Would you evict these tenants?

[meena]

Thank you for all who shared your wisdom and experience here! I'm deleting now for the sake of privacy.

 

[FriedClams]

I might start with a new property manager. Looks like mismanagement is as much, or more of an issue than the tenants.

[happypamama]

Can you find out if there is something major going on that is making it hard for them to pay in a timely manner -- someone I'll, someone out of work, etc. It sounds like they are trying, but maybe they are just really honestly having trouble making ends meet. Groceries and utilities would come first in my book, if I had to choose between food/water/electricity and rent/mortgage, and I know I would be awfully grateful for an understanding landlord. I can't help but think that if you are able to be gentle with them, if they're really having a hard time, it will come back to you eventually.

[meena]

I agree regarding the property manager. We've already decided that once this lease is over we'll be getting someone else to take over. I'm not sure if it will help to replace him before then.

[LucyStoner]

What is your late payment policy?  When the rent is late, they should immediately get a notice to pay or vacate and it should have a late payment charge added which is the max allowed by law in your area.  It sounds like you have a property manager who has made it too easy for them to let it slip.  Honestly, I wouldn't hire a friend as a property manager.  If you charged a late fee, that would be a disincentive to keep pushing it.  

 

 

[meena]

We do know a little of their situation. The husband is in sales, the wife is a SAHM, they have one young child, and now another on the way. We do feel empathy for them, as we had similar hardships when our children were young. Rather than stiffing on the rent, though, I got a part time job at the Y where I could bring my children with me (I even worked there while I was pregnant). I also did at-home work and part-time gigs, and this is all while my husband was working out of state about 50% of the time. That said, I really feel for them. We have to be careful, though, because we are sometimes nice to the point of getting taken advantage of.

[Word Nerd]

I can't help but think that if you are able to be gentle with them, if they're really having a hard time, it will come back to you eventually.

 

Hasn't she already been doing that? 

[meena]

Late payment policy per our lease is 10% after the 5th of the month, in default if not paid by the 10th. Also per the lease, we should have charged them 10% for each NSF check. 

 

I totally agree about involving a friend in business. It was kind of a compromise I made for DH, who originally wanted to manage the property himself. 

[Jean in Newcastle]

Start managing the property yourself.  Let them know that you are now managing and that you will be charging a late fee from now on and that without that you will be starting the eviction process.  We've had numerous rentals and we've found that once this problem becomes chronic it tends to get worse and worse.  

[Lisbeth]

I would evict. Being a bit late is one thing, but the water bill thing is theft. I would be unhappy having to do so, though. :(

[Anne in CA]

I agree that the water bill issue was deliberate outright theft. I would evict over this alone. 

[Plink]

This is really more of a management issue than a tennant issue. He has been giving them permission to pay late and pay less. He is the one who wasn't on top of the utilities switch. He is the problem, not your tennants.

 

Switch managers sooner rather than later. Your issues sound as if they could be easily solved being more organized on that end.

[milovany]

For future reference, we offer "discount rent."  The rent is officially, say, $850/month, but if they pay by the last day of the month before the rent is due (so, Jan. 31 by 6pm for February rent), they get a $50 discount.   I had a landlord who did this when I was younger, and I remembered it when we turned one of our houses into a rental.  It seems to work really well because 99.5% of the time we get the rent before the 1st. Everything is written into the lease so they know what it means and that it will be enforced. 

 

I agree that just as much of the issue seems to be with the property manager. 

[meena]

Thank you all for your advice! I agree that new management is a must. This has gone on for far too long.

[gardenmom5]

missed the part about the property manager.  start there, with someone who will be more professional and not rely upon friendship.  then deal with the tenants.

[AmyontheFarm]

I know the manager is a friend.  But, there have been cases where the manager was skimming and saying the people hadn't paid on time.  I would just confirm with the family that they and you are both aware that the didn't pay properly.

[Cera]

I would start by firing the property manager.  He isn't properly doing his job (he is supposed to work for you and protect your interests).  

 

Next I would sit down and figure out exactly what they owe you.  The NSF fees, the late payment fees, the water bill, etc.  Send them a detailed letter itemizing the charges and give them a date to pay by (I would probably give 6 weeks since it is Christmas...Jan 31).  

