Phoenix, AZ · Member since 2012 · 38 posts · 1 vote
I am in the process of purchasing a SFH that has tenets in place (for years), but not in possession of a contract and have not paid their former landlord for a long time.
I was going to speak to them and even pay them to leave if necessary (cash for keys). If they refuse to accept, do I need to file formal eviction process?
Real Estate Broker · Seattle, WA · Member since 2016 · 16 posts · 2 votes
9y
Hey there Mark! Congratulations on your purchase.
I just entered into a somewhat similar situation myself a couple weeks ago when I purchased a duplex and found that one of the tenants in the downstairs unit (which needs moderate rehab and who had supposedly been evicted) was still living in the unit.
My approach was first to talk with him on the phone (less intimate/emotional than an in-person meeting) and offered him the equivalent of ~80% of a month's rent to vacate the property. I was firm in my offer and assured him that this was something that needed to happen "one way or another".
On the same day that I spoke to him, I sent a 30-day notice to vacate along with a contract outlining the cash for keys terms, which I asked him to sign and return to me. This contract is certainly not necessary, but I felt it made the process feel more formal and gave him greater confidence that he would be paid after moving. YMMV.
I will be visiting the house this weekend and from what I understand, he has mostly moved out at this point. We'll see what the reality is.
I think the most effective pieces of this process were having some prepared remarks for my initial phone call with the tenant, being understanding that this is a difficult process for them, and maintaining firmness that the unit needs to be vacated and that it would be unfortunate (but a certainty if he doesn't vacate) for both of us to have to go through a lawsuit.
Phoenix, AZ · Member since 2012 · 38 posts · 1 vote
8y
I just wanted to update this thread with what happened after I completed the purchase of the SFH.
It turns out AZ passed something of an "anti-squatter" law a few years ago. Basically, if you own a property and there are people living there without a lease, you do not need to use the standard eviction process. A simple call to the local police department and the cops will show up, give them a few minutes to gather what they can & they will then force them to leave.
Even though I was legally entitled to do so, I didn't feel right about doing that to people out-of-the-blue, so I offered them the ability to stay for an additional two weeks and to assist in the transition, a cash payment of $1,000 (like a cash-for-keys transaction) to help them along and respect the property. They grudgingly accepted. Despite that fact that they were ex-felons, it seemed fine at first, but as we got closer to the deadline, they quit responding to my calls and texts.
Sure enough, when the day to leave had arrived, they still had a ton of junk that hadn't been removed, so I was forced to call the cops at that point. It turned into a huge fiasco, but after a lot of screaming and wailing, they were finally gone.
In hind site, I would have used a process server to deal with them, because I was drawn into too much of their drama. There were a lot more issues than what I wrote here, but it was a great lesson.
I'm finishing GC bids now and hope to start work on Monday. I'm glad I didn't give them the money, because the reno is coming in about 40% over my initial budget, so I'm going to need to shave down our costs to realize a decent profit.