Suggestions needed for dealing with a Tenant

Suggestions needed for dealing with a Tenant

Rental Property Investor · Kansas City, MO · Member since 2017 · 30 posts · 13 votes

First, I apologize for the length of this post, but I feel some background is needed.

Early this year I purchased a Triplex with 3 occupied units.  None were on leases so I got 2 of them signed into a year lease pretty quick.   The 3rd had a history of violence towards the other tenants and had anywhere from 8-12 people living in a 2/1, so obviously had to go.

1 of the remaining tenants in a 1/1 first floor Apartment is a single male

He has lived in that Apartment for 15+ years, and the previous owner did not pay a whole lot of attention.  This Tenant, in years prior to my purchasing the property, without permission from the previous owner has done at least the following:

  • Added a Swingset for his daughter who used to live there
  • Built a extremely not up to code shed attached to the back of the building which looks terrible.
  • Completely took over all of the interior common space and back porch with his stuff
  • Brought a Cat into the property
  • Parked an extremely dilapidated boat which has been used as a garbage container in the past, on a trailer with flat tires in the yard
  • Wired a power line into his fuse box to run a line to the enclosed back porch
  • And the last I know of, but by far the most entertaining, wired a power line from his fuse box into the common space, and back into his bathroom to power his...  Shower head.    Yes, he had LIVE exposed wires twisted together with no plastic cap hanging in his shower for years.   Why?
  • He has never paid his gas bill, so the heating system in that apartment has not been used in 15 years.  Instead, the previous landlord installed an electric hot water heater so the sale could go through.
  • Has caused the pipes to freeze in the walls by not keeping the door between the common area and the enclosed back porch closed.
  • He heated his apartment using 5-7 electric space heaters.  (This building has old wiring.  The wiring would not support the amount of power the breakers were set for, so the wires would catch fire and burn before the breakers would ever trip.   This has been fixed now as I saw that as an emergency issue)

The Furnace for that apartment is located in the Common area, so using the furnace, and keeping the door closed between that common space and the Porch will prevent the pipes from freezing.

When I got him on the lease, I gave him a pass on the boat... for now, and the Cat, and informed him that a lot of things were going to be changing, and that he needed to clear the common areas of his stuff.   The Lease also states that Gas Service is a mandatory utility to be setup in his name, or I will pay the bill and charge the amount back to him, along with an additional fee.

I told him that because the Gas lines and furnace have not been used in so long, that I would cover the initial setup cost and the first months gas, but he had to move it to his name.   So, I got recently got the gas service all setup and working, and covered that first month.   This allowed me to verify that the door being closed in the common area, with the furnace running, would be enough to prevent the pipes from freezing.

However, the Tenant has turned the thermostat all the way down, but still on, and I believe is still using the space heaters to supplement.  In addition, he keeps leaving that door between the common area and the enclosed porch open, causing temperatures to further drop in that room.

Now, he is complaining now that because I had the electrician disconnect his shower-head water heater  he can not take showers and has to go to his mothers house as the water will not stay warm long enough.   That apartment has a brand new electric water heater.   I am sending the maintenance company over to check on that and will fix it if that is actually an issue, however I have a hard time believing anything he says.  

He claims to be a contractor, and that he is currently building a house, but since pulling the power from his shower-head and getting the fuse boxes properly wired, he has called me for multiple issues such as the lights in his kitchen flickering... which turned out to be bad bulbs. But, he did not contact me about the fact that his toilet is running constantly which I found when I was there last (I pay the water bill). 

The upstairs apartment had a cockroach problem, which I took care of, and asked the tenants in both lower apartments if they had seen any sign of bugs.    Both said they have not.  1 of them keeps his place spotless, and this tenant does not.  However, he said that he had not seen any sign of anything.  However, when in there recently I moved 1 piece of furniture and they were everywhere.

