New member and advice request

[Peter H.]

Hi,

My name is Peter. A friend introduced me to bp; I was so excited and started podcast from episode 1 to episode 50 in a month or two. I started real estating investing - pretty much just buy and hold for about 2 years in Austin, TX. Managed for a short while and due to family issues need to hire a property manager, and have been using them since then for managing several properties. They have done two or three evictions for me not entirely their fault in tenant screening as some of the tenants were inherited, and some of them had life changes - i.e. city code restrcition causing them to move, baby born, job lost etc..

This week, my pm lets me know that a new sublease tenant is suing me for bad business practice.

Lease ends 5/31/2014

Feb 4th 2014, new application is processed for subleasing; pm employee sends renew lease quote increasing rent by $50.

Feb 5th 2014, lease is signed with original lease detail.

Feb 10th 2014, pm employee takes back the renew lease quote, extend original lease date to July, and increased renew lease quote by $400.

Tenant refused, and mentioned to pm to honor the lease extension, indicating they won't move out by 5/30. Pm threatens to evict.

I had no idea all of the above happened until this week, and now pm is suggesting me to settle with the tenant. It feels fine to settle by paying tenant to move or giving them a discount by increasing the rent by $200. It's hard to tell if tenant will accept the offer or will continue to sue. It seems like no lease extension was signed hence I shouldn't need to honor the original extension, but I'm certainly afraid that attorney fees can be too much.

Any advice is welcome.

Thanks

Peter