First property - providing notice to tenants on verbal lease

[Andrew F.]

Hi all -

My wife and I recently took the plunge and purchased our first duplex, which has two 3/1 units side by side. The previous landlord owned the properties for just over ten years, and did effectively nothing in the way of maintenance, upgrades, or even managing his tenants. Luckily for these tenants, their rents were way under market as the previous owner never once raised their rent from 750 month. He also never had them on leases, so side 'A' has been verbal month to month for 6 years, and side 'B' for 10 years. 

Right after we closed, on Oct 15th, we sent a letter to the tenants formally introducing ourselves, providing them key information, and also providing them with notice that either a written lease needed to be executed within 30 days (by Nov 15) or they would need to vacate by Nov 30. They were provided with two lease options, either 6-months at $900, or month to month (but with a written lease) for $975. [The local market is $1100+ and I also provided a printout of a rentometer report with 1-mile radius.]  I held their Nov 1st rent at their $750 rate that they'd been paying for years, just to ease the transition. 

Tenant A immediately called and asked to do 6 months, so we quickly executed a lease. 

Tenant B: When I stopped by after closing and tried to change the lock on the front door (old landlord didn't have keys) they were put off and told me they owned the lockset and nobody had a key but them - I didn't change the lock but took a copy of the key - but it was an odd interaction. On the lease front, these tenants said nothing until I reached out and asked them about 10 days ago what they were thinking. They indicated they were still mulling their options over, but if anything, would likely go 6 months. Last week, they reached out and asked if I could provide them a lease to review, to which I indicated I was happy to do if they were certain they were electing to stay and for which option (frankly, not wasting my efforts preparing a lease if they're not planning to stay).  They said 6 months, so I prepared a lease and dropped it off on Friday in their mailbox since they weren't home. I texted the tenant to let him know, and asked to review and let me know questions ASAP, as we need to get this executed. 

This evening (two days later) still hadn't heard anything, so I texted and asked if it was ready for me to pick up and fully execute. The tenant now says he would like to have his attorney review the lease before signing. I said that's of course his right and fine to do, but we have a strict deadline to have a new lease executed by Nov 15, otherwise they've been provided notice to vacate by Nov 30. Of course, no response to this, so now I'm left to wait and wonder what happens next. My gut tells me they may be a problem, as they also never filled out the 'tenant application' form I provided with the below letter (and I know they got the letter, because they asked me detail about security deposit from old landlord that I noted in the letter). Between being put off about someone now having access, the application that requires them to provide me with their income info, and the increased rent, I can see this being difficult. 

A few questions:

1. If they don't sign the lease by Thursday (Nov 15), should I serve some type of formal notice/reminder to vacate by Nov 30th? If so, what should that look like?

2. If they go completely dark on me and stop responding altogether, at what point should I contact an attorney to begin the eviction process? This seems a bit unique, as there are no written lease documents. 

3. Does my letter (see below) technically provide clear notice? I was told that verbal leases only require 30 days notice, so I felt that not only giving 30 days notice to sign a new lease or leave, technically I was giving them 45 days to know the options before having to physically vacate the house. 

Look forward to hearing your thoughts!

(Letter below...)

On October 12, 2018, the property located at “XXX” was acquired from the previous landlord/owner.Through the due diligence process during the purchase, it is our understanding that there are no formal written leases in place, and your tenant status has been on verbal month to month terms. Rest assured, your security deposit of $750 was transferred to us at closing. We sincerely appreciate your assistance and patience during the inspection and appraisals that were necessary to complete the purchase.

Please accept this as your 30-day notice that the current month-to-month verbal lease is terminated, and if a new written lease is not executed with the new property owners by November 15, 2018, you will be required to vacate the premises at “XXXX” no later than midnight on November 30, 2018.

As we discussed, your November rent is due no later than Nov 1st, and we are holding November at your current October rent rate. Please mail a check or money order to XXXX. The check should be made payable to XXXX.

In order to provide you with flexibility, we would like to offer two different term options under a new written lease. Additionally, we’ve provided you with an attached market rent report, which provides data on average rents in a 1.5-mile radius.

The leasing options are as follows:

• Six (6) month term; effective 12/1/2018 and expiring 5/31/2019.
  • $900 per month + all utilities (gas, electric, water, sewer)
  • Requires written lease; 60-day minimum notice terminate at expiration
• Month to Month; effective 12/1/2018 and no expiration.
  • $975 per month + all utilities (gas, electric, water, sewer)
  • Requires 30-day minimum notice from either party to terminate & vacate

Either of the above options will require a written lease outlining all terms, conditions, and rights of both landlord and tenant parties.

Please consider the options and call, text or email to let us know what you would like to do. I’ll prepare a lease to that effect, and then stop over at a mutually agreeable time to review with you and execute. In addition, please complete the attached ‘Rental Application Form’ to the best of your ability and mail back to us for our records.

In the meantime, if you need anything please do not hesitate to contact us. We will be in touch with you to coordinate a few different repairs on the property for general upkeep and in order to pass the borough code inspection. We appreciate your patience during this, and will try to take care of these repairs as quickly as possible to minimize interruption.