Baltimore City Tenant Issue

[Matthew Keeney]

My friends have a house in Baltimore City that they've been renting out for less than a year. Their tenants broke the lease early and talked the owners into having their parents move in immediately after. This all unfolded rather quickly and the owners got scared their place was going to sit empty. So last night they met the parents and verbally agreed to rent to the parents with no due diligence at all. The new tenants are supposed to move in tomorrow and have paid first months rent with no lease signed.

 I'm urging them to slow this process down and do their research first because their are several red flags. The owners are transferring the previous security deposit over to the new tenants without even going over damages. Can the owners return the rent and slow this process down at all? Or would their be legal repercussions if they do background checks and they find out that they don't want to rent to these people? These are dear friends of mine and I would hate to see them go through an eviction or have to cover two mortgages. HELP PLEASE!

[Jon Holdman]

They should speak with an attorney about whether or not their verbal agreement is binding.  If not, they should restart the process.  I fully agree they should treat these as two separate transactions.  My lease has a fee for failure to give proper notice, i.e., a lease breaking fee.  The fee is equal to the security deposit.  Break my lease and I keep your full deposit.  And you're getting a bill for any damages.  Deal with that, first.  Then screen the new tenants and collect a full months rent and security deposit from them, assuming they pass.

My real advice is that your friends should sell.  I truly, truly mean that.  If they are so worried about having a vacancy that they are willing to put a tenant in place with ZERO screening and are willing to let the old tenant walk all over them they are not cut out to be landlords.  And it sounds like they are not in a financial position to do it.  Missing a months rent is something that absolutely happens with rentals.  They MUST, MUST, MUST have cash reserves to deal with this.  Further, there are lots of other things that can go wrong that are far more expensive than a mortgage payment or three.  Like the six grand I spent a few years back replacing a sewer line.  If your friends cannot "cover two mortgages" they should not own rental properties.  End of story.