2 Tenants in a Quadplex Joining Alliances: How would you handle??

[Cassidy Burns]

HI BP,

I've run into a little problem with 2 adopted tenants from an existing owner.  The first 8 months they were great, paid on time, no issues, etc.  As of the last 3 months they have been a nightmare.  One has definitely taken the power position and has gotten the other on their side.  Late of rent, pushing back on late fees (is it worth evicting over $50-60 in late fees), putting in a ton of maintenance requests that need to be done IMMEDIATELY (according to them), but then never respond with photos/ times of when the contractor can come in and/or don't want the contractor in while they aren't home.  One even called the old owner to ask questions about the building.  Very frustrating.

Self management has been great thus far, and quite frankly is necessary due to the lack of good property managers in the area. BUT THIS is really starting to frustrate me.  How would you handle this?

I would love to evict both of them as the building is very sought after and one of the nicer buildings in town so would lease up quickly.  

Any advice on how to get these guys back on track and/or if I should try to get them out and start fresh would be greatly appreciated.  

[Jason D.]

@Cassidy Burns if they're late, start the eviction process right away. If they push back on late fees, let them know that if they pay on time, they wouldn't have late fees. Have all correspondence in writing regarding maintenance.

[Jill F.]

What does "pushing back on late fees" mean? Did they not pay the charges? My lease says late fees are late rent. Do you know the law about late fees in your area? In Ohio there are a few grey areas... a case law that ruling that a daily late fee might be excessive in some situations, you can't charge a late fee with an oral lease. Make sure you KNOW the rules pertaining to late fees before you proceed further. 

Are these tenants on month to month leases? If so send a letter explaining that if all fees are not paid before noon on Nov. 30, that the lease will not be renewed and tenant should be prepared to turn over the unit on Dec 31. Send a a non-renewal as required by law at 12:01 ON Nov. 30 if you don't have all your money.

Regarding not allowing contractors in. Tenants do not get to determine contractor access. Do not ask tenants when contractors can come in, instead give the tenants notice that contractors will be on site at date/time with notice as allowed by law in your area (24-hours here) and you let them in. With a few contractors I have the contractors schedule directly with tenant tenant's so long as the problem isn't costing me money (water leak, etc.). Then it is the tenant's problem to make themselves available if they want the problem fixed. Make sure to respond to tenant's written complaints in writing.

[Richard Sherman]

@Cassidy Burns I agree with @Jill F.   It is also a good idea to read some of the other posts on tenant issue.  There are many that have similar issues.

1. Boundaries.  You need separation.  Our tenants do not know we own the properties, they think we work for a company that owns them.  This will stop the whining and trying to get special treatment.

2. Enforcement.  This is not a negotiation.  This is the lease these are the rules follow or leave, your choice.  I would 100% be starting the process when they are late and taking on the late fees to what is owed. 

If the repairs are legitimate then you should do them, but it is their responsibility to arrange access.  I would have a heart to heart with them and tell them the new rules.  Tell them you have investors or whatever if you want and you are getting heat to not renew based on these issues maybe.  Are rents at least at market or are they low?

[Mary M.]

I agree with @Richard Sherman, except my tenants know I own my properties....  I dont have any issues from that...   anyway, i would have a heart to heart asap. My way (within the confines of the lease) or the highway.  If you are not happy here, I will let you our of your lease with a 30 day notice. Buh Bye! 

[Cassidy Burns]

@Jason D. this has been the reoccurring issue for the last 2-3 months, I start the eviction process on the 5th day (VA Laws) go through the process, add late fees , they pay the rent to avoid eviction, and then push back on the late fees. So my question is, is $75 late fee worth evicting over? Especially mid November/December. I know it is going to continue to happen, just vacancy has been what i'm trying to avoid.

Hi @Jill F. thanks for the response , very helpful.  I so I guess the question is, how do you get back on track if you haven't been the best in terms of the access.  I now understand I allowed the tenants to take a position of power in terms of allowing contractors in/out.  

@Richard Sherman Rents are $50/less than market.  $550 current.  Market is $600.  So i'm working in a lower income space.  Doesn't have the heart to heart put me more "accessible" and/or giving them the perception that I am going to be involved during the entire process, which obviously I am trying to avoid.

