All Forum Posts by: Joe Semifero

@Hilary Hageman - We had couple of similar situations recently where we inherited tenants. In these cases, we have written a letter with all the info regarding ourselves and dropped off at the home, including how to contact us for repairs, etc., and in the case of a month-to-month existing tenant, we give them a new lease with our requirements, etc. We have also asked for an application with the info we need on a tenant to be completed. On Michigan law, if they are on a month, if they are on a month to month, you need to give them 30 days notice for changes in lease or rent. You may also want to inquire as to what their plans are as far as staying in the home, how long, if they want to sign a lease, etc.

On the repairs, we also wait until a vacancy for anything other than the mandatory items and things like leaks. If the tenant appears to be a good one based on past payment record and application (good tenants are hard to find), you could suggest to them that they could move to the vacant unit once it is renovated. In that way, they would see some value for the additional rent, and it would give you a chance to get into the currently occupied unit to update and rent at a higher rent.

Joe

Thanks for the invite - I am planning on being there!

My son rented a property with friends in Ypsilanti one year. I was pretty surprised at how one sided the leases were and the requirements for co-signers, deposits, cleaning requirements, etc. If you do a Google search for Ypsilanti rentals or drive around and get the name of some management companies off of the signs on houses, many of them have leases on their sites. That will give you a good idea of some of the things you might want to do from a lease perspective. I wouldn't take them as they are (you should have an attorney go over or even write a lease for you) but they are a good starting point. 

Example: http://www.keysmanagement.net/residential-lease-ag...

Search: https://www.google.com/webhp?sourceid=chrome-insta...

Joe

We had something similar recently. We had the seller complete the eviction after the sale. Sounds like this may or may not be an option for you. We also set up an escrow for repairs and did a walk through to check the status of the home before closing and again once the eviction was completed. If the seller can finish the eviction, you could offer the following: 

1) Require some amount be placed in escrow for potential damages, a large number to ensure it will cover most damages, maybe $2000-$3000. (can be taken from closing funds)

2) Do a walk through the home immediately before closing to ensure there are no obviously damaged items. 

3) Set up a possession date after the closing for once the eviction is completed, along with a daily fee to cover your costs, such as taxes and loan payments. This would be the same as when possession is set up for some time post-closing on a regular house. Generally the full amount has to be set aside - set it up for 90 days. This gives the seller incentive to get the process completed. (Again, can be taken from closing funds.)

4) Once the seller completes the eviction, walk through and inspect again, noting damages to be paid  from the escrow. 

That is basically how we handled it. Good luck with your closing and properties!

Joe

@Chad Harter - where are you seeing the $30K houses? Michigan has some great areas and some dicey areas. A lot of the articles on BP about lower price houses talk about the issues that go with them - things like higher turn over, costs for some things being the same as higher prices units, etc. Personally, I think there is good and bad in all levels. I have lower cost places and some fantastic tenants. I've also had some evictions and other issues. 

I think @Josh Kundrat is right and many people aren't close enough to manage properties well from long distance, especially those with the potential for additional problems. Given that, with the team I have now, I wouldn't be worried about long distance, but you do need boots on the ground for any long distance management, either partners or contractors.

@Joshua Kapp - I think @Thomas S. is wondering or guessing. I don't think Michigan is particularly tenant or landlord friendly, although I have heard some municipalities or judges can be more supportive of tenants than others. I think that is true is a lot of places. 

Why would you wait five days after the first of April? Is that when the rent is considered late? Many leases say the lease is late if not paid on the date it is due, but there is a grace period for a late fee. As soon as the rent is late even one day from the day it is due, you can send a 7 day letter. I think you have to consider the notice received by the tenant the next day. Be sure to get a  proof of mailing from the post office. They mark it with a date stamp to show you mailed the notice and it costs about $1.30 or so. I also remember there being something about NOT sending by certified mail. After the 7 days (assuming you mail on the 2nd, considered delivered on 3rd, so as of the 10th) you should be able to file for the eviction. For April it would probably be the 11th since the 10th is a Sunday.

I like Jeff's idea about applying the rent to the sewer bill, although I am not sure it would be OK to apply retroactively. For instance, if they paid March's rent and the sewer bill came due March 10th, I think you'd have to wait until the April rent to deduct the payment. At the time the rent was received it was applied to the rent. Is there a requirement for how soon the sewer bill has to be paid? I do think you could pay the sewer bill so it isn't late, but you would also probably need to notify the tenant that you did so and that they would need to pay you for the bill. At least then you could include that amount in the amount owed for the eviction, and potentially in a money judgment if you think you might be able to collect. 

Good luck!!

Joe

Yes, it's legal in Michigan. I didn't make this part of my lease up - it was included in a standard Century 21 lease our RE agent used for our first few rentals. We also had our lawyer review the lease and ok it. 

The "rent payments" are not rent payments, they are payments for all amounts owed. The lease simply says the priority for payment of items, and rent comes last.  

Most leases have a clause that states that there are other items that get paid first prior to rent when there are other items owing, such as utilities, legal fees, late fees, etc. I would also say that it is not a "Michigan" requirement for utilities to be in the owner's name, but municipalities often put this policy or ordinance in place as it can be very difficult to collect from a tenant.

At first I thought you should have the bill sent to you, but it sounds like you do want him to pay it and not have to bill him for it. Can the municipality send you the bill if it is not paid? How did you find out about the unpaid bill previously?

I think the only option you have is to pay the bill, send notice of the water bill and request it be included in the rent payment, and then send a 7 day notice to pay to the tenant the next time they pay the rent if the additional payment is not included, because the payment would first be allocated to the water bill (per the lease) and then to rent, so the rent would not be paid in full.  Then obviously you would have to file with the court after 7 days, etc., if the payment didn't happen. 

Based on the record the past 12 months, it sounds like it may not be a concern. Hopefully you are getting a good rent from this tenant for the extra work and hassle. If you weren't particularly fond of the tenant and thought they could be replaced, I would increase the rent the next time the lease was up to make it "worth your while." Also, I would proceed quickly with the eviction if the water bill is not paid and you have to file. If he stops paying the water again it may be an early sign of other problems. 

Good luck!!!

@Carson M.@Chad MilesMake sure to thoroughly investigate whoever you choose for a property manager. You may want to Google Mr. Beal and some of the articles about him in Ypsilanti.