How would you handle inheriting these tenants...

[Suzanne A.]

Hi all,

I'm under contract on a single family and I will be inheriting the tenants.  A husband and wife, and two daughters have been living there since August 2017 and they take great care of the house. They want to stay 3 more years. Here are the caveats...

1. The named "Tenant" on the lease doesn't live at the house and was a co-signer, and she pays the rent. The people who actually live at the house (except 1) are listed on the lease as "Occupants".

2. The "Tenant" pays late every month to the property management company.  The current owner things the property management company allows this so they can collect late fees. (BTW I will be managing the property myself)

3. The husband is not on the lease AT ALL.

This is certainly not an ideal situation.  Here's what I'm thinking...

1. Make the co-signer sign up for Cozy and automate her payments (I use cozy for my other properties too)

2. Have all parties sign a lease addendum adding husband to lease.

Questions...

-The way the lease is currently set up, with the co-signer as the "Tenant" and everyone else merely as "occupants", the occupants are not liable for any unpaid rent if co-signer decides to stop paying? Can I rectify that through an addendum?

-Should I screen these people for criminal, background and credit? What if the husband has a criminal history? Should I evict based on that? (Seems a little harsh, if they haven't caused any problems?)  I'm assuming that the husband and/or wife has some terrible credit or criminal history since they used a co-signer. 

Anyone have any suggestions or things I should look out for?  It's my first time inheriting tenants and I don't like feeling like I'm not in the driver's seat. 

[James Wise]

Originally posted by @Suzanne A.:

@Thomas S. thanks for the tips. 

@James Wise it's a year lease expiring in August. 

 Here is what I would do. I would make my own lease & have them sign that. No addendum to current lease. Now you can ask them to sign it now but you cannot force them to sign it until their current lease expires. Assuming they don't sign your lease now & you are at the point where their lease expires you can give them the option to sign your lease or move out. No other option will be acceptable.

I would make all of them the tenants. They all get treated the same. No sense wasting time on who is an occupant or tenant or whatever other mumbo jumbo was in that old lease. It's irrelevant to you what they classify themselves as. What you want is as many people on the hook as possible. In the event they don't pay you want to be able to hold an eviction over all of their heads not just one of their heads.

Screening isn't necessary. Reason being they are already in the property. We screen before we place people into our properties so we limit our chances of facing a financial loss. They are all ready there so now you just need to deal with the hand you are dealt.