Tenant Lawsuit. Need advice!

[Alex Stewart]

All, I have a challenging situation that I would like some insight on from the community. I have a rental property I purchased in December 2017 that I rehabbed and rented out in March 2018. The property had been vacant for years and at some point the city had tagged it as effectively “condemned” until certain code violations were resolved. I made the repairs and rented the home out without knowing these issues were outstanding (I genuinely don’t remember seeing the tags on the door). Needless to say, the city posted a red tag notice on the door 10 days later and the tenant could no longer enter the home. I can honestly say that the home was safe and I would have no problem living there personally but the city is furious that permits weren’t pulled and this home seems to have had quite a history with the city (not in a good way). We are still in the process of resolving the issues by pulling permits and re-doing the work but its a lengthy process and will still be a couple more weeks until it is resolved. Finally, I get a lawsuit letter from the tenant’s attorney today claiming emotional distress, hardship, food costs, lodging, etc. to the tune of $30,000 even though they moved into a new home within a couple days of leaving my property. There are more details but I tried to summarize to make it an easier read. What would you folks do here besides the obvious of hiring an attorney? What do you think is a realistic outcome/resolution? Thanks to all for your input!!!

[Nathan Gesner]

Whether you knew about the code violations or not, you rented the home to these people and then had to kick them out. That's not their fault and you owe them for the inconvenience.

$30,000 is ridiculous and unjustifiable. The cost of hiring a professional mover would be around $3,000 depending on family size. They had to rent a hotel room and eat out for a few days. All told, they are probably out less than $5,000 which could be settled in Small Claims instead of hiring an attorney. Did they even try to contact you directly and ask for assistance with their moving expenses or did they just go straight to hiring an attorney?

I would not hire an attorney yet. I would write them and explain the situation, apologize for the inconvenience, and offer to pay their moving expenses. However, I would require receipts for everything. If they moved themselves, I would contact a local moving company and ask for a rough bid to move a family of this size or a household of your size and then offer that amount to the tenants.

Try to deal with them directly and nip this in the bud. If they refuse, document everything and find an attorney.