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Updated over 9 years ago,

User Stats

30
Posts
13
Votes
Rob Young
  • House Flipper
  • Mason, OH
13
Votes |
30
Posts

Should I Sue Former Tenant or Try To Work a Deal?

Rob Young
  • House Flipper
  • Mason, OH
Posted

Okay, the scenario is a little complicated. I'll do my best to make it concise. 

I wholesaled a rental property a little over a year ago. The seller offered the property for what he owed on it, with the buyer making his payments directly to the bank on his behalf. The person I wholesaled the property called me a few months after he placed a tenant in it. The buyer had to move out of town for job reasons and wanted to know if I wanted to take the property back over. The property was cashflow positive, producing cash 25% in excess of monthly expenses, including taxes and insurance. I took the property back from the buyer without refunding my wholesale fee. 

The existing lease agreement was issued by the person I wholesaled the property to, but neither he nor the tenant could find a signed copy of the agreement. 

The lease expires at the end of this month. The tenant moved out of the house without telling me and without paying April or May rent. I just got access to the house yesterday and it is trashed. Broken doors. Broken window. Garbage everywhere. Broken cabinets. Ruined carpet. It will cost thousands of dollars to get the house rentable. 

I spent enough time in the corporate world to know that when you involve attorneys, the attorneys are the only ones who win. I would like to avoid suing the tenant. I also would like to recover at least part of my damages for lost rent and for having the property restored. 

I could go the small claims court route, but I don't know if it will be a problem that I cannot find a signed lease agreement. I don't want to take the tenant to court if I am operating from a position of weakness. 

My other option is to tell the tenant that I will not sue her if she agrees to pay at least half the cost of repairing the damage and half the back rent. I would be willing to let her work out a payment plan, but would enforce the plan with a contract that allows me to take her to court if she is late on any of the payments. 

Any insights on what my options are? Do I risk anything by trying to work out an arrangement with her while telling her that I will take her to court if she does not agree? 

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