Lease modifications after "interesting" mid-year inspection

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Lease modifications after "interesting" mid-year inspection

Brandon Harris
Rental Property Investor · Albany, OR · Member since 2016 · 39 posts · 23 votes

Hello,

I'm looking for some input on how to resolve issues I found during a rental inspection yesterday.

I performed an inspection of a house that has been rented for 6 months. Lease is 1 year term. The tenants are a woman, her 2 year old daughter, and her husband who travels for months at a time. They have 3 dogs and I charge a $25 pet rent for each dog, no pet deposit. General deposit is equal to rent. The house is in a B neighborhood.

The tenants have paid on-time, or even early, every month so far. During the inspection the house was clean on the inside and there was no damage. It looks like they are taking care of it well. 

Here are the issues and my proposed solutions I encountered:

-The tenant was not there for the scheduled inspection. She forgot about it. Instead, I met her 2 roommates who I did not know about and who are not on the lease. I am going to have them do background checks and add them to the lease if they want to continue living there. I don't mind more people living there, but they have to be on the lease. I also don't appreciate being lied to about who is going to live there.

-The backyard was full of dog poop. It was hard for me to walk through it because it seemed like there was more poop than ground. The backyard is all bark dust so there is no damage to landscaping. I am going to ask the tenant to pick it up within 2 weeks and keep it picked up.

-There were 2 smoke detectors removed. I replaced the 1 that I could find in the house and went to Home Depot and bought a replacement for the other. I am going to charge the tenant for the replacement. Per the lease I can charge them $250 for each smoke detector that is removed. I am not going to do that, but I am going to remind them of it and tell them I will charge them if it happens again.

-One of the new roommates has a cat. I am going to add the cat to the pet addendum and charge them an extra $25 of pet rent per month.

-There is a Christmas tree leaning up against the backside of the house. It is completely dried out. I am asking the tenant to dispose of it immediately since it is a fire hazard.

-There is some excess garbage near their garbage cans. I am asking them to clean it up.

-The tenant and one of the roommates had several pipes and bongs in their rooms. It smelled a little of weed. This is legal in my state, but my lease says that smoking is prohibited on the property and the tenant said she was fine with that. They aren't going to stop smoking weed so how should I approach this?

I am going to schedule a follow up inspection in 2 weeks to check on the problems and make sure the smoke detectors are still in place.

I'd love feedback about my solutions and any help you can provide with the weed smoking issue. If they resolve these issues then they are good tenants who pay rent on time and keep the house clean and undamaged. One of the roommates was very nice and cooperative. The other seemed nervous I was there, understandably.

Thanks in advance for your input!

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y

I would not go easy on them. Multiple violations and they are blatant. They are intelligent enough to know that they can't add anyone they want, they can't add animals, they need to clean up dog feces, their trash goes in the garbage can, etc. This is a perfect example of a renter that doesn't respect you or the rules. This is not a case of young renters that just don't know any better. Things will only get worse if you don't nip this in the bud.

I would give them a written list of violations and one week to fix them and pass an inspection. This includes removal of the roommates, removal of the cat, pay for the smoke detectors, clean up ALL the feces, dispose of the Christmas tree, get all garbage in the cans or off the property, clean the smoke odor/damages, etc. If they are not 100% at time of inspection, I'll have a 30-day Notice in my back pocket to hand them.

It is bad practice to catch a Tenant in so many violations and then try to correct them by adjusting your policies or the lease. That just shows them that your rules are arbitrary and can be changed any time they want.

I also recommend increasing your animal rent to at least $50 per animal and setting a limit of two. In my experience, risk goes up significantly when renters own multiple animals. You may even consider $50 for a small animal, $100 for anything over 50 pounds just to scare off people with big dogs that are more likely to damage flooring, doors, blinds, yards, etc.

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    If you want my honest opinion, you're being way too nice. These people have insulted you, your intelligence, and your property. I would be pissed. And they would be gone for violating terms of the lease.

    There are more people looking for rentals out there than there are places to rent. You might lose a month's rent, but that would be worth it to get a new and good tenant in there.

    If they are treating you like this now, they will only get worse....

    3Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    3y

    I would charge them for replacement of the one smoke detector and slightly more than it cost. Why?  Because heaven forbid there is a fire, if they have taken down the smoke detectors you may have problems with your insurance.  Placement of the smoke detectors is important. Do not put them in the kitchen, put them at the end of the hall leading to the bedrooms.  In the kitchen, they will always be going off if you burn something in the oven and tenants are more likely to take them down.

    Also charge her for background checks on the roommates.

    Remind them there is no smoking of any kind in the house, they need to smoke outside.

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y
    Quote from @Theresa Harris:

    Placement of the smoke detectors is important. Do not put them in the kitchen, put them at the end of the hall leading to the bedrooms.

