Serving a notice to vacate: What would you have done?

Question

I bought a quad last month through VA financing. With accordance to VA financing I have to occupy one of the units within 60 days.

The four tenants are all pretty nice people:

Unit 1: Retired military recently divorced man who pays one time every month if not 1 week early. Has lived at the unit 2 years now

Unit 2: Elderly woman who has lived at the unit for 7 odd years and pays on time, does get sort of picky with the maintenance, however.

Unit 3: Older retired military gentleman who has lived in the unit for 25 years. Pays 2 weeks in advance every month.

Unit 4: Husband/Wife/8 yr old son. Wife is the daughter of the elderly lady downstairs. In the process of filing for bankruptcy. Genuinely nice people from my dealings with them the past 1 1/2 months. Paid 2 days late last month and only paid half of rent on the 3rd followed by the rest on the 10th as agreed upon. Rental history from previous owner shows that they pay their rent if not late a few days. They have lived at the unit for 2 years.

I decided to let go Unit 4 as I saw no reason to let any other tenant go. All tenants pay the same rent amount. I did offer a $500 incentive if anyone wanted to volunteer and leave, no one took it. So today I served the notice to vacate and now the mother is threatening leaving also. She thinks that I should have let Unit 3 go since he only stays at the apt half of the time and when asked if he wanted to volunteer and leave he replied that he was merely "too lazy."

I do see their point that it would be much easier for Unit 3 to leave as his financials make it much easier for him to find another place.

As I sit now I may be losing 2 tenants with this decision (not really too upset about this, I'd prefer not to live adjacent to someone who has it out for me...)

I'm thinking I made the right decision but just wanted anyone's thoughts on this.

Thanks,

-Glenn

Bill Walston · Answer

Hi Glenn - My first question to you is:  Do these tenants have leases or are they on a month to month?  If they DO have a lease you may have jumped the gun on telling any of them to vacate.

There is no standard rule to follow when taking over a property with tenants in place.  Each State has its own rules about whether or not a buyer of a property can terminate a signed lease agreement between a tenant and the prior owner of record before the expiration of the lease.

In some States a lease agreement runs with the land, meaning that the new owner of record must adhere to any current lease agreement that a tenant may have.  In other States there is no requirement.

You should check with a good real estate attorney about your State laws.  (But you may have already done that, in which case . . Good for you!!) :-)

Chris G. · Answer

Lazy money is the best money... why kick out guaranteed sources of income.

#4 is late and in the middle of a bankruptcy, and her mom is whiney.

sounds like the best choice was already made

Glenn Espinosa · Answer

@Brian:

I don't believe I shared any information regarding the other tenants to these tenants. Elderly lady took it upon herself to speak to the retired gentleman and asked him if he would leave and his response was no due to being too lazy.

@George:

I don't know myself. Elderly lady says she will move out in order to find housing for all of them together considering the couple may have a hard time finding something on their own.

Thanks for the responses guys.

Brian Levredge · Answer

You made the right decision for several reasons.  If they are all paying the same rent why would you kick out someone who has live there for 25 years unless his rent is way below market. He's never going to move.  It's great when people pay on time but you also don't want someone who is constantly eating into your margins with maintenance, especially when it's for non issues.

While it's difficult in smaller buildings where the neighbors may know each other, you really don't want to give anyone ammunition against you. Not saying you did, but the less you say to anyone, the better, and you especially don't want to be discussing the business of some of your tenants with other tenants.  You could inadvertently be setting yourself up for a Fair Housing lawsuit later on.

George P. · Answer

I wonder if them filing BK might have any complications?

Glenn Espinosa · Answer

Hey Bill,

All of the tenants are on a month-to-month.

Glenn Espinosa · Answer

Thanks for the reassurance guys. I'm sure I made the right decision. If the mother wants to leave also then that'll just open it up for me to rent that apt at market rates so win/win.

Michael R. · Answer

I agree it was the right decision. They were late anyway with the rent so it would have been my choice as well.

Ryan B. · Answer

I would have made the exact same decision.  The two military guys sound like ideal tenants.  Let the old lady whine, it was a business decision.

Serving a notice to vacate: What would you have done?

Most Popular Reply