In addition, his rent is routinely a few days past the 5-day grace period, with a complaint that the mail must be running slow (Even though his envelope is post-marked AFTER the grace period is over) He is trying to pay 1 month in advance, but every check he sends each month is anywhere from $10-60 short of covering the next month + the late fees.    For example, for him to be paid through December, he still owes $40, or $465 (low rent because he gets a credit for handling lawn/snow for the Triplex) if he wants to be paid up through January.   I could for example on the 8th of December receive a check for 450, meaning $40 in late fees will have accumulated on that $40 he owed to be paid up for Dec.... and poof, he has late fees due Jan 1...  even though he will only owe 15 to be paid in full for Jan...   and on and on it goes)

For Nov rent, I made an appointment with him on Thursday to pick up the rent check on Tuesday after work, which was technically 1 day after the grace period, but was going to forgive the late fees that time because arrangements had been made to pick it up... When I got there Tuesday he was not home.  I waited approximately 15 minutes for him to get home from work and sent a text.  He did not respond for another half hour.  I assumed maybe he was driving home.  When he did, he told me, 'I am at the movies.  I mailed the check on Saturday'.   That disrespect of my time was the end of my patience with him. He could have told me at any point he mailed it as he knew we had a set meeting time.

I know there is a learning curve in going from being the person who ran over the previous landlord constantly to me who does actually pay attention, and he actually has improved over the time I have had the property in many aspects, until I had his shower head disconnected.  His 1 year lease has another 8 months approximately left.   

I could Maybe file for eviction based on a couple minor breaches in the lease, such as being a few days late on rent, not having renters insurance, his likely not putting the gas in his name soon, leaving the door in the common space open, not notifying me of the bugs, and leaving all his stuff in the common area...    But, these all seem like minor issues and I am not certain if an eviction would even be able to go through based on this stuff.  And if it does, his apartment is going to need some reno work before its re-rented as its a bit of a mess too.

Anybody have any thoughts\suggestions?   I am worried about more vacancies, but at the same time, worried about frozen pipes damage...

I know that this is what property management companies are for, but as this is my first investment property in which the most expensive apartment was vacated shortly after purchase and has not been ready to re-rent until this coming weekend due to a ton of renovation needs, the property is most definitely in the red and with the credit cards hit from the renovation, its going to take a while to get this property to a point where its making a profit.    It WILL make a good profit, it just took far more up-front capital then expected with the reno and the long vacancy in the most expensive apartment.  

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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
7y

Read your state's landlord tenant laws, and figure out the eviction process. He is a danger to your entire building and should be removed from the property in accordance with local laws.

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  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    7y

    Read your state's landlord tenant laws, and figure out the eviction process. He is a danger to your entire building and should be removed from the property in accordance with local laws.

  • Linda WeygantPro Member
    Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
    7y

    I agree with @Mindy Jensen, but the first thing I would do is install an automatic closing hinge on that door between the common area and the porch.  You can still prevent frozen pipes while waiting for the eviction to come through.

    I get that this place has been a money pit so far, but sometimes you've got to just take those financial lumps on the front end in order to get a property where it needs to be.  Waiting to take care of this problem means that you could have awesome tenants in the other units that will leave as soon as their leases are up because they dislike living with the less than awesome guy.

  • Specialist · Fort Collins, CO · Member since 2018 · 557 posts · 191 votes
    7y

    As Mindy said, he is a danger to the building as well as the other tenants.  Make sure you're following state laws, but I would definitely get this guy out ASAP due to the breaches of the lease. You can't wait 8 months for this guy to move out... He could possibly burn the building down with all of the safety hazards you mentioned... Good luck!! 

  • Accountant · Saint Louis, MO · Member since 2017 · 409 posts · 362 votes
    7y
    @Dennis S. Fortunately for you, Missouri tends to be a fair state when it comes to landlord tenant law. Use of space heaters (if not allowed per lease), bug problem, and chronic history of late payments should be enough ammo to get the eviction through. As long as you can document it. I would say this seems like a case for why a m2m lease would have been better. I did that for a similar situation when I bought my triplex earlier this year. And thankfully I did, all I had to do was give 30 day notice for them to leave when their bug problem became to bad to fix with them there.
  • Investor · Louisville, KY · Member since 2017 · 199 posts · 253 votes
    7y

    Not that it helps now but the first mistake was placing the tenants under a new one year lease. Always leave under a month to month when you buy a property for this very situation. Life would be easier for you today if you could just hand this tenant a 30 day lease termination letter.

