From the spooky depths of Grand Rapids Property Management, we give you a 2019 Horror Real Estate Story. You will hear the rundown of an investor’s new purchase gone horribly wrong.

The Quick Story

One of our clients purchased a duplex investment property. They missed several key items when they did the exchange. This led to one of the tenant’s using several excuses, delaying techniques and the court system to its fullest… If you want to hear our full real estate story, keep reading or watch our video!

The Full Real Estate Story

So this particular story that I have to share with you happened this year in 2019. It’s actually still happening as I tell the story as it’s not yet been resolved.

The Beginning of the Problems

We had a new client come on in June. When he bought his first duplex in Grand Rapids, it came with two tenants. This means each unit was occupied. Right off from the start there were problems:

  1. Claims were made by the tenant that they had paid their rent for that current month (June) to the seller BUT there were no prorated rents given at closing.
  2. The seller did not transfer the security deposits over to the buyer at closing.

Obviously this created a situation where the buyer didn’t have the security deposits nor the current month’s rent.

Tenant security deposits are property of the tenant until they move out and the landlord can make legal claim to it. These are typically passed on through the real estate transaction from seller to buyer.

Going to Court Again..and Again…

Time goes on and we are continuing to manage the duplex. The tenants are not paying rent so we end up having to go to court. About a month after we take over management, the upstairs tenants move out. So now there is one unit vacant which had to be turned in order to be rented out. HOWEVER, the downstairs tenant did not move out and still will not pay rent.

Cut through until now, we’ve been to court every month with the downstairs tenant from July, August, September and here we are at the end of October. We are going to court again next week. This tenant has payed rent for the months that we’ve gone to court AFTER we’ve gone to court but has not showed up to any of the court dates. Here we are thinking each time we go to court that we’re all set, things are going to start happening, things are going to fall into line, the tenant will move out…. BUT then the tenant files a Motion to Set Aside each time. Not only did the tenant not show up for court but then subsequently filed a motion to set aside which was granted each time. So we’ve been to court 2 times for every one time we should have been to court.

Trying a Different Route: Terminating the Lease

Finally we reach the point where the lease officially ended on September 30th. We filed a 30 day Notice to Quit to terminate the lease. Once again we went to court and the tenant didn’t show up, we were granted the right of possession by the judge. The tenant gets an additional 10 days to move out.

Will a Writ of Eviction Work?

10 days expired and we filed for the Writ or Eviction. The very next day I got a message from our attorney stating that once again the motion to set aside has been filed by the tenant.

By this time she has not showed up for any court dates on time, she has made claims that the rent was paid to the seller, they didn’t get the notice and so on and so forth.

The Unfinished Real Estate Story

We have another court date next week which will take us into November. At that point I’d like to say I know what’s going to happen, but the way things have gone I really can’t say for sure. I think we’re finally to the point, given that the last notice was a 30 day terminate, we might actually be seeing light at the end of the tunnel but, who knows…

The Moral of the Story

So the moral of this story… and there are a couple of ’em….

  • The first is to make sure when you buy a rental property that you are very clear with the seller that you are entitled prorated rent. This starts when you take over as owner.
  • Secondly, the security deposits are to be transferred to you in full as of the day of closing,

If possible on the deposits should be on the closing statement so there can be no chasing them around after closing.

The Update: 

We had the umpteenth follow-up court date in November. This was the court date that the tenant requested as a set-aside to our judgment received previously.  Once again….the tenant did not show up for this court date. This time the judge FINALLY dismissed the tenant’s request to set-aside.  We were able to enter an immediate possession of the property (Woop!).  After all of that work, the tenant ended up vacating the unit on their own just prior to being evicted. 🙄

The NEW Moral of the Story

Besides the points we made above, we have a new moral to this story:

  • Hire an excellent lawyer that specializes in the area you are dealing with (Landlord-tenant in this case). You won’t regret this decision as you are navigating the ins and outs of the legal system.

Thanks For Reading Our Real Estate Story!

So that’s your real estate story, if you enjoyed it take a look at some of our other blogs we’ve got a lot of great information here. Give us a call or fill our contact form. We’d love to hear from you. Have a safe and happy Halloween.

Hopefully you can use this real estate story to prevent your own frightening misadventure!

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About the author

Aaron has over 13 years experience in property management. With a focus on accounting and the “numbers” aspect of real estate, he loves to see a good investment succeed. He also enjoys talking to new investors and helping them overcome hurdles to their success.