new landlord, tenants overdue and no lease

General Landlording & Rental Properties
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new landlord, tenants overdue and no lease

Jay Garrison
Chicago, IL · Member since 2018 · 90 posts · 37 votes

Hi,

I just bought my first place a two flat with a garden unit in Chicago. The first floor is empty, but the second floor tenants haven't paid yet for April. I didn't find this out until the closing. The basement tenants have "moved out" but they still have some of their stuff their, and a car in the garage. The basement tenants have paid for several months, that is why they are moving out.

Suggestions? The previous owner was kindly and easy going, hadn't had a policy about late payments, and the tenants obviously took advantage. I would like to give the basement tenants a contract that says they have till the end of the month to get their stuff, or else it goes out. I would like to put the upstairs tenants on a lease with late fee terms and give them 3 days to get their April rent together. I will change the locks in the basement and garage so the basement tenants cannot just come and go as they please. How does that sound?

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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
7y

I agree with @Anthony Wick serve notice and get rid of them. Allowing your tenants 3 days to pay rent when they are already 2 weeks late is setting a very bad precedent. You are heading down the same kindly, easy going hobby landlord path as the last landlord.

If they on M2M terminate them with notice.

It's past time you sat down and learned your state landlord tenant regulations. Dealing with any tenant without first studying and understanding the law is going to have you in court very quickly. Do not communicate with your tennats until you know your rights and theirs.

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  • Andrew Angerer
    Rental Property Investor · Dayton, OH · Member since 2018 · 234 posts · 183 votes
    7y

    Be firm and upfront with everyone, once they realize you are soft on getting paid they wont care anymore. Let them know you are the landlord and if they have any problems then it may be time to move out. If you set high expectations now you will avoid more issues in the future. 

    1Reply
  • David Avetisyan
    Rental Property Investor · Glendale, CA · Member since 2013 · 685 posts · 334 votes
    7y

    During your escrow process you should have been provided leases, if no leases were in place, you should have Estopple certificates for each tenant. 

    If you want to issue a new lease, you must make sure the previous one has expired and your local laws allow you to make changes thereafter. 

    If there were leases in place at anybody point, regardless if a tenant is paying or not, you will need to evict them via an unlawful detainer, unless you find out they were already evicted.

    It does not sound like a good idea you change locks because that can get you in a lot of trouble.

    To your success! 

    1Reply
  • Anthony Wick
    Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
    7y

    @Jay Garrison

    Give 30 day notice for everybody to be out. Start eviction proceedings in case they don’t leave willfully. You don’t want any of them to sign a lease. You want them out.

    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    I agree with @Anthony Wick serve notice and get rid of them. Allowing your tenants 3 days to pay rent when they are already 2 weeks late is setting a very bad precedent. You are heading down the same kindly, easy going hobby landlord path as the last landlord.

    If they on M2M terminate them with notice.

    It's past time you sat down and learned your state landlord tenant regulations. Dealing with any tenant without first studying and understanding the law is going to have you in court very quickly. Do not communicate with your tennats until you know your rights and theirs.

    2Reply
  • Michael Wilson
    Rochester MN · Member since 2018 · 24 posts · 9 votes
    7y

     @David Avetisyan

    David I am looking to buy a 4plex that all units are currently rented out. I tried to look into what an Estopple certificate is, it essentially sounds like a lease agreement?

    0Reply
  • Shadonna N.
    Developer · . · Member since 2014 · 520 posts · 162 votes
    7y

    1. Find out your state landlord tenant regulations

    2. Find out if there was a lease and what was the agreement

    3. Find out your state landlord tenant regulations

    Given the situation is already messy, consider hiring a property manager to  get you out of the situation.

    Don't forget - Find out your state landlord tenant regulations

    0Reply
  • David Avetisyan
    Rental Property Investor · Glendale, CA · Member since 2013 · 685 posts · 334 votes
    7y
    Originally posted by @Michael Wilson:

     @David Avetisyan

    David I am looking to buy a 4plex that all units are currently rented out. I tried to look into what an Estopple certificate is, it essentially sounds like a lease agreement?

