make your money. 

Originally posted by @Alexander Felice :

In posts like this I've found that I'm in the minority with this opinion but:

I don't care what my tenants do as long as the property is taken care of, rent is on time, and there are no dead bodies in the unit.

Worst thing you could have done is what you did. Now you're going to be suspicious and  stressed regardless of whether not something illegal is really going on. 

Contact the tenant, schedule a walk-through, and when you find nothing, move along and make your money. 

 I'm met several landlords who absolutely don't care what their tenants do as long as the rent is paid. But, I don't suggest you take that attitude. The "I don't care approach" lacks integrity and care.  Is that really how you want to be know as a business person?  

Yes, there is probably a reason why you keep getting drug dealers as tenants. Read tenant screening suggestions on the forums and contact your attorney for suggestions on getting the authorities involved.   No need to be an, accessory after the fact, because of your tenants illegal entrepreneurial pursuits.  

Well I appreciate your insults, I'll take them under hard consideration /s 

I'm not the police, nor do I have any interest in monitoring how people live their life. I care about my tenants well being, their right to privacy, the condition of my property, and my business. 

Being pissed about what someone does in their private life is certainly anyone's choice. I personally wouldn't condemn or insult a landlord over how they run their business, but that's just me. 

@Alexander Felice  - I see both points; however isn't there some sort of moral or ethical obligation to the neighborhood in which your rental units are present to not be blind to criminal activity taking place on your property? I'm sure that I've watched to many episodes of "The Wire", but drug dealers get robbed and attract other such violence that could bring harm to innocent people in the area. That could even effect the value of your unit and other houses nearby - especially if someone sets up a meth lab or grow house.

There are several concerns I have with this.

1)  First, you went from ignorance is bliss to at minimum a very strong suspicion.  Talk to your attorney and see what you are required to do.  What are the consequences of you not acting on this information?  Think professionally (are you licensed in a particular trade or business....as well as your property rights....possible seizure of your property?  The attorney can advise you.

2)  Let's assume this is just a retail operation this guy was running.  No manufacturing or growing.  What liability will you have when this guy moves on down the road and some customer comes banging on the door at 3 am needing a fix and potentially hurts your tenant.  Remember the part about knowing now and not caring?  What if they find out?  Neighbors talk.  What if someone breaks in to rob your tenant and someone else gets hurt...say a neighbor.  To what extent can you be held liable?  How much will it cost you to prove you are innocent...assuming you prevail and don't face damages?

3)  What if he was growing plants and there is mold or mildew damage you are left with years down the road?  If he illegally tapped into the electric grid to bypass the meter and avoid detection by abnormally high...not that kind of high....electric rates.  That will fall on you to repair and likely reimburse the power company.  What if he cooked meth?  You have to remediate it and disclose it from that point forward.  How's that for property values?  

4)  Finally, I have a colleague that owned a rental that was occupied by a dealer.  It got raided.  They kicked in the door, busted out window and caused all sorts of damage.  On top of that, they sent him a bill.  They told him that he could file a complaint and seek reimbursement from the city for damage to his property but then he would face fines for this and that along with possible prosecution to the point where he was basically bullied into eating the cost himself.  And of course, the insurance company denied the claim because it was related to illegal activities.  

Outside of that, I think the ignorance is bliss, look the other way strategy is an excellent tactic.

I appreciate everyone's advise.  I honestly never suspected either tenant but did not complete inspections. I never thought I was lacking moral obligation or integrity on the issue. I just always respected my tenants privacy. Who am I to judge other people.  I live in Houston and there are often hard working illegal immigrants who need a place for their family. They have saved cash to get a home and I highly respect hard working individuals.  Most management companies deny this type of tenant so actually felt like I was helping some people.  This may be a whole other topic but I'll leave that for another time. I do see the many liabilities that out way the benefit and I will definitely try to complete regular inspections in the future. 

Simple answer is that you don't have any liability for what a tenant gets up to in their home, or at least very little.

There are lots of scare stories about forfeiture and all that, but you have to be caught out quite a few times, and known to the cops yourself in the first place. 

It's odd that a bunch of landlords aren't concerned if their properties are being used for drugs - I would be, and am when it's happened to us in the past. In brings in low life's into the neighborhood, it depresses other rents around you, which brings in more idiots, and what about when you've turned the neighborhood into a slum and you want to sell? Exactly what value is left in the property? None.

@Cory Boren I currently have a tenant like you that pays right on time and never bothers me for repairs, but I still have the home inspected annually to make sure he is not letting the place fall into disrepair. Also, I have the furnace and a/c units cleaned/inspected annually as well (at different times), since those are big ticket items to replace. I don't look at doing these things as intrusive at all; it's my investment and I'm entitled to protect it, plus my lease spells out that I will be doing so. And if a tenant knows you'll be stopping by a couple times a year, they probably wouldn't want to set up shop in the home in the first place.

You should also be aware that in TX on the Seller's Disclosure form, there is a place to check if you are aware of the premises being previously used for meth production. This can severely stigmatize a property, and I've even heard getting rid of damage from meth can be next to impossible without tearing out just about everything. 

I'm not sure if your tenants are still there, but definitely consult your attorney on this one as to how to proceed. Good luck!

Originally posted by @Cory Boren :

After going to the property and leaving notice I had to enter from a window in the back.

Can I point out that I don't think this was a very wise decision?  Even not being involved with drugs, accidents happen and I don't think you'd be the first landlord mistaken for a trespasser.

 Also, what type of drugs (just curious)?

Its probably spelled out in your state generic lease agreement or at least with the tenant/landlord laws that tenants breaking the law are indeed breaking the law and can allow for eviction. Honestly, I'd get them out as soon as possible. Too much of a risk factor given what could happen and now that you know I think its an ethical decision. Are you really going to be known as the landlord that lets this type of behavior occur in the neighborhood.

Have you ever seen those TV shows where the swat team comes in and bulldozes down the front door and bashes out the windows and seasons the house. Yeah I sometimes wonder if those people were just renters too.
I said seizes not seasons. I hate how iPhone changes text based on what it thinks you should say rather than what you said. If anybody can tell me how to turn that function off I'd really appreciate it and I would look like much less of an idiot on my posts
Originally posted by @Account Closed :
I said seizes not seasons. I hate how iPhone changes text based on what it thinks you should say rather than what you said. If anybody can tell me how to turn that function off I'd really appreciate it and I would look like much less of an idiot on my posts

I know this is an old thread but if you want to turn the auto correct feature off it is under setting and keyboards I believe. eith ther or settings and then texts.

Back to the original BPost: I would imagine that there is some responsibility on the landlord to ensure tenants aren't doing anything illegal - but at the same time, you can't become a vigilante and start policing as well. If you think something suspicious is going on, contact the proper authorities.

@Cory Boren

Disclaimer: Not legal advise, consult with attorney if you want that.

I have often wondered the same thing as I have run across illegal activities as well.  Many sources, including my LOLO Landlord book, state that you have liability if you discover illegal activities and do nothing about it or you knowingly put an illegal operation there.  Meaning any number of things such as what if someone get hurt because of the illegal activities after you discovered it.  Although highly unlikely, it states that you could loose your property if it continues.

@Chris Simmons had some very important points.

The good news is that the law is on your side for evictions.  According to the aforementioned book, in Texas, you can evict if you have "reasonable suspicion" of illegal activity. We must have proof (or an actual conviction) in almost every other state!

Hope this helps......

Some courts will seize the house.... case in Michigan from a few years ago below. I heard of similar situation a few weeks ago too.

http://www.fromthebench.us/2011/03/01/desmond-clark-rental-property-seized-as-drug-house/