Cash for Keys and a houseguest turned tenant

[Christopher Olsen]

OK, so here is the backstory. My father passed away unexpectedly in January. He didn't have a will, but my brother and I are the only two heirs and will inherit the house whenever the courts open back up. Our current court date is in July. He had no debts and the house was paid for. We have secured the services of probate attorney. We have petitioned for an independent administration and fully expect to receive one. So much for the easy part. 

Complicating matters is fact that when he died, he had a friend staying with him "for a short while until she gets on her feet." 

I'm sure you see where this is going. 

She does not have a whole lot of interest in moving out any time soon and has indicated this in as many words: "This is my home", "It's my legal residence", "I have nowhere to go" etc. She has been receiving mail there and has put the cable bill in her name, but not the other utilities. 

Our original plan was to give her 30 days notice in April when we had administrative rights to the estate and evict her after that.  But then the court dates got pushed back, and California put a stop to all unlawful detainers until 90 days after the state of emergency is lifted. Apparently, we can serve her notice, but there is no way to enforce it. 

Since she is not paying rent and has no deposit to lose, and has a fully furnished, recently remodeled,  3br 2ba house all to herself, there isn't a lot motivating her to move. I really can't blame her. She has several adult children and siblings who live locally, so I'm willing to call her bluff and say that homelessness is not an issue. 

So it is possible that this could go on for a VERY long time. 

So here is my plan, and I need to know if it is a good one.

1. Right now we tell her in writing that on the date we get administrative rights to the estate, the following things will happen: (around 60 days from now)

• She will get 30 days to move out., 
• She will have to begin paying rent at the market rate for the house, which she cannot afford. 

2. If she moves out on day we officially own the house (about two months from now, she gets a generous cash-for-keys check (negotiated ahead of time, of course). 

3. If she does not move, she will owe us rent equal to the going rate for a house of that size in that neighborhood for the amount of time she stays beyond the July date when we get title to the house. We will also move forward with the eviction process.

So here choice would be simple. She can leave approximately 60-70 days from now with a (for her) decent amount of  money in her pocket, or stay and be evicted, ending up broke and owing us money. 

I have some questions, however.

1. She is currently paying no rent and has no rental agreement. No one has asked her to pay anything. If we go to her and say "Ok, as of such and such date, your rent will be $2000 a month" and she says "No it isn't" and refuses to sign any kind of agreement to that affect, will she still owe the rent after she leaves?

2. Would occupying a house after refusing to sign a rental agreement make her a trespasser and not in need of an unlawful detainer to evict?

3. Another thing we will will inherit is everything in the house - furnishings, appliances, electronics etc. She has a few personal items there, but most everything belonged to my dad.  Is there anything stopping us from holding an estate sale at the earliest opportunity and liquidating the contents in the house that belong to us. If she really wanted to stay there, she would then need to go out and purchase her own furniture and appliances. 

My brother and I have no interest in becoming landlords. We want nothing more than to sell the house and be done with it. 

[Mindy Jensen]

Hey @Will Barnard, I know you have a nightmare squatter story from CA, but I can't find it. Can you share with this member, and any tips for their situation?

[Will Barnard]

Here is that thread @Mindy Jensen was referring to: 

https://www.biggerpockets.com/forums/67/topics/64944-the-occupants-from-hell-

As to your questions, I recommend you speak with an attorney as your questions are legal ones and I am not an attorney. Any info in this post is just my experience and opinion and NOT to be construed as legal advice.

1. Check with attorney on that.

2. Yes, you need to file for an UD to evict unless she agrees to voluntarily leave or accepts a cash for keys offer.

3. Check with your attorney but the personal items in there could easily be claimed as her items unless you have documented proof (photos and an itemized list) proving your father owned them. If possible (again, check with attorney), get in the house ASAP and document every item inside, perhaps removing some items (if you get the OK from attorney) for safe keeping. If they all are not of much value, I would not spend much time on that but would start the process to evict ASAP and when the courts open back up, you have a jump start on paperwork and filings. Since she has no lease and you are the rightful heirs, you also have the right and ability to enter premises and ensure its safety, etc (again, talk to attorney on this).

I have heard of others having some "rough types" move in to a few of the rooms to make it very uncomfortable on the trespasser in hopes to get them out. I am not condoning this approach, merely stating what i have heard in the past.

[Matthew Paul]

I would have the estate sale now . And maybe even rent rooms to some rough looking bikers . 

[Christopher Olsen]

The renting out the room idea was actually semi-endorsed by our attorney. The fun part is that I teach at an art school where I have some really scary looking, tatted and pierced co-workers who happen to have MA's in theater and wouldn't mind a fun gig over the summer. 

[Christopher Olsen]

She's not a lowlife druggie or a criminal (as far as I know), but she went from being somewhat well-to-do to being very low income due to various personal, financial, and professional decisions. My brother and I actually knew her when we were little. They lived down the street and she and her husband were the big spenders of the neighborhood.  Now she tells us that she can't afford her own place because she is saddled with credit card debt. Based on other things she has told me, she probably started taking social security when she was younger than she should have and is now realizing that $900 a month isn't enough to live on in California. 

All of this is why I think that the cash-for-keys might work. But my big question, more than anything is whether or not we can charge her rent if she does not take the cash for keys, and if she would owe us that money after being evicted. I don't think she wants to go through that process any more than we do, but I also fear that she might try to milk this for all it is worth unless there are clear consequences for doing so. 

[Will Barnard]

There can certainly be consequences for her but again, you should consult your attorney on the best approach for that.

