What's a Fair Notice for Evicting Tenants After Purchase?

Question

Hello:I've just closed on my first IP (4-unit) in New Hampshire. I need to do some renovations/updating that requires vacating all the units, and I'm wondering what a fair amount of notice would be to prevent the current tenants from doing damage/delaying things further. They are M2M, so I need to give them 30 days per law, but they are currently paying 60% of market value. So, I'm essentially hitting them with a pretty big (although shouldn't be a shock) blow to their budget. In a perfect world, the sooner they're out, the better. And I have no reason/insight (other than the fact they're currently grossly underpaying) to believe they wouldn't respect a 30 day notice. But, in a practical world, I don't know them from a hole in the wall or what they're capable of, and would like to avoid any potential retaliatory damage, or even forcing a legal eviction onto their records due to true market sticker-shock/lack of savings. My thought is to give them a 60 day notice, (I'm not even sure I can get a contractor in there much before that). But, I'm curious about other's experiences with these situations. Should I take the cold-hearted (but better for me) "hit the bricks" approach, or give some extra time, to hedge a risk that may or may-not be real?

Joe Splitrock · Answer

@Nick Mace eviction is when you go to court to have someone forcibly removed. What you describe is just non renewal of lease and notice to vacate. The majority of tenants are good people, so stop assuming the worst without knowing them. Just because you are throwing them out of their home, doesn't make them bad people. I would meet with them and explain the situation. Give them 30 days to vacate, but tell them they are only responsible for rent up until the day they leave. That way if they find a place sooner, they can get some money back and you get them out faster. I would also explain since you are renovating the property that you will not be taking security deposit deductions, provided they are out on time and remove their belongings. Another thing that would help is offering to give them a fast and good rental reference (provided that is truthful to your knowledge). I may consider a little flexibility to extend the time frame to 60 days if your local rental market is tight. Hold it at 30 days to motivate them, but extend if they need it to bridge the time into a new property. Use common sense. If someone has a plan to leave and just needs a few more days, eviction is pointless. If they are hoarder that is going nowhere, file eviction as soon as they pass the 30 day notice. Keep in touch with them on their move progress. Do a pre-move out inspection a couple weeks before they are set to go and gauge the situation.I would argue that being "cold hearted" is not better for you. Treat people with respect and be reasonable if you want your business to succeed.

Theresa Harris · Answer

Is there a reason you want all 4 vacant at the same time? I'd do them one by one so that you still have rent coming in while you are doing the renos.

Nick Mace · Answer

@Joe Splitrock Thanks Joe. That's pretty much dead-on with my gut/way of usual business. Here in NH, it's all one process. Your "Eviction Notice" is your 30 day notice to quit (for reasons other than non-payment, breach, etc..). After the expiration date (min. 30 days) you move to the writ stage, which starts the litigious process of the eviction (what I understand to be the "eviction notice" of most other states). In other words, if I just had a conversation with them to give them 30 days notice, and they ignored it. I then need to start over with an eviction notice, and another 30 days before I can do anything in the way of removing them. So, it just makes more sense to give them the notice using the official form to cover your bases.

Nathan Gesner · Answer

Yes, you should give them 30 - 60 days notice and stick with it. It's not your fault they've been renting so far below market and you're not responsible for their future. All those years of paying cheap rent, they could have been saving up and bought a house. Follow the law, but focus on you and yours. Let them worry about their situation.

Nick Mace · Answer

Unfortunately, yes. It's an FHA house-hack, so I'm living in one, and the other three are all involved in the same renovation (swapping BRs for a more practical/rentable layout). I've factored 3 months vacancy into the project, but I'll be able to get about $800/month more in rents doing the reno, so it's worth it in the long-run.

Nick Mace · Answer

Thanks for the insight Scott. It sounds like there's more of a chance tenants will just delay-delay as long as they can, than to do any kind of retaliatory damage to the premises for a short notice (and that the one's who would damage, would also be the ones who would be delaying anyway). So, if that's the case, I think the 30 days is definitely the way to go. I'll just need to check with my lawyer on whether giving them an extension beyond that (if needed) could trigger the eviction stay here in NH, but I can cross that bridge when I get to it.

Scott M. · Answer

You sound like you want to take a reasonable approach and that may be appreciated and followed by some and might be taken advantage of by others. Out of 4 tenants there is more than likely 1 trouble maker in the group. If law allows you to do a 30 day I would do a 30 day so you can start the next steps as soon as you can. You may need the legal leverage with 1 (or more) of them so best to get that clock ticking. For those that seem to be putting in a good faith effort to move and find a place you can give them extra time VS file and put a spot on their record. Generally speaking 30 days do not have an impact on a tenants record. But by the end of the 30 days you will know who is going to be a problem and who isn't, or at least who doesn't intend to be. I think being fair but also protecting your downside is the right thing to do.