Lazy Man and Money

My Tenants are Finally Gone (and Lessons Learned)

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I thought hard about not writing an article today. It’s a pseudo-holiday today*. Tomorrow is the 6-month anniversary of the Boston Bombings. And yesterday was arguably one of the greatest days in Boston sports history. Any time the radio announcer is reduced to just shouting out random words and 80’s slogans**, you know something special happened:

… and that was before the Red Sox had one of their most improbable come-from-behind wins in the ALCS. However, it’s late and I have a little time, so here’s an article I’ve been wanting to write for a while now.

Nestled in all that is another piece of good news as you gathered from the title. A few months ago, I wrote an article My Tenants Won’t Get Out!. Now that they are out, I can finally write an update.

When we last left off, I was trying to get rid of my tenants who had carried a few thousand dollars in late rent for years. In hindsight, it’s probably best to get rid of these tenants right away, but (as we’ll learn) the eviction process is hell, and trying to work out the problem is always preferable. I was finally able to get them caught up on what they owed, which including them writing a contract to surrender their security deposit (the only way to bridge the gap of what they could pay and what they owed me). That process was about as ugly as it gets… my wife was seriously considering getting a restraining order a couple of times.

When it came time to renew the lease, I had decided it wasn’t going to happen. It was still in a grey area of the month before the lease was over and when I was due to get the catch-up payment of a few thousand dollars. When I got the money, that time had narrowed to a couple of weeks and I felt bad about giving them such short notice about not renewing the lease. So I had offered to extend the lease for another month, giving them 6 weeks. They called foul and asked for three months. It was a big mistake, but I agreed to it. (I’m too nice.) When the three months came and went, they decided they wanted to stay another two months because it was an inconvenient time to move.

I stuck to the agreed signed lease and denied their request for a second extension. They said that they weren’t going to leave. I was pretty confident they were going to leave because I had a signed agreement from them.

Funny thing about landlord-tenant contracts in MA. They are good in theory, but in practice they are a joke.

It turns out that even though I had the expired lease and he had no current lease, I had to effectively evict him. My tenant knew how to play the court system. It takes a couple of weeks to get the first court date. Then the tenant can file for discovery which creates a bunch of paperwork such as detailing every conversation we ever had over the 3 years he lived there. That pushes everything out another month. That’s 6 of the 8 weeks he wanted anyway.

Then he played the trump card. He threatened to sue me for violating a disability act. He has son with type 1 diabetes that I understand to be well-controlled with an insulin pump. Nonetheless, one time he had a nurse come by and the property manager had to tell the nurse to fix her car because it leaked oil over the property. I didn’t find this out until a week ago, but this was enough for him to claim that I didn’t take action which prevented his son from getting medical attention. I understand just looking out for family, but using your child as a pawn to fabricate a nonsense lawsuit is just scum of the Earth stuff.

I was pretty upset by this and I’m very much a man of principle. I was going to see this out until I talked to my lawyer to talked me out of it. Turns out that no landlord ever gets the rent they are due in these situations, even when they win the court case. Not only that, but the case can stretch a year and cost well in the 5 figures in lawyer and court fees. My lawyer has seen people go into foreclosure and lose their home because the owner didn’t have rent coming in to cover the mortgage payments.

The bottom line is that it was best for me to settle and get him to sign a court order saying that he’d be out when he wanted to be out all along. So one might ask, “Why did I go through the court and lawyers and all that in the first place?” It’s a great question. The reason is that if I didn’t, he could have stayed there until the end of Sept. and then I’d have to start the two month process.

The state of Massachusetts has some really messed up landlord-tenant laws. I got really luck in that I have a a great real-estate lawyer who helped me.

I do kind of feel like I got a bit of last laugh. I was doing a walk-through to make sure the place wasn’t trashed and came across the property manager. We chatted for a little bit and he asked if I was going to get the locks changed. Since they had left, I didn’t really think it was necessary. He then said that half the town probably had keys to the apartment. I didn’t understand what he meant and asked for some clarification. He said the wife has a number of boyfriends. Ahhh… the Karma.

* I can’t figure out what kind of holiday Columbus Day is. Seems like most stores are open, but government workers and the post office have it off. Then you read the horror stories about what Columbus actually did, yet he gets one of the very few holidays named for him. It’s just a very weird situation.

** My new favorite phrase is “Unicorns, show ponies, where’s the beef?”

Apartment Flooded!