    There is one required in each hallway, and in each bedroom. And at least one on each floor.

    And don't forget the CO detectors...one on each floor (unless it is an all-electric home with no attached garage)

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    @Theresa Harris I am curious....you are one of the voices of reason on here, and yet you don't seem to mind that they rented (sub-let) to other people without asking the landlord? Not just one, but two people....and with pets? That would be a deal-breaker for me, am I over-reacting?

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    3y
    Quote from @Bruce Woodruff:

    @Theresa Harris I am curious....you are one of the voices of reason on here, and yet you don't seem to mind that they rented (sub-let) to other people without asking the landlord? Not just one, but two people....and with pets? That would be a deal-breaker for me, am I over-reacting?


    It would annoy me as well, but if they are already living there it may be easier to run the background checks and screen them then having to deal with a potential eviction.  Not sure why, but the smoke detectors being taken down is more of a concern to me.  When it comes time to renew their lease, I wouldn't do a renewal though given all of the stuff that has happened.

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  • Brandon Harris
    OP
    Rental Property Investor · Albany, OR · Member since 2016 · 39 posts · 23 votes
    3y

    @Bruce Woodruff

    I am probably being too nice, I'm not taking it personally though. I'm giving them the benefit of the doubt because they seem inexperienced and are just starting out in their careers. I want to avoid the hassle of evicting, but also put contingencies into place to protect myself. If the house wasn't so clean and the rent didn't come in on time every month then I would definitely see this in a different light. You are right though, if they don't follow the rules now, they might not later. I'm thinking that increasing deposits might be a good remedy to protect me and incentivize them to follow the rules.

    1Reply
  • Brandon Harris
    OP
    Rental Property Investor · Albany, OR · Member since 2016 · 39 posts · 23 votes
    3y
    Quote from @Theresa Harris:
    Quote from @Bruce Woodruff:

    @Theresa Harris I am curious....you are one of the voices of reason on here, and yet you don't seem to mind that they rented (sub-let) to other people without asking the landlord? Not just one, but two people....and with pets? That would be a deal-breaker for me, am I over-reacting?


    It would annoy me as well, but if they are already living there it may be easier to run the background checks and screen them then having to deal with a potential eviction.  Not sure why, but the smoke detectors being taken down is more of a concern to me.  When it comes time to renew their lease, I wouldn't do a renewal though given all of the stuff that has happened.

    I agree, the smoke detectors are my big concern. Both of the roommates had very clean rooms and their bathroom was very clean. Other than not telling me they are living there they are good tenants. As long as their background checks come back fine then I don't mind adding them to the lease.

    Thanks for the notes on placement. Upstairs they are in every bedroom and the hallway. Downstairs is an open concept kitchen/dining/living room so I don't have as much leeway with where to put them. C/O detectors were still up and in the correct spots.


    I'm going to do another inspection in 2 weeks to make sure everything is fixed and the smoke detectors are still up. Then I'll do another one in 3 months before I have to give notice of rent increase or non-renewal (in Oregon the notice period for rent increase is 90 days). I think I'll make the decision on renewal at that point. If they are following all of the rules then I might consider renewal. I will likely increase the deposit and rent. 

    For smoking weed, I know they won't go outside to do it. They'll just keep doing it inside. I'll remind them of the rule, but I'll likely charge a smoke cleaning fee at move out.

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  • Courtney Nguyen
    Spring, TX · Member since 2017 · 138 posts · 44 votes
    3y

    @Brandon Harris I don't know about getting rid of the weed smell.  But getting rid of cigarette smell can cost thousands of dollars.  I dealt with one a few months ago (had to clean, replaced all blinds, painted the whole house.  Cost $5K).  Tenants paid early every month so I had my guard down, I didn't do the 6 months inspection!

    1Reply
  • Jon A.
    Asheville, NC · Member since 2017 · 385 posts · 274 votes
    3y

    I have to agree with @Bruce Woodruff on this one. The cat and unauthorized roommates are a huge red flag to me. These people do not respect the contract that is in place at all. All that they had to do was ask and you could have said yes or no and handled it accordingly at that time. They are taking advantage of your good nature and will continue to do so. If the unauthorized roomate or unauthorized pet does damage who do you think will pay for it? The one lease holder is going to start pointing fingers at people who don't even belong in the house and are not on the lease. You basically have squatters with rights at this point in time until you get them on the lease. You also need to have them jointly and severally liable for each other. If I were in your shoes and you want to keep these tenants than I would issue a cure or quit notice along with a new lease if they plan on staying.

    2Reply
  • Brandon Harris
    OP
    Rental Property Investor · Albany, OR · Member since 2016 · 39 posts · 23 votes
    3y

    @Courtney Nguyen Thanks for the input Courtney. Thankfully it wasn't cigarettes. That would be a big no-go. I'll call my usual cleaning company and see what the typical cost is for weed mitigation. 

