We provide here a few questions that have been posted in the Community Forums and our answers to them.
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I’m considering buying a small retail/office strip center and am concerned about how to be sure the leases provided by the seller are legitimate?
You should certainly study the lease agreements, but you should not depend upon only the documents provided by the seller, as there could be some missing documents. Some other scenarios include (1) a tenant has paid rent for months in advance, meaning the buyer won’t be receiving rents for those months, (2) a tenant’s security deposit has been applied to rent or damages, (3) a tenant currently has a larger security deposit than stated in the lease agreement, with the buyer being liable for the full amount even if not receiving escrow credit for the full amount, or (4) a tenant has oral agreements with the seller that have not been disclosed and, although such agreements may not stand up in court, it could be costly to resolve the matter. You don’t need to be dealing with a dishonest seller, only a forgetful or disorganized one, to potentially have problems after closing.
The best way to avoid such problems is to make sure that your purchase offer requires that Estoppel Certificates be executed by all tenants. Basically, an Estoppel Certificate is a document executed by the tenant wherein he/she verifies the terms of the lease as disclosed to you, including any amendments(usually best to have all relevant documents as attachments) and confirms the amounts of deposits currently held by the owner, the current rent amount, and the date to which rent is paid. For more discussions regarding Estoppel Certificates see our “Buying & Selling Income Property” eCourse (Lessons 5, 19, 20, and particularly Lesson 26).
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My tenants moved out and left big holes in 1st floor carpet. Also, they damaged a sink and other stuff. The house was brand new when they moved in 2 years ago. I have to keep their security deposit and bill them for another amount of dollars to cover the whole repairing cost as I estimated. The estimation is based on average market value.
1. Does landlord have obligation to provide detailed receipts and photos etc to tenant or their attorney? What if the carpet replacement has not been done yet?
2. Can I hold all the proof to present only in front of judge, since I have already gave them itemized descriptions of damages. Also I noticed them regarding the major damages the last time when I visited the house before the lease expires. They also signed a detailed Move-Out List where specific damages/charges cost are there.
3. The last question relates to legal. Their attorney sent me a letter. Do I have right to ask the attorney to give me a proof that he is authorized by ex-tenants to talk with me? Anyone has similar experience?
My layman’s answers to your questions are as follows:
1.& 2. You probably are not required by law to provide receipts and photos before going to court, but you need to weight the cost (of at least your time) of going to court against your concern about providing such information ahead of time. You also need to keep in mind that the problem is more likely to go away if an attorney sees that you have irrefutable proof. In fact, it might be that the more the attorney sees of your proof, the more likely he will tell his clients that they’re wasting time and money to argue about the matter. If you have detailed move-in and move-out checklists signed by the tenants and photos of the condition at both ends of their tenancy, I don’t see how you can lose in court. You didn’t mention that you also had a signed move-in checklist, but if it was a brand-new never-lived-in house at the beginning of their tenancy and this fact is provable, not having a move-in checklist shouldn’t be an issue unless the law of your state specifically requires a move-in checklist.
3. You could certainly require proof of attorney representation, but I think it is just as important, perhaps more so, to verify that it is a real attorney who sent you the letter rather than the ex-tenant or a non-attorney representative. I would verify the name, address, and current licensing with the Bar Association of your state and check for a listing in the White Pages and an ad in the Yellow Pages. If those items check out compared to the letter you received from the attorney I would then call the listed phone number and see if they will confirm representation. You might even try to talk with the attorney in order to run up the tenant’s bill, assuming that the tenant is not obtaining free legal help from a friend or relative or from a tenant association. People who pursue obviously losing legal actions usually do so because of the availability of free legal help. Just be careful what you say and present yourself as the reasonable and knowledgeable landlord that you are.
If a lot of money is at stake, you should consider having a competent landlord-tenant law attorney (preferably one who usually represents landlords) answer the request, as a phone call or letter from your own attorney can have a lot of impact regarding such a matter. You should be able to get such minimal help for a reasonable cost, so it might pay to call a couple of attorneys.
If and when you provide info to either the attorney or the ex-tenant, provide only copies, retaining originals for your possible trip to court.
An important factor is whether or not you provided detailed accounting to the ex-tenant in full compliance with your state’s security deposit law, particularly that you can prove that you supplied the accounting within the required time period. Many states have serious penalties for failing to follow the law in all respects, including forfeiture of rights to the deposit and/or damages against the landlord for 2 or 3 times the amount of the deposit – although, depending on the state, you might still retain the right to file a lawsuit for the damages. Be sure that you take proof of doing so with you if you end up in court.
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In March, 2010 I gave 30 days notice to the tenant that her rent will be increased by 5%. She does not pay the increased rent consistently. From April to June she paid only the old amount. I gave her a 3-Day Notice to Quit or Pay the 5% and she complied within the 3-day limit. However, she paid the increase as a separate check. Then starting in July she started only paying the old amount again. She has been out of town on and off for the last few months and she promised to take care of any unpaid rents. She hasn’t so I finally gave her a 3-day notice again for the 5% not paid from July – September about 2 weeks ago. The 3 days has now passed and she has still not paid the increased portion.
Can I proceed with the eviction process for her not paying her 5% for the past several months?
If I file the Unlawful Detainer because the 3 days has passed, should I not accept any rent from her, even if it is only the old rent (partial rent)?
Based on my understanding of the matter, it is my opinion that you can proceed with eviction based on your most recent 3-day notice because the 3 days should be considered only to be a minimum. In hindsight, you might have been in a better position if you had served a notice when the July rent did not include the increase, as judges sometimes consider failure to proceed in enforcing lease terms in a timely manner to be a waiver. If your lease agreement has provision for late charges, you should have been collecting them along the way each time she failed to pay the new amount. Failure to do so may have set a precedent that might prohibit you from doing so now. However, it probably won’t hurt to add them into your unpaid amounts, as this may itself get her attention.
Under the circumstances the “waiver” issue would not likely be a problem if you can convince the judge that you postponed collection of the increases under mutual agreement as a favor to the tenant. For future reference, remember that any agreement to defer your enforcement of lease terms should be in writing and signed by both parties.
Whether or not you should accept payment may depend on the landlord-tenant law of your state. Some states require starting over with a new 3-day notice for the balance upon acceptance of partial payments. Other states allow the notice to remain in affect. Still others do not require starting over as long as the tenant signs an agreement to that effect. You need to check the law of your state. As a practical matter, you may be better off to accept the rent and serve another 3-day notice for the total of unpaid increases after her check has cleared. Since there has been a history of her paying the increase, even though late, a judge would likely not accept any claim that you waived the increase. Even if that happened, you’d likely be ahead of the game in having the old rent for October. Furthermore, you could give her a new 30-day notice of a significantly larger rent increase and proceed appropriately if she continued to play games.
If you have any worry about the 2-week delay you could give her a new 3-day notice for the full amount owed including all late charges accrued and the full proper October rent, as it will only require an additional 3 days and should avoid any issues regarding the old notice. If it were me, I would proceed immediately and not worry about the delay. Filing may get her attention because she will now owe you yet more because of your filing costs, assuming an adequate lease clause or state law regarding legal costs.
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Most of the issues discussed in these Q&A’s are covered in considerably more detail in our eCourses and/or in our Mini Training Guides.