     An estoppel certificate is used to inform a potential buyer of commercial or residential rental property of the rights and privileges of existing tenants. The estoppel certificate requests information about rental amount, security deposits, lease terms, protected tenancy status, oral agreements with the landlord, amendments to written lease agreements, promises made by the landlord, who owns the appliances, and agreements with respect to the payment of utilities, e.g. water and gas. 

    In short, the estoppel agreement is meant to completely describe the nature of the relationship between the landlord and tenant. The goal is to put any prospective buyers of the rental property on notice regarding the rights and privileges that the existing tenants enjoy.

    An estoppel is sometimes requested in addition to a lease agreement or in lieu of, if no lease agreement exists. 

    To your success!

    1Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y

    Evict 

    0Reply
  • Jay Garrison
    OP
    Chicago, IL · Member since 2018 · 90 posts · 37 votes
    7y

    Thanks for the replies

    Thomas S said:

    I agree with serve notice and get rid of them. Allowing your tenants 3 days to pay rent when they are already 2 weeks late is setting a very bad precedent. You are heading down the same kindly, easy going hobby landlord path as the last landlord.

    If they on M2M terminate them with notice.

    It's past time you sat down and learned your state landlord tenant regulations. Dealing with any tenant without first studying and understanding the law is going to have you in court very quickly. Do not communicate with your tennats until you know your rights and theirs.

    I had asked my attorney and REA about this, and they told me that we would find out about the rent at closing. Of course hindsight is 20/20 but in the future I will look for more thorough representation throughout the process. I called my lawyer yesterday (yesterday was Saturday, we closed Friday afternoon) but she was unhelpful.

    I have called both tenants, asking them what they would like to do and can we meet, both begged off. Tomorrow I will contact the city agency that controls landlord tenancy regulations and ask them how to proceed; you are right I should follow legal guidelines but move to evict them ASAP.

    1Reply
  • Michael Wilson
    Rochester MN · Member since 2018 · 24 posts · 9 votes
    7y

    @David Avetisyan

    I really appreciate it, I will be requesting an Estopple certificate if my counter off mover further. Thank you very much!

    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    7y

    You are going to have to give a pay or quit and potentially evict the top unit.  The basement unit sounds like you were told they left although they have property in the basement and a car (I guess non operable) in the garage.  If they do not appear to be living in the basement unit but  have left some property, it is possible that could be considered abandoned.  Take pictures of all property as it was left.  Check your local laws, in the case of abandonment you could change locks and hold in storage (even in the garage) per the laws of your jurisdiction.   That allows you to start painting and such to get it rent ready.  Since you are consulting an attorney on the eviction, ask them about the abandoned car and property.

    0Reply
  • Jim Shepard
    Investor · Edwardsville, IL · Member since 2015 · 432 posts · 481 votes
    7y

    @Jay Garrison besides getting to know your State landlord / tenant laws I believe Chicago has stricter laws. One that I remember is you have to put their deposit immediately into an interest bearing account with their money only. The tenant gets the interest when they move out. If you don’t do this in Chicago the tenant can go after you in court and get 3 times their deposit back! So if their deposit is $1000 & you don’t give them their $3 worth of interest, they get 3 grand from you! Ouch!

    0Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    7y
    Originally posted by @Jay Garrison:

    Hi,

    I just bought my first place a two flat with a garden unit in Chicago. The first floor is empty, but the second floor tenants haven't paid yet for April. I didn't find this out until the closing. The basement tenants have "moved out" but they still have some of their stuff their, and a car in the garage. The basement tenants have paid for several months, that is why they are moving out.

    Suggestions? The previous owner was kindly and easy going, hadn't had a policy about late payments, and the tenants obviously took advantage. I would like to give the basement tenants a contract that says they have till the end of the month to get their stuff, or else it goes out. I would like to put the upstairs tenants on a lease with late fee terms and give them 3 days to get their April rent together. I will change the locks in the basement and garage so the basement tenants cannot just come and go as they please. How does that sound?

     If you are owner occupied you are exempt from the RLTO but I suggest reading it.  Lockouts, leases, notice ect are all covered

    http://chicago47.org/wp-content/uploads/Landlord-Tenants-Ordinance.pdf

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