Need Advice on Philadelphia Rental Property

[Stacy Weng]

Hi BP,

I have an interesting situation going on at a Philadelphia rental property. Long story short, my father in law purchased several rental properties in Philly years ago under my husband's name. But apparently he never wanted to put in any sort of work or effort to manage it. The current tenant is paying 1/3 of market rent, and the fact that he's fine with just throwing money down the drain just b/c he doesn't want to put in the work to bring the rent to market value or just hire a PM company to handle it is beyond my comprehension.

Since the property is under my husband's name, I've been pushing him to get his dad to just let us take over the property, and although my FIL wasn't willing to before, he's finally agreed to it, especially now that the tenant hasn't even paid rent in months!!

Here's where things get complicated...

1. My FIL doesn't have the contact information of the tenant (he apparently lost his phone a while ago and lost her contact info)
2. Come to find out, he has NO lease in place with the tenant! And from what I've heard, it can get really tricky in Philly to evict a tenant w/o a lease if they're considered squatters?
3. And here's the kicker, apparently he foreclosed on the two other properties he purchased in Philly, and supposedly there's a lien on this property, and he never told us about this until recently. He also doesn't want to take the time to dig up the info on the lien. So should I do a title search, or should I try to get the bank info from my FIL and contact the banks to get more details on the liens myself?

The fact that someone is willing to purchase rental properties out of state with no intention of ever putting any work into it and let it get to this point is bewildering to me. So now we're stuck with cleaning up this mess he's made, with the hopes of turning this property into a normal cash flowing property after getting the tenant out and rehabbing it.

My husband and I had originally planned on just driving up there to check on the property, to see if the tenant is still even living there and start the process of getting her out. But since driving up there just to knock on the door, without knowing if there's even anyone there, seems to be counterproductive.

I've spoken to some real estate investors in the Philly area to see what I should do to get this sorted out, and I seem to be getting some conflicting info.

On one hand, I was told that I can hire a PM company in the area who can do everything on my behalf - go check on the property, and if there's someone there, take the necessary steps to get them out, whether it's starting the eviction process, or even offer them some money to move out.

But I've also been told that I need to contact a lawyer first instead of a PM company, and I'd need a lawyer to do the eviction. I'm thinking this may be jumping the gun, since if the tenant is willing to cooperate, then it won't ever get to the eviction point?

I'd appreciate any advice on the proper steps to take to get the ball rolling in getting this mess sorted out!

Thanks in advance!

[Paulette Midgette]

Hello @Stacy Weng,  I am a HAPCO member and went through an eviction last year.  @Steve Babiak is absolutely correct about the lower cost and service provided by HAPCO for the eviction process. 

However, I believe you have some problems that go beyond an eviction process and finding a management company. 

Firstly, tenants always have a lease of some kind.  If it is not written then it is an oral lease or inferred by action, meaning the action of the tenant paying rent creates a lease. Therefore, you will have to go through the process of giving legal notice and then completing the eviction process.  Secondly, based on your statements I suspect that your father-in-law is not renting in Philly legally.  In Philadelphia a rental is a business and you must comply with certain laws and regulations.  You must have a valid business license and current rental licenses.  You are also required to submit yearly tax returns on your business profits. Thirdly, if you father-in-law does not have his licenses and/or submitted tax returns he is not operating legally.

You cannot evict a tenant in the Philadelphia if you do not have the required licenses, etc.  In fact, you are prohibited from collecting rent.  So, any rent that has been collected is subject to being returned to the tenant because it is illegally received.  Possibly the tenant knows this and this is why she has stopped paying her rent.  Also, if your father-in-law is not making any repairs to the property and keeping it up to code, he may have crossed into the 'slum lord' arena.  There is a big push right now from one of Philadelphia's newly elected councilwomen to identify and punish slum lords.  It has been identified that the vast majority of slum lords operating in the city are from out of town and doing so illegally.  According to the councilwoman these slum lords are evicting tenants at such an alarming percentage that Philadelphia is experiencing an Eviction Crisis.

I believe you could work through most of this on your own.  It will take patience and many hours of sitting down at the city department of Licenses and Inspections.  With respect to the lien, again depending on the type of lien,  it you may be able to find the details on the Philadelphia Courts website.  It is public information and can be assessed by anyone free of charge.  Alternatively, you might be able to find someone (not a management company), like a friend or family who may be willing to do the foot work for you, so you don't have to spend so much time coming up to Philly.

I hope this helps and good luck.

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