Question on evicting a tenant

[Matt Kowske]

Hi folks,

I have a question for you seasoned landlords. We recently bought an apartment building that is zoned by the city as a 4 unit dwelling. The previous landlord put in a 5th unit in the basement with no windows (also does not meet fire code). The city already knew about this unit and we had been given a deadline to vacate shortly after the sale. We served the tenant a notice of 45 days (which is what is written in their lease). 

Now this tenant is refusing to pay rent for February and the 2 weeks of March we said he could stay there before vacating. He says that since the apartment is not legal, the lease is null and void so we have no grounds to demand rent or evict him.

We also have no security deposit. He says he paid it and gave it to the property manager who gave it to the previous owner before we bought the place. It says no security deposit was paid on the lease, but the tenant claims this is not the case.

Anyway, I know we should probably talk to an attorney but the legal fees + eviction fees I'm sure would not be worth the $700 we are losing from this tenant. It is our first building and this isn't a great way to start! We're feeling a little deflated about the whole situation. Any advice on how we should handle this? Thanks --