@Mary 

@Mary M. yes my tenants know that I am the owner behind the emails but don't have my personal phone #.  I have 2 team members that are the main point of contact for all repairs, leasing, showings, etc.  Maybe I just need to train those 2 individuals a littler better.  I just ordered them @Brandon Turner 's book Managing rental properties.

[Thomas S.]

The advice you have been given will turn out to be a waste of time. Your tenants believe they own you and are in fact correct. You have not been in control of your property and your tenants at this point will need to be replaced. It is unrealistic to believe you will turn them around.

This is not a question of if it is worth evicting for $75 it is a question of whether you intend to continue to allow them to own you.

I would enforce your lease to the letter, serve a eviction notice if you are allowed and give them proper notice to non renew their leases as soon as you legally can.

Thinking you can "work with them" is laughable. Get rid of them both and find new tenants that appreciate what they have.

Unfortunately this is common in C class properties and with this type of tenant a iron fist is the only thing they understand. Get them both out asap and start fresh.

[Patrick M.]

"I would love to evict them"

They have laid out ample reason to proceed. They are begging you to. Yes, it is worht $100 to get rid of them. It is worth far more- you have lost  control of your investment. As with the many, many people who post here you have given up opportunities to begin proceedings against them. Now you will hit them with paper and they will go crying into court that it is because you refuse to do the necessary repairs that they have requested.

Make no mistake- you must proceed to end the tenancy right away, but this idiotic advice that you should take them out to breakfast and have a "heart to heart" with them is the single most crappiest piece of advice I have ever heard. I guess you should buy them a Christmas present too. I have dealt with inherited tenants who tried to control me and my asset- they were removed. This my little pony solution of sitting down with them is a dead loser.

Draft a notice and detail every violation, in detail. Do not put their side into it- only yours. Paper them. Do not take their calls- let them leave a message or text. They will very likely not formally write back as many are far too lazy. 

"Have a heart to heart" my God, are there tenants on here posing as landlords.

Get rid of them ASAP- good luck. Trust me, when you come out of this you will be a much better landlord!

[Nathan Gesner]

@Cassidy Burns let me jump on the bandwagon with a couple notes:

1. Is $50 worth evicting over? Yes! The other option is to let the tenant decide when/if they pay rent and see how that works out for you. If you let them get away with little things, they will start pushing for big things. That's why you're in the situation you are in right now.

2. You get them back on track with a very simple, written notice that they are to abide by the terms of the agreement or face eviction. However, this notice is only as strong as you are; if you aren't willing/able to enforce it than you're really just making yourself look weak. Collect your thoughts, put your plan down in writing, consider all aspects, and act when you are ready.

3. Go to www.narpm.org and search for property managers. There are a ton of them and I'm sure you can find a good one. No offense, but you're struggling to handle it yourself so how much worse could they do? If you find a good PM, they will get better tenants at better rates and pay for themselves.

Some tips for finding a good PM:

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

I hope this basic guide helps. If you have specific questions about property management, I'll be happy to help!

[Matt P.]

@Cassidy Burns Another vote for getting them out and getting some Tennant's in there that are up to your standards.

[Jim Cummings]

@Cassidy Burns. You say - "I would love to evict both of them as the building is very sought after and one of the nicer buildings in town so would lease up quickly."

1. You indicate the Units will 'lease up Quickly". So, send a Notice that as of X Date the Rent and any late fees will be paid or a Notice to Vacate will be forthcoming, followed immediately by filing with the Appropriate Judicial Body to institute an Eviction. NOTE: You'll have to "Landlord Up" and stick with it - no weaseling out or the tenants will continue to run the show.   

Repairs: What does the lease say about notices and time periods for doing repairs. Read what it says and follow what it says to the letter. If you don't like it - make notes to yourself as what needs to change and make the changes in the lease with your new tenants. 

You can do this - you just have to develop the backbone to do it!  

[Joe Splitrock]

@Cassidy Burns where do the late fees stand as of right now? I know they refused to pay them, but how did you respond to that? Did you agree to waive them or is it still considered outstanding?

I would send them both an invoice for late fees not paid and give them 7 days to pay on the invoice. Follow up with a phone call explaining that the late fees need to be paid with December rent.

