Getting a DIL need Tenant Out

[Bob E.]

Hi BP'rs have a question here that may be a little different.

We have a note on a house in Lansing Michigan.  The owner, a very nice lady, has decided she cannot afford to stay and has offered us a Deed in Lieu (DIL).  Simple so far except that she has rented part of the home to a tenant who is being difficult.  

I have been advised not to take the DIL until she can provide the property in a vacant status.  Problem is she does not have the money to advance to do a Cash for Keys to get the renter out, and our CFK payment is dependent on getting the renter out/tied to the DIL.

As an FYI the renter has no lease and has been month to month for three years.

Are we stuck waiting 30 days for this the notice to take affect or is there another way.  Lawyer says that since we do not have ownership of the property we cannot contact the renter directly and offer him Cash for Keys, that money has to come from the owner who has no money.  Is there a way to convince this guy that the owner is going to give him $450 if he is out by X date when he knows she is broke too?   Of course there is no guarantee that he will actually move out and not become a squatter.

To make matters even more complicated the owner rented the upper floor furnished and we want the house broom swept and clean as part of the agreement.  Not sure what rights the refer has in relation to furniture.  Oh, and one more thing, the owner is behind on, and does not know if she can afford to keep the utilities on.

I would like to get the house so can move forward as an investor but, more then saving a few weeks, I would like to help this lady move forward with her life.

Suggestions/Ideas?

[Account Closed]

I think I found an answer to my question.  Tenants in a deed in lieu situations are covered by the Tenants in Foreclosure Act through the end of 2014.  Apparently there were amendments to the law to address DIL situations, and tenants after DIL are the same as tenants after foreclosure. Which means if you accept a Deed in Lieu the tenants get 90 day notice. 

So perhaps your attorney is trying to save you 90 days by getting the tenant to vacate voluntarily before the Deed in Lieu?  

That being said, I'd still want immediate control of the property, especially if you have a non-paying borrower with utilities about to be shut off. Does the borrower pay utilities for the upstairs tenant.