  • Rental Property Investor · Kansas City, MO · Member since 2017 · 30 posts · 13 votes
    7y

    @Mindy Jensen Yea...   Thats what I figured really.   Sucks to have to kick someone out after 15+ years, but ahh well.   I chose this business. lol   I admittedly very much suffer from the 'Nice Guy Newbie Landlord' problem most of the time, until someone pushes too far.

    @Linda Weygant

    @Linda Weygant The automatic closing hinge is a great idea actually.   I will have to look into that.  Yea, I know it will turn back around.   The first property is always the hardest from everything I have read, and it gets easier from there.  I just need to get it generating some profit to at least get back to breaking even, let alone paying for the next investment...

    @Katie Stewart

    @Katie Stewart I suppose I will likely be getting a hold of my Atty soon.    

    @Donald S.

    @Donald S. Being the first Lease, I used the pretty good one my REI focused Attorney had put together without many changes, and it doesn't mention Space Heaters. However, the new Lease I am building from that, the BP files, and my experience so far definitely does so that wont be an issue in the future.

  • Rental Property Investor · Kansas City, MO · Member since 2017 · 30 posts · 13 votes
    7y

    @Michael Jones  Yep.   Lessons learned and all that.   That's what we used to get rid of the original tenants in the upstairs unit.   Meeting with the other two and hearing the stories of getting punched from both of them, and the neighbors statements that it used to be a quiet house until they moved in resulted in just not renewing their lease.

    That being said, while they were written up on a month-to-month lease from the previous owner, it was a 1 page double-spaced lease that essentially said, 'This is the lease that allows [Tenant], reachable by [Telephone number] to reside at [Address and Apt#] provided they pay the monthly rent of $[Amount].  This lease automatically renews each month.      [Tenant Signature] [Landlord Signature]'

    Needless to say that lease scared the crap out of me and had to be fixed ASAP.    I should probably have just signed them to a monthly lease initially...  and gotten background/credit checks.    

  • Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y
    @Dennis S. Don’t forget “ nice guys finish last” thIs guy Has clearly had 15 years of bad traIning by the last IdIot landlord so Theres no “ fIxIng“ hIm . you need to evict and get him out . I know all too well it sucks when you have all this expense right out of the gate getting into a property and it seems like your never going to make profits *but it will come . This is very very common to have 3-6 months of trials and tribulations until you get the property stabilized and generating money . It’s part of investing bro . You’ll prevail and it’ll work out
  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    @Dennis S. I'm sorry but I only read about half your post and it was far more than necessary. You should get rid of this guy immediately, if not sooner.

    You think a property manager would be expensive? What's the cost of allowing these terrible tenants to remain in your building? I bet dollars to donuts your property is in need of serious maintenance and cleanup. You can't attract good renters or market rates because of the condition and the low quality of tenants you currently have.

    If it were me, I would kick these tenants out, fix the building up, and hire a property manager that knows how to find quality tenants at market rates and keep them under control.

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  • JD MartinBusiness Member
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    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    7y

    Wow. First question - if you knew all of this that he had done, why did you give him a new year lease?

    Second observation - unless you're related to the previous owners, you don't really know if he did all that stuff with or without their approval. In fact, one could say they gave tacit approval by not removing him based on any of what you wrote.

    Third observation - you should have some other method of getting rent other than you going to pick up the money. That's the tenant training you, not the other way around. If you have this in your lease, in my opinion you've made a big mistake. If you have some other way of them paying in the lease, you should be enforcing that.

    Fourth observation - why are you giving him a break for handling snow and lawns? That makes him one of your employees. Be a professional and get your own lawn & snow care company. That's part of running a business.

