New to Real Estate · MA · Member since 2018 · 9 posts · 2 votes
Hi all, Looking for tips on how to handle a situation in which a mixed-use property was inherited with three non-paying tenants who had been given permission by the now-deceased owner to occupy the property without paying rent. The story goes that tenants were down on their luck and couldn't make their rent, so the owner allowed them to stay until they could get back on their feet. The property has been neglected and is in now complete disrepair, likely in teardown condition, and is an enormous tax burden on the beneficiary who inherited the property (significant back-taxes owed, high annual property taxes, etc). What is the cleanest way to remove the tenants at this point, given that they had received prior permission from the deceased owner to stay, so that the property can be cleaned up and sold? Is it just a matter of knocking on the door and notifying the tenants that circumstances have changed? Or is it better to find a more "hands off" approach? Thanks for any thoughts!
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Even if they were told they could live rent free, it's considered a verbal lease agreement which defaults to month-to-month. You can give them 30 days notice to vacate. If they refuse, you'll have to start the eviction process.
Since they are living there for free, there's no incentive for them to leave. You may consider paying them to get out. If you do that, don't pay until they're out and the locks are changed so they can't get back in.
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Even if they were told they could live rent free, it's considered a verbal lease agreement which defaults to month-to-month. You can give them 30 days notice to vacate. If they refuse, you'll have to start the eviction process.
Since they are living there for free, there's no incentive for them to leave. You may consider paying them to get out. If you do that, don't pay until they're out and the locks are changed so they can't get back in.
The property is no longer owned by them, so tell them to start paying or move. If they haven't been able to get on their feet by now, then they are unlikely to. You could offer them cash for keys, but if they don't tell them you are starting the eviction process in 30 days. If they are smart, they will realize that goes on their record.
@Nathan Gesner is that something that should be backed by an attorney ?
It doesn't take an attorney to create a legal and binding contract. As long as your agreement is in writing, signed by all parties, and is within the law, you can do it yourself. "Tenants agree to vacate no later than midnight on [DATE] and will not return to the property. Landlord will verify the unit is vacant, change locks, and then pay Tenant $XXXX within 24 hours in the form of money order or cashiers check. If Tenants fail to vacate by this date, Landlord this Agreement shall be void and Landlord will initiate action for eviction."
Realtor · Atlanta, GA · Member since 2016 · 117 posts · 78 votes
4y
@Benny Cash
How do you know that the previous owner actually agreed to this? Was it in writing?
In either case, you can terminate lease with a 30-60 notice depending on what was originally signed. Give them notice and and tie in incentive that you won’t go after backlog rents and actually give them one months rent upon satisfactory final inspection…though if it’s in disrepair as you said…that might be tough.
Get them out and sell to an investor willing to flip. You could also go this route with tenants in place and they will gladly take on this problem for a discount.
@Nathan Gesner is that something that should be backed by an attorney ?
It doesn't take an attorney to create a legal and binding contract. As long as your agreement is in writing, signed by all parties, and is within the law, you can do it yourself. "Tenants agree to vacate no later than midnight on [DATE] and will not return to the property. Landlord will verify the unit is vacant, change locks, and then pay Tenant $XXXX within 24 hours in the form of money order or cashiers check. If Tenants fail to vacate by this date, Landlord this Agreement shall be void and Landlord will initiate action for eviction."
Only modification I'd do is set the time for something like 8 am on whatever date. Midnight causes problems as they can claim they didn't know what day-yes they should be able to think of New Year's eve and midnight as an exam, but having seen too many students mess it up with assignments, we often do 1159 pm on X day.
Specialist · Johnson City, TN · Member since 2021 · 139 posts · 146 votes
4y
The way this situation has been painted up makes me conclude that this property is worthless. Evictions, back taxes, demolition can make a property not worth the hassle. What is the raw land value?