 

Finally I would let them know that you have made a change regarding the management of the property and will no longer be allowing things to slide.  The next time they are late with the rent, or if they do not pay the back payments they owe by the 31st of Jan. send them an eviction notice.  

 

If they are adding another child their money issues will only get worse.  It isn't your family's responsibility to take care of them.

[Jennifer in MI]

I don't know if you can change things, but we have a neighbor who owns a number of rentals.  He personally goes to each one and collects the rent weekly.  He says that because the amount is much smaller than paying once a month, he is more likely to get his money.

 

Good luck.  I don't know what i'd do.

[elegantlion]

I would give them a written warning, discuss the management changes, and print off your legal rights for eviction. I would also have a conversation with whoever is signing the checks. It could be they are simply poor money managers, it could be they simply don't give a crap about being responsible. It could one of them handling it poorly, it could be both of them. 

 

You're right, it is not up to you to save them. However, I think a precedent has been set accepting their behavior and a new boundary needs to be set before you move to evict. Don't be afraid to follow through if they don't keep up their end. Some people like them only learn the hard way. 

[jenamiles]

It sounds like we had/have the same tenant.  When we were transferred we were unable to sell our house in TX so we rented it out for a one year lease.  The renters NEVER paid the rent on time and it got later and later as time went on to the point where they were almost 2 months behind at one point.  Our property manager did nothing to help us get caught up or get them out.  (On the plus side, we never had to pay our property manager his 10 percent because he didn't do his job.  He just got the commission when he sold it.)  We researched the process for evicting in our state/county and found that it was a lot of work on our end and gave the tenants plenty of ways to keep from being evicted while they had plenty of time to totally trash the house if desired.  Over the course of the lease, we waived all late fees and allowed them to pay in increments as long as they settled up by the end of the lease.  We also gave them the option of early termination without any kind of fee or penalty allowing them to find a cheaper place in town.  The family had not necessarily fallen on hard times, but was horrible at prioritizing where there money went.  For example, they didn't pay December rent until the middle of January.  It turns out that a horse for the daughter showed up in our back pasture in December instead of paying rent. 

 

For us, the decision to evict came down to - are they taking good care of the house, would we be able to find another tenant, and would we eventually see the money owed us.  In our case, it took them four months to find a cheaper place they could afford while we worked with them to get payments caught up, but they left the house immaculate and we were able to put it back on the market to sell it without having to pay anything to "fix damage".  We also had the income to float the money we didn't get in payments so it wasn't a huge financial strain on us.  If it had made our lives difficult, we would have evicted in a heartbeat.

[gardenmom5]

I know the manager is a friend.  But, there have been cases where the manager was skimming and saying the people hadn't paid on time.  I would just confirm with the family that they and you are both aware that the didn't pay properly.

 

there should be a paper trail. I would not accept anyone's "word" on anything.  people should always have a paper trail, as it protects both parties.

 

what was deposited in what bank account and on what date. (for those 'short payments', do the renters still have the cleared checks?  that will tell you if they paid the full amount or less.)  the bank can also tell you exactly how long it takes a check from the renter's bank to their bank to clear.  the bank will have records.  if the property manager was skimming, were the renter's checks cashed elsewhere?  if they paid cash - the renters should have a receipt stating how much they paid on what date. (they'd be foolish if they didn't demand one, and you're property manager would be remiss if he didn't have them for his own records.)  the property manager *should* have those things - if he's skimming (not saying he is) he'll likely be cooking books to cover it. 

 

start with getting rid of your property manager, and have someone who knows what they are doing go over the records, including the lease agreement the renters signed.  it could be money very well spent.  that will tell you exactly what is going on with the renters.   how many times they paid late, number of bounced checks, short of rent, etc.  then you can hire a new property manager.  

[brehon]

Agreeing with everyone else. First step is to fire your property manager as he is not fulfilling his contractual duties. Second step is to gather ALL the relevant data regarding payments, deposits, NSF checks, *all* fees, etc. Go from there.