Tell them if they are unable to pay rent on time, that they will need to move out. This is not an eviction. I would just explain that I am a new landlord with new rules and if it doesn't work for them, no hard feelings. Open the door for them to leave and very often they will, but if they stay make it clear they need to follow the new rules. Eviction is only necessary if they don't fall in line and refuse to go of their own free will. In my experience people usually leave when asked.

[John Warren]

@Cassidy Burns fire these tenants as soon as it is legally possible. I have found that self management is only easy for those land lords who are able to have the tough conversations with the "bad apples". I have had practically zero problems with folks I have placed. I am evicting someone right now that I inherited because she thinks rent is optional... the quicker you clean house, the happier you will be. 

[Richard Sherman]

.Ok.  I usually do not do this, but I am calling BS on some of these suggestions.    @Cassidy Burns listen, the bell is already rung, they ALREADY know that you own the property so you can not realistically get them to believe otherwise.  So your options are

1. Evict (non renewal) which comes with associated costs (fees and time if you have to evict, vacancy and turn costs.)

2. Drop the hammer on them.  I did not say cook them a meal  and serve them tea (@Thomas S.. ) 

It very well may turn out you need to evict them for being jackasses, BUT that is a cost.  This is NOT about winning, this is about running a business...and vacancy and turn costs are REAL costs.  Ego has zero place in this business and the idea that you should just evict anyone who is a hassle is total BS and very bad advice.  You get rid of people who cost you money or time, not so you can feel like a BOSS.  If you were my PM I would tell you to mount up, get tell them that if they do not toe the line they had best be looking for another place and every time they violate the lease you take appropriate action  which is spelled out in the lease.  There should NEVER be a conversation about IF a late fee is applied.  It is ALWAYS applies, I don't care if it is my 94 year old grandma THOSE ARE THE RULES READ THE LEASE I HAVE NO CHOICE :)

The idea that you can not change tenants and their behavior when they have been given too much wiggle room is incorrect.  Every building I buy has issues, I WANT issues, thats WHY i get a deal.  Some people get evicted but usually when the new rules are in place and they see they are enforced they get in line.    Or should I just blanket evict 20-30 units at a time because people have some sass?  Seriously...it is about money and costs not about ego.   Maybe when my kids dont clean their room I should get new kids too...or I could be a freaking adult and apply some rules.  :)   Ok, I will hand over my soap box.

[Kurt Jones]

@Richard Sherman Learn the business. And learn to evict. It’s a pain in the a$$ but it’s part of this business. The first couple of times I really learned a lot. Now it’s just another piece that’s operationalized.

[Joseph Back]

@Cassidy Burns I would definitely evict if they continue to cause problems being that you are self managing. Got to put a price on the time you are spending dealing with these tenants each month, not to mention the stress I am sure it is causing. As long as you are not really leveraged and can afford to have a vacancy or two for a month or so I would go ahead and evict.

[Dan Maciejewski]

Know the landlord tenant laws (Landlord Tenant Act in FL) in your area -- they will tell you the wording that you need to use for the notices and when you can use them. Some rules in layman's terms for us:

"When counting the 3 day notice period, do not include the first day of service, weekends or holidays."

"Service of a Florida eviction notice can be accomplished by personal service on the tenant, by leaving it with an adult tenant at the unit, by certified mail or by posting it on the unit’s door. The person serving the notice must indicate the manner of service."

In my Lease, County and State, rent is late on the 2nd --  if the tenant hasn't already notified me, they will get a 3-day pay-or-quit on the 2nd or 3rd.  Then, if no payment in 3 days depending on certified mail service and weekends and holidays,  eviction is filed.  In my county it's not much to file yourself, and at that point, I may or may not accept rent -- I only have to during the 3-day period.  In your case, if they decided to play eviction chicken with us, they are going to have to appear.

In these cases, although I'm an accommodater, I'm very cut and dried and tend to be very enraging.  My partner is much more of a high-assertive manager-type and does much better dealing with game-players like you have, and will tell them what's going to happen in no-uncertain terms.  

My advice to myself  in this situation would be to use the notices and explanations first, and then offer them an out to break the lease with no repercussions -- as fast as possible -- and even possibly offering deposits as an incentive (i doubt they are in a position where they don't have damages).  That's how we non-renewed our inherited tenants that thought they were going to play games and we had a clear building in 3 weeks.  A vacancy that can be corrected is better than being stuck with customers that actually cost money.