[Tim Winter]

@Christopher Olsen, I would recommend contacting an RE attorney in your state. Here in AZ you'd have a Tenant at Will, which is tenancy given without written permission but have otherwise been given the right to stay (typically verbally or informally to friend/relative.) Those tenancies typically are still binding on landlord and tenant, such as you have to keep the property in safe and habitable condition and also have to give notice before entering. The tenant though has to give compensation and not cause damage beyond excess normal wear and tear. 

Thus.. I would give her notice like yesterday. Give her notice of non-payment and no notice to cure. Then after the expiration, file for the eviction right away, don't delay. Even in states that are not taking evictions, some are still processing non-COVID related evictions remotely as they understand that in some instances such as these, there is no reason for them to be staying if not paying, and their continued staying could cause you harm. 

If you want to really play hard ball, contact the police and let them know you have a squatter. Without a written lease, and no owner to verify they have permission to be there, they are trespassing. If they come out and chase her out, and she returns, there are next steps you can take to have them remove her immediately and possibly jail time. (doing damage, causing disturbance, possession of a weapon, doing drugs, etc.)  

Now on the other hand, if she's a friend of the family and you want to play nice, you can make an informal offer of either "pay us rent until we sell" or find another place in so many days. Anything she agrees to, get it in writing (i.e. bring it with you and have her sign right then!) I would leave cash for keys as the very last resort after you take ownership and need her to get out immediately to start prepping it for sale.

To echo another person's response, give her notice right away that you are going to enter the premises, and take inventory so things don't "walk away" or go missing on you. 

[Mark Pedroza]

@Christopher Olsen

Since your dad didn't have a will you and your brother could file as co-administrators of his estate (Notice of Petition to Administer Estate) and petition the court for Letters of Administration.

This will give both of you legal authority to sell the property and by even hiring an eviction attorney or you both can continue to own it.

You both have a legal interest in the property but mot ownership (Yet).

My feeling is this tenant may try to file for Adverse Possession (Cal. Civ. Proc. Code § 325) against your father's property but not the estate until the probate administration has started BUT I could be mistaken about adverse possession..

[Nathan Gesner]

The odds of this person having the financial means to hire an attorney is probably pretty low. As others have suggested, I would probably start by getting into the home and taking control of your dad's personal possessions, particularly if there's anything of value. I would consider stretching that out to every day for a week, maybe blast some really loud metal, heat fish in the microwave, constantly talk to her about your eviction process, or whatever you can to annoy her and scare her off. If that doesn't work, then I would hire an attorney, eat the cost, and be done with it legally.

[Christopher Olsen]

Originally posted by @Mark Pedroza:

@Christopher Olsen

Since your dad didn't have a will you and your brother could file as co-administrators of his estate (Notice of Petition to Administer Estate) and petition the court for Letters of Administration.

This will give both of you legal authority to sell the property and by even hiring an eviction attorney or you both can continue to own it.

You both have a legal interest in the property but mot ownership (Yet).

My feeling is this tenant may try to file for Adverse Possession (Cal. Civ. Proc. Code § 325) against your father's property but not the estate until the probate administration has started BUT I could be mistaken about adverse possession..

We filed for co-administration in January. Our original court date was in April, and now is pushed back to July. 

What I'm trying to do is avoid the whole eviction process. In that scenario, everyone loses. 

[Christopher Olsen]

Good News! (hopefully)

We have already been to the house several times to collect valuables, photos, our own personal property, and important papers. Another thing I inherited was POA and sole trusteeship for my 100 year old grandmother. My dad kept really bad records, and shared zero information with me (I didn't even know my grandmother had a trust) and there was a lot of detective work involved in getting this info.

The tenant has been mostly cooperative, albeit very nosey, with us in that regard. 

As I mentioned in my original post, it is mostly things she has said that have us very worried that she would not leave willingly. If she truly had nowhere to go and only to $900 a month SSI, I actually wouldn't blame her for trying to stay there for the absolute longest amount of time all the way up to the day the sheriff arrives. Added to that were comments of a very sentimental nature about it being "her home" and how my dad and her were "planning a life together," and clincher -  "Your dad said you would take care of me."  As I said, my brother and I barely know this lady. 

Well, I finally reached out to one of her family members (oldest daughter) who has assured me that if she has not found a place to stay by mid-June, that she will come and get her or help her out financially in order to find a place. It turns out that this person does have some options. She also, in my opinion, might be growing very tired of living there with all of my stuff (which I'm pretty sure she has not touched). 

So hopefully, we are back on track for being able to put the house on the market in July. 

[Christopher Olsen]

Here's an update:

On July 14 we finally got administrative rights to the estate. 3 days later, we sat down with her and our realtor and offered her a very generous relocation package amounting to six months rent if she moved out that weekend. She turned it down. She did agree, however, to cooperate with us selling the house while she was still living there. She even signed a COVID-19 waiver.

The next day, a for sale sign was on the lawn and we had an offer three days after that.

I had previously reached out to her family and they were somewhat sympathetic to our dilemma. They had not, up until that point, agreed to co-sign a lease for her if she found another place. Her only income was $900 a month social security and her credit was not good. I was more than willing to pay a lump sum of money, but I had to draw the line at co-signing a lease for someone I barely knew. But without a co-signor she was not going anywhere any time soon.

The final deal went like this: I gave her $3500, a room full of furniture I didn't want and an old truck that we were planning to donate to charity. Her daughter and sister co-signed a lease on an apartment. She moved out a week before the house closed. As it turned out, according to her family, she had actually deluded herself into thinking that she was going to get to live there indefinitely. What turned her around was the for sale sign going on the lawn and the realization that we were serious about selling the house. 

The money came out of my dad's estate so I didn't really miss it, considering the house sold for 40k over what we asked and about 100k more than what we had thought we would get for it at the time my dad passed away.