I have an informal agreement with a seller of a property, where his month-to-month tenants have lived rent-free for six months. The owner is attempting to get them out of the property, but I’m not confident that he’ll be able to do so. Any suggestions on how to handle this?
Need a lot more info in order to get any real advice.
What is an “informal agreement” exactly and for what?
Is the rental supposed to be “rent-free” or simply tenants not paying?
Written or oral lease?
Has landlord given notice to tenants?
The seller does not have a lease with the tenants, and they’ve given him excuses every month as to why they can’t make the rent payment. We verbally agreed on a price, but I told the seller that I couldn’t take the property with the current tenants in place, and I’d have to see the inside of the property to be firm on price. He said that he would go by this weekend to tell them that they have to move.
An investor at my local REIA referred me to a local company that handles evictions for investors, so I will probably pass this info along to the seller. Obviously, I’m not confident that the seller will be able to entice the tenants into leaving peacefully.
He doesn’t need to “entice” them to leave peacefully at all. If they are supposed to be paying rent and aren’t, he can evict them (according to your state’s landlord-tenant laws). He must have more $$$ than sense if he’s waited six months without any funds from these renters.
Don’t know your deal or terms, but if they need to be out fast, you could also offer them some cash to leave fast, and with the place clean. Works alot of the time, is as cheap, or cheaper if they wreck the place, than evicting, and depending on your state guidelines, much faster.
I guess “entice” was a poor choice of words :biggrin. Anyway, I did mention the option of paying them money, but the seller didn’t like that idea. Are you saying that I, as the buyer, should offer the tenants money? If so, it sounds like I need to get the property under contract (in hindsight, I probably should have already gotten it under contract and included an occupancy clause).
Get your contract signed with contingiencies so that you can make adjustments or get out of it.
In every stae in the USA non-payment of rent is legal grounds to evict, and the courts will throw them out and the sheriff will see to it that they vacate. So the seller can get them out.
Is it possible that the tenants are relatives?
In any case, the tenants have discovered that they can live for free and nothing happens to them. So at this point, they are not going to leave just because the landlord asks them to go.
One thing to think about is that you should be able to get a big price break if you deal with the problem tenants. The seller seriously does not want to deal with them, so you can take them off his hands, for a price (but get inside forst to make sure that isn’t a meth lab)
So, you’re second solution of taking the property with the tenants in place would require that I get inside the property prior to closing, which may not be possible with these tenants. I’ll be calling the seller today to get the latest on the situation, but I’m inclined to write up an agreement where I would close x number of days after the tenants have vacated. Then, I would recommend to the seller the eviction service I mentioned previously.
Anything is possible. You just need a plan to proceed. Is the property the landlord’s or the tenants? At this point, we’ll assume it still belongs to the landlord. If that’s correct, then he has every right to inspect the property, again, according to your state’s landlord-tenant laws. I’d assume that in order to enter, he would have to give them at least a 24 hour notice. At this point, I’d definitely make it in writing, too.
If they won’t comply, it’s very possible that he would have the ability to have a sherriff deputy escort him to the property, if need be.
Of course, please goes a long way too.
And if that doesn’t work, there is still cash. I’d doubt that they’d turn down $20-40 bucks to let you do a walk-thru.
Thanks Roger and tatertot. I was able to get in touch with an experienced investor in my area, also, so I’ve got some good ammo to work with.
Again, thanks for your time.