What to Do if You Find Out Your Tenant is Involved With Drugs

by | BiggerPockets.com

Even with proper screening, it may come to light during your tenant’s tenancy that they are involved with illegal drugs, either selling or using. Not only will drugs ruin your tenant’s life, but they will significantly affect yours as well. With drugs come late rent and a neglected house — usually accompanied by filth, suspicious burn markings in the flooring, an overgrown lawn, and frequent shady visitors. Tenants on illegal drugs or dealing illegal drugs are bad for business. Not only will they ruin your property, but in a multifamily property, they will drive other good tenants away.

Related: 7 Advanced Tenant Screening Tips (So You’re Not Fooled by Wolves in Sheep’s Clothing)

When it comes to illegal drugs, there are some signs that indicate there is a problem:

  • Tenant begins paying rent later and later every month
  • Tenant falls behind on utility payments
  • Tenant ignores problems
  • Tenant ignores the landlord
  • Tenant won’t let maintenance inside the rental
  • The exterior of the property shows neglect: garbage, junk, or overgrown lawn
  • Tenant has multiple visitors at all times of the day who come and go quickly
  • Tenant’s housekeeping shows severe neglect
  • Tenant uses extreme security measures
  • Tenant keeps their blinds or curtains closed at all times
  • Tenant exhibits illogical behavior

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Your Options if You Find Your Tenant is Involved With Drugs

Of course, though none of these activities or actions in and of themselves are proof that your tenant is involved in shady dealings, they can be evidence of it. If you have legitimate reasons for believing your tenant is involved with drugs, you have a serious and potentially dangerous problem on your hands. If they are on a month-to-month agreement, simply do not renew it. If they are on a term lease, you have a couple options: Cash for Keys or eviction. Your lease should have a clause or addendum that prohibits drug use, dealing, and any other illegal activity. However, trying to prove a tenant is dealing drugs can be difficult, which is why in our business, we prefer to use the Cash for Keys option rather than eviction when dealing with situations such as this.

Cash for Keys

Cash for Keys is simply the practice of paying your tenant to move out, knowing that the cost of paying a tenant is cheaper and easier than trying to evict. In the past when we have become suspicious that the tenant is involved with illegal activity, we contact them and let them know their tenancy is not working out, but we would like to help them get into a new place.



Related: I Checked Out a Drug House So You Don’t Have To (With Pictures!)

This is where the cash comes in — we offer them a set amount, generally between $300–$500 to be completely moved out of the home by a certain date, usually within 7–14 days. We explain that in order to receive the cash, the home must be free of all personal belongings and clean. When dealing with a tenant involved with drugs, this method has almost always worked for us. Because a tenant involved in this type of activity cannot keep their life together, if they didn’t bite at our offer of cash, we would simply find some other form of lease non-compliance and evict them over that as quickly as possible. Offering cash is simply the easiest and quickest way to remove them from the property.

[This article is an excerpt from Brandon Turner’s The Book on Managing Rental Properties. Be sure to check out the full book here!]

Have you ever had to deal with a tenant involved with drugs? How did you handle the situation?

Let me know with a comment!

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.

6 Comments

  1. Dan White

    As a long time landlord in South Tacoma I have had some encounters with this subject.
    First Rule, Do not use leases. My monthly rental agreement prorates the deposit over 12 months and has substantial penalties for leaving in less than a year., however either party has the flexibility to terminate sooner. When I have an undesirable situation I can give a notice to terminate at the end of the month.
    Second rule, Don’t call the police or other authorities, this will just attract attention to you and possible bigger problems. Just get rid of the tenants ASAP.
    P.S. I have 60 rentals and have rarely have had to carry these measures out, I sleep better at night knowing that I have the flexibility to handle this problem expeditiously. My average tenant stays 8 years so the lack of a lease has nothing to do with their desire to stay. My tenants are well taken care of and know if there is a problem it will be taken care of including undesirable behavior.

    • Katie Rogers

      “Do not use leases. My monthly rental agreement prorates the deposit over 12 months and has substantial penalties for leaving in less than a year., however either party has the flexibility to terminate sooner. When I have an undesirable situation I can give a notice to terminate at the end of the month.”

      So is it a lease or not a lease? It sounds like it’s a lease when the tenant wants to leave, but a month-to-month when you want to get rid of the tenant. And what does it mean to prorate the deposit over 12 months?

  2. Matt Faircloth

    Hey Brandon,
    Great article. I think that your first sentence says a lot “Even with proper screening”. Landlords can identify and eliminate potential problem tenants by running checks on credit, criminal history, and eviction history. I have declined tenants that have recent drug incidents on their credit report. The laws are changing around this and declining strictly based on criminal record may become illegal soon. I believe it may be illegal already to decline for misdemeanor offenses.

    Unfortunately I have had some some experience with drug use in my rentals, both with tenant’s selling drugs using them. I’ve always found that the best way to resolve is to engage it head on. I let the tenants know that we are aware of the activity and remind them that their lease calls for them to abide by the law. Since they are not doing that we have the right to evict or go to the police, but will offer them half their security deposit back to move out, if their rent is current. They have always accepted and moved along.

    We even had drug dealers break into a vacant property while we were renovating it and setup shop (this actually happened twice). That is a different story all together and involved police involvement to get them out, and boards and SimpliSafe to keep them out. Not a fun experience I can assure you!

    Matt

  3. Alex Saleeby

    Drug dealing operations can potentially have significantly higher risks to a property owner including forfeiture (criminal or civil) of the property where laws allow local, state or federal law enforcement agencies to seize a property (real or otherwise) that is involved in criminal drug dealing activities. Property forfeiture is seldom discussed when talking about drug use and sale by tenants and ought to be taken seriously.

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