    0Reply
  • Nathan Brown
    Property Manager · Phoenix, AZ · Member since 2023 · 101 posts · 77 votes
    3y

    You're giving the tenants something they aren't entitled to, "the benefit of doubt." You're dealing with grown ups who signed a contract. Enforcing it to the letter is not "taking it personal", it's just the course of business. If I were you, I'd put your grievances in writing in the form of a "cure notice" or whatever you call it in your state. In this way, you communicate to the resident there will be no bending of rules. Plus it gives you way more options if they continue to disregard the terms of the rent agreement. 

    1Reply
  • Brandon Harris
    OP
    Rental Property Investor · Albany, OR · Member since 2016 · 39 posts · 23 votes
    3y

    @Jon A. I agree. I plan to issue a cure or quit notice immediately. If we don't resolve the issues immediately then we will move forward with a notice to vacate.

    2Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y
    Quote from @Jon A.:

    I have to agree with @Bruce Woodruff on this one. The cat and unauthorized roommates are a huge red flag to me. These people do not respect the contract that is in place at all. All that they had to do was ask and you could have said yes or no and handled it accordingly at that time. They are taking advantage of your good nature and will continue to do so. If the unauthorized roomate or unauthorized pet does damage who do you think will pay for it? The one lease holder is going to start pointing fingers at people who don't even belong in the house and are not on the lease. You basically have squatters with rights at this point in time until you get them on the lease. You also need to have them jointly and severally liable for each other. If I were in your shoes and you want to keep these tenants than I would issue a cure or quit notice along with a new lease if they plan on staying.


     This ^^^^

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y
    Quote from @Brandon Harris:
    Don't do this. If smoking is against your lease rules, then stick by them. Your next tenant might have allergies. Smoke of any sort is incredibly hard to completely remove. You need to tell them that if you ever find that they have smoked anything inside, they are going to be immediately evicted.

    You're being a push-over here. Not a good character trait for a landlord. Maybe hire a PM, or sell and out your money into stocks?
    1Reply
  • Brandon Harris
    OP
    Rental Property Investor · Albany, OR · Member since 2016 · 39 posts · 23 votes
    3y

    @Nathan Brown That is my plan. I don't plan to look the other way, but I'm also not planning on letting them get away with breaking the lease. Everything has to be in order for them to continue living there. I'm also going to likely increase the deposit and charge a pet deposit now to add to my protection.

    By "taking it personal" I mean that I don't see it as an insult or wound to my pride. Giving them the "benefit of the doubt" is just assuming that they aren't being malicious. They made bad choices, but I don't think they trying to hurt me. The tenant barely knows me except for a couple interactions when the lease began. So I won't bring emotion into it in determining on what my actions are. It's a business relationship. If they break the contract, then they need to remedy or our business dealings are done.

    1Reply
  • Marci Stein
    Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes
    3y

    They are in violation of your lease several times over . I would ask them to remedy the lease, and if they don’t , start eviction. 
    unless it is a very difficult location to find good paying tenants, i would make them adhere to the lease on every account.

    1Reply
  • Marci Stein
    Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes
    3y

    They are in violation of your lease several times over . I would ask them to remedy the lease, and if they don’t , start eviction. 
    unless it is a very difficult location to find good paying tenants, i would make them adhere to the lease on every account.

    0Reply
  • Brandon Harris
    OP
    Rental Property Investor · Albany, OR · Member since 2016 · 39 posts · 23 votes
    3y
    Quote from @Bruce Woodruff:
    Quote from @Brandon Harris:
    Don't do this. If smoking is against your lease rules, then stick by them. Your next tenant might have allergies. Smoke of any sort is incredibly hard to completely remove. You need to tell them that if you ever find that they have smoked anything inside, they are going to be immediately evicted.

    You're being a push-over here. Not a good character trait for a landlord. Maybe hire a PM, or sell and out your money into stocks?
    You are right, I will be stricter about the weed smoking. 
    1Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    3y

    @Brandon Harris

    So not sure this is the best advice, but from what you describe of your approach and lack of desire to engage/terminate I would modify as follows:

    Charge for the smoke detectors as in your lease. Your plan as stands let’s them go completely without consequence. Not A good idea with a group like this.

    In future modify your lease so that evidence of smoking triggers the cost of a full cleaning and fumigation. It’s easy to use an entire security deposit on this and then some and you need some leverage for compliance. You can always back off of this if it’s helpful as a carrot. Honestly pot is a lot easier on apartments than cigarettes.

    Raise the rent at least 50 and I would suggest 100 for each person if they pass your screening.Personally I might use this to get them to sign a new month to month agreement incorporating the above or let them know it’s this or nothing. I mean, it’s $25 per cat for goodness sake. This may have the additional benefit of having your tenants kick the roommates out.