[songsparrow]

Just a note about the water bill.  We never let our tenants put their name on the water bill, because if they fail to pay it we could end up with a lien on our house without realizing it.  We receive and pay the water bill, then let the tenants know the amount and it is due with their next rent check.  Our lease lays this all out and states that the water bill is "additional rent."

[brehon]

Dp

[meena]

I appreciate all the comments on how to proceed. DH and I discussed our next steps this morning. First, we are making an appointment with a management company to discuss whats going and hopefully hire a new manager quickly. I agree wholeheartedly with the recommendation to send a letter notifying our tenants that management has changed and going forward the lease will be strictly enforced.

 

Just to clarify, we receive the checks/money orders as written by the tenant. They just get mailed to our property manager and then he gives them to us. He is definitely not skimming. However, he is allowing the tenants to control the timeline rather than working to enforce our lease. Today I printed copies of the payments received from our tenants in the last twelve months--it is ridiculous. Every single one was dated past the 1st, 11 out of 12 were dated past the 5th (the late fee date), and a majority were dated after the 10th (the default date). They potentially owe us almost two months rent in fees.

 

 

[meena]

I'm afraid to keep the water in my name and make it a part of the rent, for the exact reason of what happened in this case. The tenants ran up the bill and didn't pay it. I'm pretty sure it's illegal here for a landlord to turn off a utility on tenants, so they can keep running it up until they are evicted which can be a long time. Now that it's in their name (and affects their credit), if they decide to run up the bill it's all on them and I'm not responsible. I will have to check if a lien can be put on our property if they default on a utility held in their names.

[saraha]

I would do anything I could to keep from having to evict them.  My FIL decided to evict a tenant, and it was a NIGHTMARE.  They never got their money, and probably never will, plus the lady trashed the house, and had to be escorted out by the sherriff.  I would send a letter stating the changes in management, how the lease is going to be strictly enforced, then give them an option out.  During the eviction, this lady lived in my FIL house after court proceedings started for 3 months while trashing it and not paying a dime, including all of the back rent.  THe court told him he had to give her a chance to catch up- 30 days, then they had another court date to which she didn't show up-30 days, then the official notice, which gave her 30 days to relocate.  The court was definitely not in the landlords favor on this one.

[Mom2TheTeam]

I agree with everyone else.  The tenant is getting away with this because of the property manager. 

 

We have a couple of rentals.  We manage them ourselves.  We've been doing this over 10 years now.  We have learned you have to be strict about the rent money.  You have to enforce late fees.  You have to send eviction notices.  If you don't take it seriously, they won't either.  At this point, you need to tighten up and let them know that, but plan for them not to take it seriously and for you to end up sending an eviction notice and even evicting. 

 

As for the water, that would have made me evict them right then if they didn't pay everything they owed on that including the $300 deposit they used...that was your money, not theirs.  However, that said, I've never waited for or relied on my tenants to turn the utilities over into their name.  When we sign the lease, I hand them a piece of paper with all the names and numbers of the utility companies, including a list of cable/phone that they can use if they want to (those are optional and they can find other services or not get them at all if they want...water, electric and gas is not).  I tell them and it's stated on that paper that the utilities are their responsibility (it is also in their lease) and that I will be calling to have my account disconnected as of the move-in date.  They need to call and have it put in theirs.  I have them sign a copy of that so I have a record of telling them and give them one to keep and use.  Then, just like I said I would, I call all the utilities and have them disconnect my account.  If the tenant doesn't call, they will have the electricity, water and gas turned off.  They cannot just keep it in my name without my knowledge. 

 

You, as the owner, need to be more proactive and not let these things slide.  If your property manager isn't taking care of it, you need to.  This is costing you money.

