Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I have tenants that signed a one year lease. They had wanted to purchase the property but needed one year to save some cash. At the end of the first year lease, I was told that they would have down payment moneys in 6 months. Meanwhile our taxes went up almost 300.00 per month which I agreed to eat allowing them the 6 months to save up a down payment. At the end of that 6 months they had no down payment and took a financial down turn. At that time, I sent them a letter with disbursements from their security deposit totalling about 80% in late fees, advised them that we would renew the lease but at a higher per month cost. I asked that their security deposit be brought current and an increase in rent. They said NO. Just simply NO. THey also refused to update their contact information or sign a new lease.
Also and this is a real biggie, the homes basement is partially underground when a realtor went to look at the home she said the mold was horrible in the basement area which they closed off rather then let air circulate. We lived in the home for 20 years and NEVER had a mold problem we also used the basement and ran a dehumidifier when needed in the summer. I have to re mediate the mold prior to listing the home but I am worried that because of their actions, they could turn around and sue me for having mold in a rental.
THe rental market stinks and although the home has been advertised, no firm commitment from others looking to rent so kicking them out today is like cutting off my nose to spite my face since although I am losing money, I am still getting SOME money towards the cost of the home.
So my question, first What would you do? Second, how can I get the late payments of rent on their credit report?
Its a 350,000 home with now a 300.00 security deposit, they have 2 kids and cats.
If their lease is now expired simply serve them with whatever is required in your state, say 45 Day "no reason" Notice to Vacate. Correct any problems in the house and re-rent or list. Next time be sure to get a whole lot more than a $300 deposit! Collect the maximum allowed by law, normally an amount equal to 1 month's rent. The next time some prospective tenant wants what basically you have described as a lease option agreement, get about $20,000 down in non-refundable option money and be sure that you have a proper lease AND purchase agreement executed. You should have an attorney help you with this. I have my doubts that you should have "used up" their deposit to pay late fees. Security deposits should be in a trust account and not touched until the tenant vacates, then used to pay for damage or loss that the tenant caused.
I have tenants that signed a one year lease. They had wanted to purchase the property but needed one year to save some cash. At the end of the first year lease, I was told that they would have down payment moneys in 6 months. Meanwhile our taxes went up almost 300.00 per month which I agreed to eat allowing them the 6 months to save up a down payment. At the end of that 6 months they had no down payment and took a financial down turn. At that time, I sent them a letter with disbursements from their security deposit totalling about 80% in late fees, advised them that we would renew the lease but at a higher per month cost. I asked that their security deposit be brought current and an increase in rent. They said NO. Just simply NO. THey also refused to update their contact information or sign a new lease.
Also and this is a real biggie, the homes basement is partially underground when a realtor went to look at the home she said the mold was horrible in the basement area which they closed off rather then let air circulate. We lived in the home for 20 years and NEVER had a mold problem we also used the basement and ran a dehumidifier when needed in the summer. I have to re mediate the mold prior to listing the home but I am worried that because of their actions, they could turn around and sue me for having mold in a rental.
THe rental market stinks and although the home has been advertised, no firm commitment from others looking to rent so kicking them out today is like cutting off my nose to spite my face since although I am losing money, I am still getting SOME money towards the cost of the home.
So my question, first What would you do? Second, how can I get the late payments of rent on their credit report?
Its a 350,000 home with now a 300.00 security deposit, they have 2 kids and cats.
Well I don't know if you can even do anythign about the late rent. Maybe you can put it on their credit report, I don't know. You already claimed a prtion of their security deposit, so in my interpetation they are now current. Seems like a pretty big mistake if I'm reading your post correctly.
As to what I would do? When is the last time they paid rent? If you think they will continue to pay rent I suppose you can wait to kick them out until you get an interested party or until winter is over. Make sure you inspect frequentely to make sure they aren't damaging things. I also wouldn't necessarily put the payments on their report until they leave. They could get mad not pay rent damage the place.
Since their original lease expired, they are on a month to month. Give them a choice either to sign a new lease agreement with "x amount down" toward the purchase and make them sign a 12 or 18 or 24 month time frame to qualify for the loan to buy the house. If they default, they lose the down payment and any rent towards the purchase.(like a buy here/pay her car) If they don't like that, or cannot do that, I would simply back down off of the "rent to own" and simply figure your costs with the tax adjusment for the rent. Something is better than nothing. As long as they are in there, it is difficult to get late charges etc., and I do not think you can send them to collections while they are still living there.
As for the mold, they are using that as a scare. Do what you did before when they leave, air it out before it gets too bad. It seems they want to use that as leverage against you. If it's really that bad, why are they staying? Don't let them get to far out of control. Keep an eye on the cat, a Tom Cat's spray can wreck a house quicker than the mold, and that smell never leaves. lol
I'm not sure of the laws in your state, so please check that, but you may actually be violating Landlord-Tenant Law by taking money from the security deposit. I don't believe you can do that until after you give them notice of your intent to make a claim on the deposit. The tenant has to be given the opportunity to resolve the issue.
I've learned in the last few years the pitfalls of lease-purchase deals. One of them is what you've experienced with the "buyer" not getting their finances together to be able to purchase. They may have good intentions, but some folks are just "career tenants".
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
