Tenant thinking that they are Landlords

[Steve K.]

We are in great state of Pennsylvania and have tenants who have been renting from us for 2+ years. When they initially rented from us, they rented an apartment in a property that I personally owned. Now they are renting at a property that I currently manage and own small %age of.

This current property is SFR was fully rehabbed to 2019 standards before renting to them.

Maintenance Issues & Concession given to them

We had a heating issue in late Feb-March, after a few HVAC service calls it was determined in April that furnace need replacement. However, it was still operational. We bought space heater for them. Later, our HVAC temporarily replace the part to fix the unit. We wanted to convert from Oil to gas (better investment), but PennDOT rejected the utility company's permit due to conflicting work on the same road by another contractor.

We also cooperated with tenants and accepted late payment for the 2-3 months since she was working every 2 weeks, during Covid-19. No late payments were charged.

Heating issues remain because of slowness (5+ months already) of government agencies to approve the permits. Tenant agreed to manage with room heaters and insisted on put Central Air for winters. (HVAC tech suggested to convert to propane as an alternative for winter)

About the tenants and habits
They are in early 20s and have a toddler. The guy has been unemployed since 2017 and cannot find a job until now. They fought with each other, I have personally heard that. (None of my business to interfere if it is not abusive) The tenant has been mostly on-time when it comes to payments. Mostly they are cooperative and understanding to maintenance issues after some convincing. Tenants are bit messy and unorganized (that how they chose to live, and we never interfered how they live). The guy punched a door on my personal property, and I deducted it from the security deposit to train them. (Thanks to BP community)

Updates to property after tenancy
At tenant previous requests, we installed Central Air in June 2020 for the summer expecting that they would live another year. They insisted that we should put Central Air in. Now it’s whole another story, read below.

Lease Terms & Security Deposits
Dec 2019 – Ending 6/30/2020 (Expired). The expired lease says automatically renewed for 1 year. Nominal% increase at renewal. $100,000 renter’s insurance required. 2 months written notice to vacate. We have their 1-year security deposit. 2 months penalty to break the lease in middle is also stated. Our lease states, we need not send any renewal notice to tenant or notice increase in rent may be sent.

The dispute and underlying reasons
Last week of May, we started asking the tenants that they need to increase their renter’s liability insurance to $300,000. Additionally, add our company as a “interested party”. Then, tenant asked to renew lease for 6 months, we refused, and they were OK with 1 year. We offered them no rent in exchange of new insurance and liability requirements. At that time, they seem to have agreed.

After repeatedly following-up about a 3-4 weeks and 5-6 times in June, tenant does not want to comply to new insurance requirements, stating that they have consulted with other people and it is not a standard practice to add an “interested party”. However, did raise the coverage to $300K. This was done 3-4 weeks after continuous follow-up and was not done right.

Then, they wanted to speak to the owner directly. After the call was arranged, when I told them the call would be 3 way and from an unknown caller, now they do not want to talk stating we want to know the owner’s number. They wasted owners time as well. They demanded to see owner in person and that was an outrageous request. Then we had them call our insurance broker, which they did. Then they seem to understand why we want to be an interested party.

On June 30th (Last Day for lease). We gave them following three options: -

1. 1 Year Renewal, No Rent Increase for the year if they raise the liability to 300K and add us as an interested party
2. 1 Year Renewal rent increase by nominal % as stated in lease. Compliance to new insurance requirement is optional.
3. Or Give a notice in writing by July 1st and move out by August 31st

On July 1st, the tenant chose option 3 and she notifies me via text that they will drop notice in my mailbox. Of course, no notice came in my mailbox. I later get a text saying, if it is OK that if they can stay 1-2 months after (They are assuming we cannot rent that fast after).

On July 2nd, we replied that is not an option and month to month is lot expensive and it is not offered currently. I insisted, review 3 option given before at let us know by July 3rd.

Later that day, I get a call from the guy stating that they are looking to buy a house. The call was pleasant (No cuss words or threats, etc. from him, that he typically does). Of course not, he is trying to negotiate favorable terms with us. I told him that I do not make decision. He tells me that everything traces by to my personal address. I said, sure it will because I am the face to the company and manage the property. He says he has right to know who the owner is. I told him Mr. President has right to keep his taxes private, so he has right to nothing. Do you all agree?

We are OK with that and understand their position. Again, he said, they will drop a notice on July 3rd.

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My concerns based on Tenants history, habits and behavioral patterns: -

(Their issue is that they like to burn bridges)

They will leave us with a mess to clean. Last time, I spend much more money for clean up when they left the previous property. (They are messy and lazy)

They may leave us with unpaid water/sewer bills

Last time, their move planning was bad, and they overstayed at our previous property to by 7-10 days. They technically occupied both properties. I was told by the guy that I am stressing him out. (I feel bad for his lady who chose him)

They could possibly damage the property. Hope not. (They were charged for a damaged door on last property.) Now we have damage addendum signed at the time of lease execution. I’ve photos/videos of the property how it looked before it was rented to them. I also have a documented inspection reports, which list all issues that property has, so they not accidentally charged an item, when they leave.

Original lease states, tenants will allow showing during notice period. Off course, they did not comply to it last time. On top of that we have less chances to get new tenants because of the mess situation.

My Questions: -

(Please note most of the communications we have had with tenants are documented in writing and can be used as an evidence)

I would like to know if we did something incorrect and you suggest improving next time.

According to old lease terms lease has already automatically renewed for a year, however, they texted the give notice on July 1st. They have until July 3rd to pick any of the 3 options stated above and there is no other option for them. I think we are very fair to them; do you agree? How will PA courts look at it?

There is a past due balance from previous lease terms plus unpaid bills (not yet invoiced to them). We do not want to receive partial rents and experts know why. We use Cozy.co management system. I need to collect future rents and past dues. How should we safely collect rent on time without seeing them? I am looking for an option where I can refuse partial payments or full rent payments. Any suggestions?

We suspect that they have not maintained the renter’s insurance for entire or part of the lease. This is because they hid some sections from screenshots shared over texts during the dispute. That is breach of previous lease terms. What are the ways to find out?

Let us say we decide to take this to the court, do we or they any grounds? What reasons our “Notice to Quit” have?

Let us assume they leave us with expense to pay and which their 1-month security deposit will not cover, what is our recourse? Pursuing judgement is my last choice on people in their early 20’s, hey if you push the limit, I will. What information do I need on them to file judgement on them? Is copy of driver’s license/Govt ID enough in PA?

One tenant is collectable, has a job and enough money in the trust/or another account that is controlled by their grandparents. Tenant get a check from it, to pay monthly expenses. Can the judge tap into that account to pay for past due and damages, what information would be required?

Moreover, I am not sure if they would find a house to buy or not. We wish them good luck. I want to ensure that we are protected. If they want to stay for another year, we gave them an option. At the point we think otherwise because of the headache they are causing or may cause us.

I am planning to give them notice to vacate, should I or not? She already chose option 1 via text and they have until end of the day July 3rd to pick another option. Should notice to vacate via e-mail suffice? Do the courts require read receipts on e-mail notices? Can notice be sent via text?

How to do I ensure that we can resolve this without going to PA courts? What would you do if you were in my shoes?

Please Private Message me anything that is personal in nature or if you have questions that cannot be discussed here.

Thank you for reading and I appreciate your inputs. (This was my longest on BP)