[Colleen F.]

Aside from the preceding suggestions as you get them out  either by laying down the law or simply saying this isn't working lets settle up and you move , you need to address repairs. Be clear, these repairs will be done, these will not be done as they are not repairs but requests.   I can't imagine there are tons of actual repairs but I could be wrong. 

For repairs, give notice to enter in advance by the time required per your state/lease and then enter.   I no longer tolerate tenants who must be home,  I tell them they are free to be home but I won't schedule around them.  I do work with co-operative tenants if I can but when they sign the lease I am clear I won't delay repairs so they can be present. Also the timeframe for repair is decided by you and what is a reasonable time for something in an apartment to be out of service.   

[Kurt Jones]

As for the laws, many county clerk websites (at least here in FL) have free downloadable forms for 72 hour notice and the eviction filing paperwork. 

[Ned J.]

Follow the laws and the lease to the letter...PERIOD. No exceptions, no debates, no discussion. Be professional but very firm..... they will try to call your bluff and if you flinch its game over. Be fully prepared to take the eviction the entire way and make that perfectly clear that your aren't taking any BS anymore. If they continue to be a PITA, then evict or do not renew.

 Yes, this is a business.....and you don't want to make decision that cost you $$ but there is a point in time where its not worth a few $$ to deal with certain people.....and often short term loss of $$ works out to be long term gain of $$.....i.e a better tenant, better rent, less hassle etc etc.

These type of tenants pray on your fear of losing $$..... if you operate your business out of fear, you will lose in the long run.

[Dennis M.]

As ancient Wise philosopher named Kenny Rogers once said : you gotta know when to hold em and when to fold em , when to walk away , when to run .. It’s time to fold em . As others poInted out Do not hang their stockIngs wIth care , donot buy them gIfts do not sIt down wIth them for a fIre sIde chat Over eggnog and crumpets as some hobby landlords suggested . Learn your eviction laws and get them out . If it’s as desirable as you say it is,a vacancy won’t be long and you can get a much better tenant in

[Julie Dike]

Get them out of there.  In Virginia, you could start the eviction process immediately and have the property back in January or February.  It might be worth offering to return their deposits if they'll leave sooner without having to go to court . . . but not if they're not paying rent in the meantime -- that's just postponing the eviction.

When you serve the pay-or-quit notice, are you including all the late fees on it?  Not a lawyer, but I'm pretty sure that's important if you end up evicting over those late fees.

[Darwin Pitts]

@Patrick M. Jesus love your response. Had me rolling. I like the way u wrote and approached this. Will take notes for myself should I find myself in this predicament.

[Doug Utberg]

I would offer a hybrid suggestion - 

Make a deal with the tenants to leave the property.

It's very clear that their time in the property is going to end.  (These tenants are spoiled children ... the only deal you should make with them is a deal to go away)  They can either leave voluntarily for a modest monetary incentive (which should be less than the total cost to evict) or go through an eviction.

In the end, a contract doesn't mean anything unless you bring in lawyers to enforce it.  That enforcement cost is frequently very high.  It's more important to get the bad tenants out quickly than to prove you're right.  If they'll make a deal to leave, make a deal.  Otherwise, get the eviction going.

[Cassidy Burns]

I just want to say THANK YOU to everyone that took the time to comment on this.  All have given great advice.  

I am studying up on my lease and tenant laws now.  Will keep everyone posted on how it goes, but my goal after evaluating is to get them out as soon as possible, take my losses and get tenants in the units that appreciate the service/home we are offering.  Also, thank you for the suggestion on property manager sites, i'm going to be searching for someone to take over.

Thanks again.

[Richard Sherman]

Originally posted by @Kurt Jones:
@Richard Sherman Learn the business. And learn to evict. It’s a pain in the a$$ but it’s part of this business. The first couple of times I really learned a lot. Now it’s just another piece that’s operationalized.

I appreciate the advice.  Here is my point, going straight to a process that gaurntees you lose money due to vacancy and turn over costs instead of setting them straight is just flat out bad advice.     If he imposes the late fees, in writing, gives notice for late payment, and drops the hammer on the BS repair work and they still act out, then sure, don't renew.  

This business is about money, making and saving it, not showing what a bad *** you are by evicting everyone that looks at you sideways, especially when it was caused in the first place by lack enforcement.