Should I allow this lease to renew?

Question

I purchased a 4-unit multi-family last September, and with it I inherited two leased units. The first tenant is great, he pays his rent early, he's quiet, basically the picture perfect tenant.

The second tenant is a decent person, but he is very loud (gets into arguments on the phone all the time, disrupting other tenants), has paid rent on time only once since I've owned the place (all other times is between 3-4 days late), and I came to find out the previous owner signed a lease to him without every doing a background or credit check in a haste to get the unit filled before the property sold.

Both tenant's leases are up August 31st. I am considering not renewing the lease of the second tenant, because I am tired of him never paying rent on time, always screaming at someone on his phone, and I have no idea what this guy's creditworthiness is or what his background is criminally.

Any suggestions? I am currently thinking I will just not renew his lease, or I will ask him to complete a background/credit check before I make a decision.

Thanks in advance for any help!

Nathan Gesner · Answer

I would not renew and I would NOT provide a reason. Just notify him that you will not renew his lease and it will terminate on August 31, 2018. You have no legal requirement to renew or to justify your decision. If you tell him it's because of late payments, he may try to convince you he'll pay on time. Then you'll let him stay and he'll be good for a while before slipping back into old habits.

Running a credit/criminal won't change the fact that he's regularly late or noisy. Treat it like a business transaction and move on.

Dale T. · Answer

Nathan G is spot on the money.   The only thing I would add is don't overthink the problem.  You either tolerate the Tenants weaknesses (ie paying late, loud phone conversations) or you don't.  Make a decision (either he stays or goes), stand by your decision and move on.

Ben G. · Answer

Sweet. This is all very helpful. Thanks for your help, everyone!

Ola Dantis · Answer

@Ben Gilbert I think its best to inform him that you won't be continuing his lease.

These tenants usually don't turn around and become that picture perfect tenant, as you've referred to above. So, I'd suggest you nip the problem in a bud quick.

Hope this helps. Goodluck. Thanks! - Ola

Ben G. · Answer

Thanks, Sai. Yeah, I think that's what I'm going to end up doing. I'll just spell out in the letter (I have to send him a notice that I'm not renewing 60 days before his lease is up) that I am not renewing based on him always being late.

Sai T. · Answer

If I were you I would not renew based on what you stated.

Ben G. · Answer

Yes, the apartment is in very good shape, and it wouldn't take much to get it ready for the next tenant.

Thanks for the input about fair housing and the background check. I didn't even think of that.

Ian Tvardovskaya · Answer

What is the condition of the unit? Do you have the funds to turn it and get it leased in a time frame that works for your business? If the apartment is in good shape and the business make sense, then don't renew. It will (hopefully) make your and your tenant's life easier. If you have the second tenant go through a background check before you allow him to renew, then fair housing will require you do the same for the first tenant.

Should I allow this lease to renew?

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