 

This may sound heartless, but I've also learned that their situation/story hardly matters.  This is a business.  It isn't charity.  They need a couple extra days?  Fine, but charge them the late fee.  They can't pay?  Fine, evict.  They may or may not be struggling.  They may or may not even be telling you the truth with whatever the story is...we've heard it all and I do mean that.  We've even had 2 people tell us someone died.  One told us the husband died and she couldn't pay.  The other's grown daughter (who never lived there at all) called and told us the husband died and the rest of the family moved.  Neither died.  One (the latter) was actually arrested.  They used my next door neighbor's house to stake-out our tenant!! Crazy.  Anyway, it's really great if you have the money to take care of another family.  Personally, my husband works hard to take care of our family.  He does not work to take care of another family's housing needs also.  People have to pay their rent and all money they owe us.  That is not my husband's responsibility.  It took me a while to really mean that.  I had to realize that when my husband goes to work everyday, he is doing it for our family, not so another family can live in a house we own, as a business, rent free.  We are not a charity organization.  No matter the reason, if the tenant can't pay the rent, they have to leave.  Your tenants are paying rent, but it's probably only going to get worse.  Just remember, this is a business and you have been more than generous already. 

 

Believe me, we are easy landlords.  We do not bother our tenants and aren't nit-picky at all.  But, we are strict about the rent because we have learned over the years that if you give an inch, they will take a mile...then 2 miles...then 3.....

 

Good luck!

 

 

Just a note about the water bill.  We never let our tenants put their name on the water bill, because if they fail to pay it we could end up with a lien on our house without realizing it.  We receive and pay the water bill, then let the tenants know the amount and it is due with their next rent check.  Our lease lays this all out and states that the water bill is "additional rent."

 

I have asked all of our utilities this question. In fact, I just double checked this with our town (who handles both water and electric) on Monday because we have tenants moving out and I needed to put everything back into my name.  It is not on us if they don't pay and they will not put a lien on our house.  Have you asked your utility companies about that? 

 

In my town, if they move within the county, they actually can't get water or electric anywhere else unless they are fully paid up on the account for our rental.  They will not let them get a new account without the old one being paid in full.  Either way though, it does not affect us...it affects them and their credit only. 

 

Unless you like doing it that way and handling it, I would call and make sure they can actually put a lien on your property.  Ours can't do it.

[songsparrow]

I have asked all of our utilities this question. In fact, I just double checked this with our town (who handles both water and electric) on Monday because we have tenants moving out and I needed to put everything back into my name.  It is not on us if they don't pay and they will not put a lien on our house.  Have you asked your utility companies about that? 

 

Yep, our town handles water and sewer billing, and a failure to pay results in a lien being put on the house.  I pay the bills and inform the tenant of the charges.  That way I know that the town has been paid.  If the tenants were to not pay me for a water or sewer bill, it would be the same as if they had failed to pay rent and late fees would accrue and we would bring an eviction proceeding if necessary.  

[Mom2TheTeam]

Yep, our town handles water and sewer billing, and a failure to pay results in a lien being put on the house.  I pay the bills and inform the tenant of the charges.  That way I know that the town has been paid.  If the tenants were to not pay me for a water or sewer bill, it would be the same as if they had failed to pay rent and late fees would accrue and we would bring an eviction proceeding if necessary.  

 

That totally stinks!  It so interesting how different states and towns can be.  I'm thinking it must be state by state because we have owned rentals in 3 or 4 different counties all in the same state and none of them can put a lien on the house for a tenants failure to pay the utilities bill.  Sorry yours does.  :(

 

ETA - That must be why so many landlords include some or all utilities in the rent.  I always wondered why they did that.  It is rarely included around here. It would be a good reason to include it.

[sassenach]

If you keep track of their outstanding fees, can you take it out of the deposit?  

 

I think sitting down face to face with people is underused and underrated.  When you make the management changes, I would schedule a meeting with the tenants.  During that meeting, I would go over the changes, and also give them a spreadsheet overview of their outstanding fees.  Just the fact that they are so far removed from interacting with you can desensitize them to their breeches in contract.  I would let them know that you appreciate that they are caring for the property well, but these things are not just getting swept under the rug, and they'll have to get their account right with you one way or another.

 

It might be sobering for them to see everything all at once.  Hopefully, it will also inspire some appreciation for your patience, and resolve to do better.

[LMA]

Honestly, get rid of the manager now. He is part of your problem. He will make the mess even larger than it is. Is there any way you can manage it directly?

