Only Tenant on Lease asking if Husband Can Move In After Jail

[Rebecca Styer]

I just closed on a property yesterday. At closing the seller hands me a letter from a single tenant requesting the landlord give the OK for her husband who is getting out of jail in February to be able to stay there, the address, and the landlord contact info. He's in state prison supposedly for DUI.  She had previously been living with her daughter and she moved in in August. I find it impossible he is doing that much time in STATE prison for just a DUI.

A little bit about the purchase. The building cash flows as-is very well. The roof needs replaced and the wiring needs redone/ replaced as it is still knob and tube. In a nutshell I could easily spend 30K on just deferred maintenance. The seller gave us a $11500 credit to complete absolutely necessary repairs like the roof and repair to some of the electric service. 

The rents are under market value by at least $50 per unit (it's a 3 unit building). I plan to raise all the rents in 6 months by $30 which is aggressive but fair - there's no way they could find cheaper housing unless they were renting a just a room. This tenant has the nicest unit. 

Her lease is up at the end of July. The unit is SMALL. I actually have another unit around the same size and couples look at it and walk out (even though I warn them it's best suited for one person). So I can't imagine they would stay beyond July anyway. She was terrified of the rent increasing when we looked at the building. She insisted she couldn't pay a penny more. 

To get to the point, I don't want to rent to him. I'm thinking of writing her a letter explaining that it is not the policy of our company (we have an LLC) to rent to recent convicts (Please help me with the terminology). I've faithfully done credit and background checks for any tenant I've ever rented to in the last 5 years so I have proof I stick to my guns about this. I'd like to allow her to break her lease as long as she gives me at least 30 days notice. My market is hot and I'll have no problem finding a tenant in that time frame - even with the rent increase, even in winter. I want to make it clear I'm not evicting her and she absolutely can stay the term of her lease. But I need to come up with parameters so that her her husband isn't squatting. The current lease in place says it's a $75 per month charge for allowing anyone else to live there without consent. I'm going to also inform her that the rent is being increased. I was only going to raise it by $30 but in order to essentially sway her to just find another place, I'm considering telling her it will go up by $50 - she really does have the nicest unit. Is that too aggressive?

Any feedback is appreciated!!