They seemed like such nice people when they looked at the apartment unit. Their rental history checked out, their credit was good and they had more than enough income to pay the rent. Then the pod people came, beamed them up to the mother ship and replaced them with these foul-mouthed cretins who are vibrating the walls with gangsta rap every night.
Or, as is often the case for real estate investors: They came with the deal.
“You’ll see investors inherit a bad tenant,” says Melissa Prandi, a property manager for more than two decades and author of “The Unofficial Guide to Managing Rental Property.” “You have our condolences.”
Most tenants are good people who pay their rent and cause no trouble. But eventually, every landlord encounters the other kind. What’s a landlord to do with the tenant from hell? The answer will vary by state and even municipality, but in general, the overriding advice from the pros is “Proceed with caution.”
Tenants have rights
Tenants have myriad legal rights, and a tenant who knows he’s getting bounced and won’t be getting back his security deposit might vent his frustration on the unit.
The most common tenant problems are late rent and bad checks, followed by additional residents, pets, noise and unsupervised minors, Prandi says. While investor-owners often hope that things will get better on their own without having to get involved, that’s a big mistake.
Regardless of the specifics of the problem, the starting point for dealing with bad tenants is to know the lease and the law. Leases should specify how and when rent is to be paid, payment of late fees, and any activities that are prohibited. There also should be a catch-all “peace, quiet and enjoyment” phrase that covers anything that bugs other tenants or neighbors enough to complain about it.
No ‘self-help’ evictions
The law will tell you what you can and can’t do in your state to get rid of them. Just about every state prohibits what’s known as a “self-help eviction,” says Boston-based attorney Peter Brooks, who specializes in landlord-tenant law.
“You can’t go throw them out, lock them out or threaten them out,” he says. “You can’t evict them if they’ve exercised any of their tenants’ rights. You can’t evict a tenant who has filed a complaint against you, because it’s considered retaliatory.”
Plus, as a basic need, housing is safeguarded by the Fair Housing Act. (You might be exempt if you rent a single-family house without the use of a broker or you own a building with no more than four units and live in one of them.) The quickest way to get into trouble with the feds is to single someone out and treat them differently, says James Landon, a Tucson, Ariz.-based landlord-tenant attorney and author of “The Weekend Landlord.”
“Send nonpayment notices to everyone at the same time; send out the same notices to everyone,” he says. “It doesn’t matter if they’re a horrendous tenant. (If you treat them differently,) you’ll be in big trouble.”
Prandi says she starts with a phone call to tell a tenant he’s violating the lease. That’s always followed by a letter that recounts the phone call and includes a copy of the rental agreement with the violation highlighted.
If the problem is related to late rent or a bad check and a phone call hasn’t worked, Prandi starts the eviction process. Every state has a specific form that has to be delivered to the tenant, giving them a certain number of days to pay up or get out. For instance, in California, it’s a three-day notice to “pay rent or quit.” Other states give tenants up to 15 days.
This is where it’s important to know the law in your state and municipality. Some states require that the letter be delivered by a disinterested third party, usually a process server or a sheriff’s deputy, or demand proof that the tenant received the notice. You need to know if the tenant has three business days or three calendar days to respond.
One tip: Make sure you have signed leases for every adult in the house, and send separate notices to each of them. This avoids situations in which one spouse or housemate gets the notice and the other says he didn’t know anything about it — or filing to evict a tenant and discovering there’s someone else living there with whom you have no lease.
Cure or quit
If the offense is behavior-related, the tenant needs to be sent a “cure or quit” notice. In layman’s terms, he has a certain amount of time to fix the problem or face termination of the lease. If he shapes up, great. If not, then he’ll face eviction. The exceptions to this rule include criminal behavior, Prandi says. If someone is selling drugs out of your unit or is violent against other tenants, for example, you can skip the notice and go straight to eviction.
If you’re lucky, the offending tenants are nearing the end of the lease period and you can simply notify them that you’re not renewing their lease. (Check the law in your state to find out how much notice you need to provide.) If lease-end is still months away, you can try to avoid the expense and time of an eviction by buying out the lease, which is essentially paying them to leave. To reduce the risk of property damage, make the payment contingent on the unit being in good repair.
“It may be less-expensive than going through the eviction process, especially if you’re worried about property damage,” Landon says. “That can be a lot more expensive than an eviction.”
“I’ve seen people tear money in half and say, ‘When you’re out all the way, I’ll give you the other half,'” she says. “It worked. Money talks, as they say.”
If the tenant flatly refuses to leave, it’s time to file for eviction. The process is labor-intensive and time-consuming, but you want it to stand up legally, so you need to follow state and local law precisely. For instance, accepting rent from a tenant after you’ve filed for eviction can be construed as re-instating the tenancy, Brooks says. There are ways to accept money after you’ve filed, but it varies by state. It might be worth a visit with a landlord-tenant attorney to learn the ropes.
Trashing the place
One of the touchiest situations in an eviction is keeping tenants from trashing the place before they leave. As the landlord, you have a right of access, Brooks notes. He’s seen some landlords begin an eviction by checking the condition of the unit. Take someone with you who is neutral, he says, and take lots of pictures. A court order enjoining them from doing damage to the unit “gives you the power of contempt and jail time to ensure nothing is done to harm the property while you go through the process.”
Once the eviction is underway, though, Prandi recommends steering clear of the property and the tenant.
“Make sure you’re not provoking anyone to get mad,” she says. “Let the law handle things. If you’re in the middle of an eviction, stay off the property and just expect that the place will need work.”