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Flooded goose can't read the sign
Flooded goose can't read the sign
Last week, there was one ordeal after the other at Lazy Man Central. My wife’s condo back in Massachusetts had a flood. A pipe burst in the bathroom. For a short while it was condemned – deemed not suitable for living. It’s never a good situation. The tenants are unhappy. My wife is unhappy. The insurance companies are unhappy. The only happy people are the contractor and the people who work for Home Depot.

After looking through our options it seems that the condo insurance covers part of the damage and our landlord’s insurance covers much of the rest. What’s not covered? The tenant’s personal property and the cost of their alternative living while we made it livable again (7 days or so). Why is it not covered? We had a standard lease that leave it up to the tenant’s rental insurance. The tenant has no renter’s insurance. They have no legal recourse and they know it.

So when it came time to discuss what to do, we gave them a couple of options. We happened to find a cheaper place that they could move into while we remodel. We’d simply all agree to break the lease and keep the relationship cordial, so that they may come back when renovations are complete. Alternatively, we could let them live there during the renovations (it will still be livable).

My friend who is a real estate lawyer in MA, said the best idea would try to get them to break the lease give them back some money for damages and try to rent out a fixed up place in September. That sounds like a lot of loss on our side (months without rent, giving them money for their lack of insurance) that we shouldn’t have to take in my opinion. His thought was that it’s probably worth it to resolve the situation and move on. I didn’t really buy it because when you barely break even on the rent, it’s painful to go into the negatives. (Regular long-time readers may know that we intended for these to be our primary residence long ago, but we met each other, found much better job opportunities. Breaking even is much better than a big loss in the current market.)

The resolution seemed pretty simple. We went through the section of the lease (fire and causality) with the tenant and outlined the responsibilities of each party. We showed how we were doing our part, but that their part was going to have to be to take care of their possessions as outlined. They saw it our way. They didn’t want to go through the hassle of moving (who can blame them?) and said that they’d stay through the renovations. They even offered to help let in the contractor for the renovations. They did request asked for July’s rent back and we decided it was probably worth that to move on. It seems reasonable to me that they should get something back for not having the place they were expecting and having gone through this inconvenience as well. Maybe we are just a little too nice.

What would you have done?

Photo Credit: Todd Quinn

Angie’s List: Any Good?

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Longtime readers know that while I live near San Francisco, my wife and I own rental properties in Boston. We didn’t set out to buy them as an income stream. She owned her place before she met me. I bought my place soon after we started dating. While neither one of us intended to move to San Francisco, my wife’s career stood to significantly benefit from relocation.

As you may have heard, it’s not a good time to sell homes. Having bought out homes in 4 and 7 years ago at near market highs, there wasn’t a lot of money to be made by selling. In fact, my condo would sell for about $20,000 less than what I paid for it. As such, we decided to keep the properties and instead rent them out. My theory is that in 30 years, we’ll have no mortgage and a nice income stream – even if things look “break even” today.

Unfortunately being a landlord 3000 miles away isn’t easy. While we’ve been blessed with good tenants, the place is going to need maintenance from time to time. Bath tubs don’t caulk themselves. It’s not very economical for me to fly back, so I’m in the search of a good handyman in the Boston Metro West area.

This is when I saw an ad for Angie’s List. I’m already a huge fan of Craig’s List, so why not give Angie a shot? When I got to Angie’s website, though, there was a surprise. It wasn’t a free service like say 1-800-Dentist as I suspected. You have to pay monthly fees to be a member and find a handyman. The first month they even hit you with set-up/activation fee. I’ve joined a lot of websites in my time, and I can’t imagine what set-up/activation they have to do. It seems clear to me that this is a way to get someone to spend around $25 up front when they just want the name of a handyman (as in my case).

I’m not against paying for something, but give me a demo or something so I can see what the service does and how it works. Let me know how many handymen are in the area that I want. My wife’s place is close to Worcester, MA which is a good hour from Boston. Angie’s List’s Boston community may or may not be helpful in that case. They should at least tell me that up front.

To Angie’s List credit, they offer a 110% price protection… if you are not satisfied you get your money back… and then 10% on top of that. However, I’m always skeptical of those deals. It seems like there would be a lot of hoops to go through and if they decide not give you your money back, are you going to hire a lawyer to recoup your $25? Of course not. It’s much easier to keep the $25 in your wallet until you know what you are buying.

I’m starting to think that Angie’s List isn’t very helpful and that I should look other places for my handyman. Before I give up, I thought I’d put the question out here. Do you use Angie’s List? Where do you find a good handyman if word of mouth fails (as it has for me)? Perhaps Craig’s List is the answer for this too?