 

You need to sit down and make a list of everything they owe you and everything that you owe to other debtors, such as the town lien. You are ruining your own credit by letting the manager and the tenants decide when and how to pay you. You need to be in charge. If they can't work with you and pay up immediately, you need to evict them. Evictions can be drawn out and you risk damage to your own property while they are still living there, so that is not an easy thing.

[meena]

Heather, you are right; we should have been more proactive. This is our first time renting to non-family, so we went with a manager assuming that he would responsibly take care of all these issues. Since we eventually get the rent, we've let the problems slide each month. I really don't want to go through the eviction process if at all possible, so that has also influenced my judgment.

 

At this point I don't think managing directly is a good option for us. As you can probably tell, we can be pushovers.  :blush: Eventually, I think we could do it but we need help for now.

[Bootsie]

 

*Today's rent was short. Our property manager told my DH it was less the amount we usually pay him, and the tenants will just pay him directly. Well, it wasn't enough to cover our payment to him (about $10 short), plus I like to write him a check for the paper trail for our taxes. The property manager did this without our permission.

 

This would raise red flags with me.  What are you paying the property manager to do?  

[El...]

I don't know if you would be able to evict at this point.  I suspect that the contract you have with these tenants is shoddy.  You may have to firm up their behavior (enforce what you've got) and wait the lease out. 

 

However, what I would do is fire that entire management company yesterday!  I would not accept another manager from the same firm.

 

If I were in your shoes I would suspect your "friend" of fraud.  There is a type of manager who tells the tenant he "understands their situation" and "wants to work with them" while threatening them with you; on the other side, that person blames the tenant for delinquencies.  When no one holds him accountable to do his job well, he might get comfortable and begin skimming.  I would want to know if the tenant had paid him the rest of the rent directly.  It might be hard to investigate.  Can you tell my background is in law enforcement?  :glare:

 

I should add that we rent and I'd be scared to pay late.  Our very nice manager would certainly enforce the lease.

[littlebug42]

Because things have not been done according to the lease on your end either, you might have difficulty evicting.  As a former property manager, when I had to go to court for evictions, I always had to show the paper trail of notices, for what violations, etc. If they decide to fight it, you may very well lose. New manager.  Late fees.  If rent is not paid by due date or grace period, notice to vacate delivered.  Also, they owe you the money for the water issue. You should demand payment.  

[meena]

Jenni, great point about difficulty evicting now due to not issuing notices in the past. That makes it even more imperative to get a new property manager who will enforce the lease and establish that paper trail ASAP.

[Mom2TheTeam]

edited for OP's privacy.

 

Oh, we made lots of mistakes when we first started doing this. I'm sure we still do. LOL! We are pushovers too, especially my husband.  We have learned through experience.  It takes time and enough difficult tenants to learn to toughen up.  For us, the cost of a management company pushes us to make it work ourselves.  But, self-managing isn't for everyone.  We had to learn how to go through the eviction process the hard way.  We did have to take someone to court to get them out.  Not wanting to evict and not wanting to go through the process influenced our judgement too and we waited too long and lost more money than we needed to. Now that we are really moving in the direction of acquiring more and more properties, I'm not allowing myself to let not wanting to go through the process affect us not being strict enough.  Of course, I still have to push my husband to toughen up.  We were totally prepared to evict one of our tenants this month.  The woman has lung cancer.  I felt awful, but they just couldn't pay the rent with her being the primary bread winner and not working.  Turns out, they knew that and left without us evicting...though, I suspect if they had not broken up, we would have had to evict and I would have even though I would have felt really badly about it.

 

I really get being a pushover, especially when you first start out doing this.  It just takes a situation like this to toughen you up...the first time someone tells you their spouse dies and then said spouse answers the phone and is seen in the neighborhood a few days later, you realize that unfortunately, renters lie.  It's sad that a few ruin it for the many.  At this point, it doesn't even matter if they are lying or not.  If they can't pay, they can't stay.  That's life even when it's hard.

 

Once you find a good management company, you won't have to worry about it because they will enforce the lease for you.  Good management companies enforce leases without emotion and don't care about the excuses.  They should also handle the eviction if it comes to that.  But, I agree with you that if you can salvage this tenancy you should. 

 

Good luck!