    Overall, you've got potential here in at least you're recognizing some things are a problem, but you really need to think about running this operation like anyone in business would run something they expect to make money for them. As for evicting this guy, since he's been there 15 years he might give you a fight based on minor breaches (and based on your own waiving of lease provisions) that may not help you legally. If you have his deposit (I assume you got a deposit when you bought this and/or made them give one to sign a lease?), ride it out, deduct his late fees at the end from the deposit and consider it lesson learned. Or try to enforce the lease and evict but be prepared to eat those costs as well. 

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  • Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
    7y

    I also only got about halfway through. Your first mistake is putting this person on a term lease. Why did you ever think it was a good idea to lock this person into a year lease, after seeing all these issues? You shouldn't even offer term leases to "good" inherited tenants.

    This person is clearly a danger to your building and everybody in it. Since you have already demonstrated that you are not knowledgeable enough to be a landlord at this point, hire an attorney, and use him to get this person out. You will likely have to give him your local version of a notice to quit or cure, but this person is not likely to completely change his life in 5 days. The end result will be an eviction.

    I agree with @Nathan Gesner above. If you try to handle this yourself, it will cost you far more than it will cost to hire an attorney.

  • Rental Property Investor · Kansas City, MO · Member since 2017 · 30 posts · 13 votes
    7y

    @Dennis M. The guy has definitely had a ton of bad training.  Oh I have no doubts this property will turn around.  Just need to get past the current issues.

    @Nathan Gesner The property was in need of some serious maintenance and cleanup when I got it, which is part of why the upstairs unit has been empty so long.  Its been a bit of a base location for stuff while getting the property cleaned up, as well as renovating that apartment itself.   There currently is only the 1 low quality tenant.  The other guy is all good.   Struggles a bit financially and rent increases may be a problem for him in the future, but he has never been late that I have seen.   The rates on this place are not bad at all for the area.   The bad tenant has a discount monthly for handling.  

    @JD Martin To your first and second points, I didn't realize all of this when he got that lease.  Admittedly my mistake, I did not properly screen the existing tenants like I would new ones before I signed them to a new lease.  

    I was distracted in dealing with the 8-15 violent people in the large apt who were destroying the property and causing neighbors to reconsider living there. Every wall and door had holes.  So at the time this problem tenant was a minor issue in the grand scheme, and I knew dealing with upstairs was going to take awhile and I needed a bit of income so the property could at least pay for itself.   

    In hindsight, I should have re-signed him to my version of the month-to-month lease.

    To your third point, I don't go pick up the checks.  This was a one-off situation. He was going to pay to overnight it on Saturday morning.  I told him that I would be there Tuesday and he could just give it to me instead and that I would forgive the late fee as if overnighted I would have had it on-time.   Cozy is the preferred method of rent collection, but this tenant refuses to set it up due to a fear of a past identity theft issue.  I have the option of mailing a personal check in the lease provided its received by the end of the grace period.  One bad personal check and they have to mail cashiers checks if they still can not use Cozy.

    To your Fourth point, he had been handling building maintenance for years anyway with the previous guy.  I told him that I would no longer allow that, but he could handle lawn and snow.   The reason being, until I got these initial issues resolved and someone in the upstairs apt, the building is actually costing me every month.  I gave him a $50 credit per month to handle the lawn and snow provided it was done well and I never need to give him a reminder.  Its in the lease that addendum is cancelled in the event a reminder is needed.    It was going to cost me a good deal more to have a company do it...   But, I probably should have went that way anyway.  

    I had his deposit transferred over from the previous landlord, but there was no move-in inspection or any documentation except the prior 1 page 'lease'.  So, with the new lease we got the move-in inspection done and had him sign a document regarding how the security deposit would be handled, so we are all good there.

    I fully acknowledge that I am making some mistakes, but I am learning as I go on this.

    I will likely try and ride it out a little while unless there is some new large issue or he keeps leaving that door open. At least until the large apt. is rented as I really can't have 2 of the apartments empty at this point.

    @Andrew B. In the future I will likely have inherited tenants sign a new month-to-month lease, and transition it to a term lease later.  I prefer to keep tenants on a term lease when possible with the stipulation that it will renew as month-to-month with a higher rent at the end. 

