All Forum Posts by: Steven Woon

If you have multiple rental units, it is best you treat all your tenants equally.  If you allow one tenant, and not others, to break lease agreement without penalty or reduced rent for no other reason other than "the tenant requests it", it may be construe as a discriminatory move by the others.

And no, I will not consider lowering rent or modifying the current lease terms.  If the lease term has expired and the rent rate in that area has dropped, or your property has more wear and tear which you do not care to fix (and tenant does not mind), then by all means, modify the lease agreement with a reduced rent.

Thanks for the clarification.

In Texas, "Notice to Vacate" goes out on the 2nd day rent is not paid. Eviction filed with the county on the 4th and court hearing within 10-21 days after. In all, a deliquent tenant will be out within 30 days. Any short fall in court fees, rent or damages that exceeds the security deposit may be claimed through Small Claims court (another relatively simple process) but collecting will be difficult since we cannot garnish salary here, unlike in most Canadian provinces.

Being there, done that.

I used to live in Ontario, Canada which is extremely tenant friendly. Rented a house and after two-plus years, my landlord sold the house. 

Prior to selling, he gave us a 60 day notice to vacate AND at the same time, file for a hearing (not eviction) with the Landlord and Tenant Board (LTB). I believe this was a very prudent move. If he did not do so, there would be nothing preventing me from filing an appeal with the LTB on the 59th day to challenge the reason for him asking me to move. Since Ontario has rent control on most rental properties, getting me to vacate would be a very long-drawn and costly process. Fortunately for me, I was already thinking of moving back to Texas before that happened.

I am not sure about the rules in Alberta, but knowing that the province is now led by a Socialist party, I would assume it would be as tenant-friendly as in Ontario. So, I strongly recommend that you follow the normal procedure to start evicting your tenant as soon as allowed if you do not received rent as agreed.  I would not take his word that he will be gone by end of the month. There is no certainty that he will move out after the "verbally" agreed date, esp. if he cannot secure his "other" property.  He will probably not bother to pay his rent for the extended stay.

Sorry repeated post

I drive my 10-year old beaten up minivan whenever I go to my rental units for repair or to meet my tenants.

My wife complains that our dishwasher is in worst condition than those dishwashers in any of my rentals.

When meeting with my bankers, I make it a point to drive my wife's nicely kept newer Camry. Need to give my bankers impression that I am successful and a big spender.

Once, I had a meeting with a potential contractor.  He came to the meeting driving a well-kept, expensive model Mercedes.  Our meeting ended as soon as it got started.  My best contractors today drive beaten up trucks or vans loaded with tools that they use in their trade.

It depends on what is listed in the lease agreement and what is allowed in state law.   In my opinion, there should always be penalty for terminating (breaking) a lease prematurely, i.e. moving out before the lease term ends without mutual agreement.

In the standard Texas (TREC) lease agreement, we are allowed to specify a percentage of rent, or a fixed dollar amount as fee (penalty?) even if a new tenant is found to replace the previous tenant.  Don't forget, there are cost to find a new tenant and this cost are amortized into the montly rent the tenants are paying.  So, the landlord should be able to recover this cost.

As for me, I state in my all my lease agreements that if the tenant finds a replacement, I will charge him/her 1/2 month rent as fee (penalty).  If I am the one who finds the new replacement, I will charge the previous tenant 1 month rent.  You may call this "double-dipping" but I have to cover my cost, time and effort to handle this extra work just so to allow the previous tenant to terminate the lease prematurely.

Exception of course (as stated by state law) is, if the one of the list tenants is called for active military service, or if there is a court judgement on family violence amount any of the listed tenants, then the tenant(s) can terminate the lease prematurely without any fee or penalty.

High credit utilization ratio negatively affects your credit score.  For example, if you have only one credit card with a limit of $6000, and you have spent $3000 on that credit card (which you will pay in full by due date, I hope), then your credit utilization ratio is 50%. 

Some time ago, I used to have a credit utilization of more than 35% and this lowers my credit score in a big way, although I did not have any other loans and pay all bills on time.

If you have a higher credit limit, e.g. by adding another credit card, then your credit utilization will be lower.  For example, your other credit card has a limit of $6000.  Then your credit utilization ratio drops to 25%.  On the other hand, too many credit cards may lower your score due to your increased risk profile.

Other than credit card, you may want to consider getting an unsecured line of credit (LOC), which will effectively increase your credit limit and thus reducing your credit utilization ratio, assuming you do not use your LOC except only for emergencies. Ironically, if you qualify for a LOC, you should not have any problem qualifying for a mortage loan.

When I first moved to the US a few years ago, I approached Advancial Federal Credit Union to inquire about getting a mortgage to purchase my 1st residential property. The good news was, they do give mortgage loans to legal immigrants without any credit history but at a higher rate and shorter term. The mortgage would have a provision to refinance at a lower rate after two years. In the end, I decided to buy my residential property with cash, and open three credit cards and one checking account to establish my credit history.

So, if (big) banks refuse to give your parents mortgage due to no credit history, I suggest they contact a credit union.

Disclosure:   Not a tax or legal advice, but my own personal opinion on the subject matter.

The tenant I believe still has legal possession of the property until he declares he has moved out or if the court orders otherwise.  Be careful about driving by or checking on the property too often. The tenant may complain that you are stalking or harassing them as one of mine alleged.

It is quite puzzling why the eviction service took more than 10 days to file, when the process of filing is quite straightforward. Maybe your lease agreement allows for a long notice (to vacate) period which is the 1st step to eviction.

As for asking for monetary award, it depends on how likely you can collect any judgement from the tenant.  Texas is also a debtor friendly state and we cannot garnish wages.  The tenant's credit profile or eligibility to rent is already ruined anyway, so he/she is unlikely to bother paying you volunarily.  The only thing you can legally do is to file a lien on the property he owns, which is likely to be minimal.

I suggest just focus on getting the property back as soon as possible.  In my recent case, I did not pursue any shortfall in rent, even though it was vacant for quite a while after eviction due to December holiday season.  If I claim (through Small Claims Court) for monetary award as allowed in the lease agreement, and win, IRS will want a portion of my monetary compensation, whether I can collect or not. It may be years before I can file this uncollectable amount as bad debt (loss).

If you win in a judgement, and the judge award you monetary compensation, I think you need to obtain an abstract of judgement in order to file any lien or engage a collections company to collect the judgement.

Again, I am just sharing my own experience and opinion, not legal/tax advice in any way.

I have done evictions in Texas before and find that the process if relatively simple.  My policy is, once I filed an eviction, any further communications will be in front of the judge.

If the tenant wants to settle out of court, he/she can do so only by moving out before the court date and send me a written notice that he/she has moved out.  Only when I find the property was left in good condition will I withdraw the eviction case.

I would never offer cash for keys after eviction has being filed.  Also, I suggest avoiding contact with the tenant prior to court date, because anything you say may be used against you.  Anything that you promise may be construe as oral agreement which are legally enforceable.  And any oral agreement can be misquoted and interpreted in an infinite number of ways.