I've been a landlord for around 7 years now. It was never initially my plan. Having bought a house at the height of the market, the condo has lost over a third of its value. Pair that with marrying into the military (and the moving that comes with that) and being a landlord seemed to be only option available.
For the last 3 years, I've had one tenant. Typically this is a very good thing. If this case was typical, I wouldn't be writing about it.
Around the beginning of 2010, they missed a couple of payments in a row. Living in CA, I was purposely a little slow to start the eviction process as I simply didn't want to deal with cross-country flights to Boston. (In hindsight, my lawyer could have probably taken care of it.) They started to pay again and consistently, but I was still out those two months of rent. The tenant suggested that they'd pay back what they owed by adding what they owed as a monthly payment to their new lease... essentially putting them on a payment plan. They took care of the place well and this seemed like the best chance I had of recouping the lost money.
That worked for around 8-9 months when they missed another payment. At one point we switched to weekly payments in an attempt to help them budget better. That backfired as payments came in irregular times, sometimes 3 times a month instead of 4, so the debt started to pile up. (I tried to get them to schedule payments automatically, but my repeated suggestions never got implemented by the tenants.) At this point, I contacted the wife of the couple, because I was making no headway with the husband. It was one excuse after another... and the debt at times had gotten over $4000. They told me that they were going to sell a small business franchise that they owned and would be able to pay me back then. That excuse bought them 6 months, as I waited impatiently for the sale.
It became clear that the sale wasn't going to happen. I put the screws in and started bugging them nearly every day. Finally they said that they were able to get about 70% of money owed from family and tried to negotiate their debt down with me. The husband said that they wouldn't send the check for the 70% unless I signed off on 100% of the debt! I explained that this wasn't a negotiation, and he doesn't have a choice in the matter. My wife and I got all the paperwork for eviction and gave the tenant a formal Notice to Quit.
That got them moving. Their lease was going to be up in a couple of weeks, and they asked if we could sign a 3-month extension. I was worried that if I didn't accept it, they'd roll that into first month and security deposit at their next place. (You can tell that I go out of my way to avoid litigation.) So my wife and I drew up a very specific lease that listed multiple times that it was to be a 3-month lease, it was not to renew, and the tenant would not be a tenant at will following the three months. I also insisted that they pay closer to market rate as I had been giving them a discount. I got the payment in full (I made some minor concessions). They were slow returning the lease extension... it took just shy of a month. Before they sent it back, they claimed that they thought the lease would be at the old rent. I am sure it was quite clear otherwise, but at this point, the $300 (3-months at $100) that I would lose was a price I was willing to pay to just end our association with them. They sent me the last page of the lease with their signature, noting the changed rent price.
All was good for a month and a half until I got an email asking if the lease could be extended further. They were having some difficult finding a new place to live in their price range. I knew would be a problem because they couldn't afford the below market rates I was giving them. Their child was in a special camp and it would really be a hardship to get him there and back with work. Oddly, the additional extension they were asking for would take them into the start of the school year, which presumably would cause more difficulty with switching school districts. Foreseeing that potential problem, I declined their request.
Yesterday, July 31st was the last day of the extension. To make sure that everything was going to go smoothly, I asked them two weeks before what time they'd like to do the walk-through on the 31st. At that point, the tenants claimed to have a signed lease that takes them through September. I'm fairly certain they are simply just taking the last page they signed (which doesn't have signature on it) and sticking it on some of the first pages with some dates changed. The husband claims that we talked about this over the phone, but this wouldn't matter as the lease clearly states that all changes must be agreed to in writing. The end result is that I have a signed lease by all parties saying July 31st, with email chains showing that's what I sent, and their asking for another three months (showing that there was never anything for 5 months). They refuse to acknowledge this and won't send me their documentation showing September claiming that we'll have it decided by the courts.
I understand that the tenants are probably just trying to do what is best for their family, but at this point they've pushed me too far. Today, if all goes according to plan, the county sheriff will be showing up at my home with the legal paper work prepared by my lawyer. I predict that with court costs and having to move out on short notice, this is going to cost them a lot of money that probably don't have. They are playing chicken with a brick wall and I can't see it ending well. I can't see how people could almost purposefully destroy themselves like this.
Here are some lessons learned:
- Don't give an inch, they'll take a mile.
- Nice guys do indeed finish last (at least in some cases)
- Get every page of a lease initialed (even though this isn't strictly legally necessary) and number specifically (i.e. "Page 4 of 8")
- Act promptly and don't let things slide
Most of these are obvious and information I already knew (except for the lease details). I had bumped them down my priority list far too often; counting on the situation to resolve itself over time.
Note to my friend, J. Money at Budgets Are Sexy, be careful what you wish for. I keep telling myself that in about 14 years, I'll own the property outright and it will be a significant piece of my retirement puzzle. This too shall pass, right?
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