    I already have an attorney I am working with for any eviction proceedings that need to go through.  Once I decide that it is the time to do it, I am going to give her a call and let her take it from there.  MO is very landlord friendly, and a notice to quit is actually not required, however for me at least having an Atty handle that deal is. 

  • Member since 2016 · 13k+ posts · 12k+ votes
    7y

    As so many have pointed out, and you admit, you have made some mistakes. No, let me rephrase that .... a lot of mistakes.

    Your biggest problem however is that you are still making those mistakes moving forward. You can not change the past but you sure as hell can fix the future.   

    Go back to the beginning and undo your mistakes. Draw a line in the sand, spell it out in no uncertain terms and tell him he either tows the line or you will evict.

    1) tell him to remove the shed

    2) remove the swing set

    3) Clear out common area and back porch

    4) Get rid of the cat

    5) Get rid of the boat

    6) ban the use of electric heaters

    7) treat the place for roaches

    8) strictly enforce no pay no stay.

    You goal at this point in time (tomorrow) is to make him conform immediately or put him out. You have been playing a game with him for too long and you are losing badly. Time to get serious and make him the tenant you want or put his *** on the street. Right now he owns you so lets see if you can do the job and turn that around.

    You should be able to accomplish all 8 points in less than 7 days. If you can not or will not .... you lose.

  • Rental Property Investor · Kansas City, MO · Member since 2017 · 30 posts · 13 votes
    7y

    @Thomas S.  A couple responses to your points

    I know that mistakes have been made, however I am not still making those mistakes going forward.  Resolving those issues, and the advise of people such as yourself  is the purpose of this post.   Overall, as JD Martin said, I would prefer to ride it out through his lease, but if these issues do not get taken care of by him very soon, primarily the open door/freezing pipes issue, then he can deal with my Atty and her eviction process.

    I have notified him that if I find that door left open again I will consider it willful endangerment of my property and begin the process.  (The door does close securely and remain latched with no chance of blowing open.  The only other tenant that has access to that common space has his door to that area blocked with his dresser and does not ever enter it as it is full of the poor quality tenant's belongs)

    1)  We will be removing the shed once this guy is out either way.    I don't want him doing any additional work to the property in any way.  If I had him remove it I suspect that he would leave a pile of garbage in the backyard, or move it into the common area...   IF he didn't manage to destroy the side of the house doing it.

    2) Swingset - Initially we were thinking it didn't really hurt to have the swingset there as it could make it more appealing for families.  The Swingset is actually in decent shape.  However, thinking more, I am not sure I want that kind of liability there...  so it will likely be going away soon too.

    3) Yep.  I have told him to get his stuff cleaned out, and been told, 'I will work on it.   I don't need that stuff anyway'.  Months later, there is a bit less stuff, but a lot of it is still there.    I need to get with him on this stuff again.

    4) The cat is accepted in the lease.  He seems to take decent care of it, so not telling him to get rid of the cat.

    5) A boat of that model is accepted in the lease, however I did not agree to a dilapidated/not licensed vehicle and trailer, so this will be dealt with soon one way or another.

    6) His lease did not mention electric heaters.  New leases going forward all will.  However the lease he signed refers to a 'community rules' document that did not exist yet as of the time he signed.  I am working to move a bunch of the maintainence rules and such into a Community Rules document and will include that.  I believe I simply have to give him 30 days notice to any changes in the Community Rules.   I will check on that...

    7) Treatment is underway.  He is having it done at his cost through 'a guy he knows'.   I have seen signs of treatment, and a greatly reduced number of them in there.  I informed him If not gone at my next inspection for them which will be in a couple weeks, I will be having an exterminator company come deal with them, at his cost.

    8) He has been paying in advance for MOST of his rent.  Its just the few bucks left that he gets the late charges for every month at this point. He is not free-loading by any stretch on the rent by any stretch, but my having to give special attention to his rent due to late fees every month is getting very old...  That said, him paying extra for the late fees is not terrible at this point as that small amount actually does make a difference in the properties finances.

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