    Charge them for someone’s time to go over and pick up the garbage.

    Increase inspections to quarterly and let them know.

    1Reply
  • Brandon Harris
    OP
    Rental Property Investor · Albany, OR · Member since 2016 · 39 posts · 23 votes
    3y

    @Jonathan R McLaughlin Thanks for the feedback. I am going to charge for the smoke detector and my labor, so around $50. I'm just not going to charge the $500 tampering fee on top of that. They'll have some repercussions, but not the full blow. I can always change my mind depending on their response to the lease violations.

    Oregon is a very tenant friendly state and we have a 3 strike rule. With smoking and unauthorized pets, I can charge is $250 per occurrence AFTER the first warning. If I were to evict it would be because of the unauthorized residents. I couldn't evict because of the smoking or cat until they fail to meet specific deadlines or certain number of occurrences. There are a lot of different rules in place with different requirements...I'm no lawyer, but I'm guessing the full cleaning/fumigation clause wouldn't fly here.

    Same thing goes with the garbage and pet feces. First strike is no fee. 2nd strike is a $50 fee. 3rd strike is a $50 fee + 5% of rent. All 3 strikes have to occur in a 12-month period. I am giving them a week to remove both. Then they get a 2nd warning. At that point I'll definitely consider paying someone else to do it and then charging the tenant. Good idea.

    If they want the unauthorized people to stay, I am increasing the deposit $1,250 and charging an additional $500 pet deposit. I hesitate to increase rent mid-lease because of our rental laws. If I do renew their lease once the year is done, they will see a rent increase.

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    3y

    We are extreme.  Our tenants cannot be smokers (it is not a protected class).  They are smokers.  Done!  We had a fire from a smoker take out 2 of our units just before COVID.  Due to Covid, it too 12 months to get back in service.  We have purchased units with smokers.  You can spend a lot of money to get rid of the smoke smell.

    They have unauthorized pet.  We have units that allow dogs, but only up to two.  We charge pet rent and an additional deposit (we do not refer to it as pet deposit, it is an additional deposit to be used as needed).  We typically make tenant who has unauthorized pet choose between the pet and the unit and make clear they are breaking lease and will be charged for unit turn over and lost rent.  They get rid of the pet.

    I have handled the smoke detectors similar to you but question if my wife actually charged them for the replacements. I buy them in bulk so they are quite cheap but it is the point of it so I told tenant they would be charged $25 first time and $50 next time (but I suspect they typically not get charged).

    To be frank, most tenants are not going to be as tidy as I wish.  The dead tree and clutter at the trashcans I would let them address.  But with the other issues, they would be history as our tenants.  

    Here is the problem with be as light on them as you proposed, they will continue to break the rules.  Why wouldn't they?  They suffered no consequences for the rules they broke.  They would be severed to vacate if they were our tenants.

    Good luck

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y

    I would not go easy on them. Multiple violations and they are blatant. They are intelligent enough to know that they can't add anyone they want, they can't add animals, they need to clean up dog feces, their trash goes in the garbage can, etc. This is a perfect example of a renter that doesn't respect you or the rules. This is not a case of young renters that just don't know any better. Things will only get worse if you don't nip this in the bud.

    I would give them a written list of violations and one week to fix them and pass an inspection. This includes removal of the roommates, removal of the cat, pay for the smoke detectors, clean up ALL the feces, dispose of the Christmas tree, get all garbage in the cans or off the property, clean the smoke odor/damages, etc. If they are not 100% at time of inspection, I'll have a 30-day Notice in my back pocket to hand them.

    It is bad practice to catch a Tenant in so many violations and then try to correct them by adjusting your policies or the lease. That just shows them that your rules are arbitrary and can be changed any time they want.

    I also recommend increasing your animal rent to at least $50 per animal and setting a limit of two. In my experience, risk goes up significantly when renters own multiple animals. You may even consider $50 for a small animal, $100 for anything over 50 pounds just to scare off people with big dogs that are more likely to damage flooring, doors, blinds, yards, etc.

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    @Dan H. and @Nathan Gesner nailed it as usual. It's what we've been saying. These tenants took huge advantage of you and will do it again and again if you don't take strong and decisive action...

    2Reply
  • Tyler Bushey
    Investor · Biddeford, ME · Member since 2017 · 282 posts · 180 votes
    3y
    Quote from @Bruce Woodruff:

    If you want my honest opinion, you're being way too nice. These people have insulted you, your intelligence, and your property. I would be pissed. And they would be gone for violating terms of the lease.

    There are more people looking for rentals out there than there are places to rent. You might lose a month's rent, but that would be worth it to get a new and good tenant in there.

    If they are treating you like this now, they will only get worse....


     I agree with you 100%.  

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