Inherited Tenant - Not Paying Security Deposit

[Gary Jordan]

Good Evening BP,

I recently purchased a 4 unit multifamily that was fully leased.  One of the apartments was recently (28days earlier) leased to a new tenant.  The  lease required an $1350 deposit.    The tenant and landlord signed a lease to that fact.   However apparently there was a verbal agreement to allow the tenant to pay $100 a month because she could not afford the deposit.   During closing the former landlord disclosed that the tenant had yet to pay her first deposit.  Because the former landlord and the tenant entered the verbal agreement I decided I would play ball and honor it.    Fast forward 2 months and the tenant still hasn't paid a the $100 monthly.  However she has paid her rent on time and has now scheduled her first $100 deposit.

Because of the poor verbal agreement I am tempted to make her sign a new lease or give her a cure or quit notice with clear written expectations.

Thoughts or other options/opinions?

Gary from Maine

[Nathan Gesner]

You bought a problem so it's time to solve it. If she doesn't pay this month, give her a short, simple notice:

A couple other tips:

Never make verbal agreements. They should be in writing and signed by all parties.

Every agreement should have a deadline and they should be reasonable, usually no more than 90 days. This goes for authorized improvements like painting and also for payment plans. For example, it doesn't make sense to accept $100 payments on a $1,350 deposit because you would only collect $1,200 during a one-year lease and you'd only have $600 if the tenant trashed the place and left you high-and-dry six months in. The deposit is your leverage and that leverage is necessary on the first month, not just when the tenant leaves.

Never accept payments on a security deposit. Always demand it up front, in full, using certified funds. Instead of taking on this Seller's problem, you should have told the tenant to pay up immediately or move out.

Every agreement should include consequences for failure to abide by the agreement. Hit them with a Cure or Quit, Pay or Quit, or something. Don't let them skip a month or two. Don't renegotiate because of drama in their life, even if it's real. Make an agreement and stick to it.