Rental Property Update February 2009

By | March 27, 2009

This post is about my rental property in Philadelphia. In this post, I talk about my landlord experience – the good, the bad, and the ugly. All my posts that are related to the rental property can be found in the Rental Property section, including the bad tenant saga series).

In February, my tenant, Billy was desperately trying to avoid paying the judgment. Billy called the Department of Licenses and Inspections (L&I) and reported violations in the house. I was notified by L&I of the violations in the house and had to follow up on all the issues.

I hired a contractor, Lee to make repairs but unfortunately the repairs did not pass the L&I test. The repairs needed to be made again.

The court hearing was on February 20th. Unfortunately, I could not fix all the issues in the house before the court hearing date.

I spoke to my tenant-landlord adviser, Barbara and told her that the violations could not be removed in the computer system before the court date. She suggested that I settle with the tenant outside of court and asked if I could forgo all the rent they owed me in exchange for the tenants to leave.

I thought about it. If I pursue the battle for the judgment, the tenant will just keep trying to fight back. There’s a chance my case will be postponed in court because the violations were still there in the computer system. The case would most likely drag on for a few more months. Barbara mentioned that even if I win the case, the tenant can file for an appeal. Also, there’s no guarantee that Billy would have money to pay the judgment even if I win the case. I would then have to go after him for the money and pursue a game of cat and mouse. This reminds me of the cartoon Tom and Jerry, and Billy is the slick mouse.

Given the options, I thought it would be better to get rid of the bad tenant as soon as possible – accept the loss and move on. I called Barbara and told her to go ahead with the settlement. And she said that I do not need to show up in court. The court hearing took place in the morning on February 20th and I called the tenant officer in the afternoon for an update. The attorney proposed the offer to the tenant and the tenant accepted it. In exchange for all the money the tenant owed me, the tenant would have to vacate the house by March 31, 2009, more than four weeks of time since the court date.

I had Lee go back to the house to finish up the repairs because of the violation in the house with Dept. of License and Inspections. When the work was done, Lee called and updated me of the status.

Billy called me a few days later and told me that the contractor did not do a good job. He complained that Lee had left a hole in the door above the key knob and that the sink was still not draining properly, amongst several other things. Billy said that he wanted to make sure that I was getting my money’s worth when hiring a contractor. He claimed that he was looking out for me and he wanted the best for me. He said that he was an honest man and he never wanted to do anything to trouble me. I was dumbfounded. Since I did not want to offend him while he still living in my house, I politely thanked him and told him that I would take care of it.

Billy said that the Dept. of License and Inspections would give out heavy fines, as much as $20,000, if the repairs would not be done properly. And he did not want me to lose money. I was furious that he was the one who started the trouble, but I kept my composure and thanked him for his concern and told him that I would take care of it. I let him know that he would be leaving the place soon and I asked him to deal with things the best he can.

At the end of March, my tenant would need proof that he returned the house to the landlord. My tenant asked me to meet him in person so that I can sign a document and he would take it to the attorney’s office. That means I would have to schedule a trip to Philadelphia at the end of March.

I mentally prepared myself for the damages that were done to the house and expected to make seriously repairs to the house after it is vacated. Lee  had told me that the front storm door was broken and the living room window had a hole, about the size of a baseball.

I received a water bill with an overdue balance for $252.45. It was the tenant’s responsibility to pay the utilities and it was not paid by the tenant for many months. Because the water bill was in my name and was tied to the lien, I knew that I would eventually pay for the dues.

water-bill-2009-01-16

I became so tired of listening to my tenant’s stories. He told me many times he had a check for me and he would send it out the next day, but I have not received a check from him for many months.

To deal with the violations in the house, I spent about $400 for hiring the contractor. I still had not heard back from the inspector in Dept. of License and Inspections. I hope the inspection was approved.

Below is a detailed log of the events that occur in chronological order:

Sun 2/01/2009: I received a water bill with an overdue amount of $252.45.

Mon 2/02/2009: I received a letter of Violation Notice from the Philadelphia’s Department of Licenses and Inspections. The letter informed me that an inspection was done on January 16th, 2009. In the letter, they provided a list of things that were not in compliance with the Philadelphia Code. The number of days to comply the violations is 10 days.

Tues, 2/03/2009: I called the Philadelphia’s Department of Licenses and Inspections and spoke to the inspector who inspected the house on January 16th. The inspector told me to fix all the inspections and another inspection will be done on the week of February 16th. I asked her that what if I fix the violations and the tenants removed all the fixes. She said that she will inspect the house very soon, and if necessary she can go inspect the house a day after I inform her of the fixes.

I called Lee and gave him a heads-up about a small job that I had for him.

Wed, 2/04/2009: I sent Lee a list of things that needs to be worked in the rental property and I asked him for a quote.

Items that needed work
#1 Install Carbon Monoxide Detector
Location: 2nd Floor Hallway

#2 Repair Water Damaged Ceiling
Location: Living Room

#3 Repair Obstructed Wash Basin Drain
Location: Basement Laundry Sink

Thu, 2/05/2009: Lee called me back with a quote for the list of the things that need to be done. The total price was $300. The break downs were $80 for the carbon detector, $120 for the ceiling, and $100 for the drain clog. I asked him to do the work on Friday, February 6th.

I called Billy to inform him of the scheduled repair on Friday and to confirm that someone will be home. My tenant told me that he has money set aside for me, about $600-700, and he was not sure if I would take the money. I told him to send the money to me anyway.

Billy asked if I would show up on Friday, because he wanted to sit down with me, have a drink, and talk things through. I told him that I have work and would not be.

Surprisingly, he also inquired about the water bill. He said that he had not received any new bills for the house. I told him that I have sent him copies of the bill previously but he had not paid any of them, so I had stopped sending the bills to him. I said that I will forward him the latest bill, the bill is several months overdue.

Fri, 2/06/2009: Lee called and gave me an update of what was going on. He installed the carbon detector device but did not work on the living room ceiling and basement sink. He would need to buy material to repair the ceiling and sink and would return on Saturday.

Sun, 2/08/2009: Lee called and reported that he repaired the basement sink. He would return on Monday to work on the living room ceiling area.

Sun, 2/15/2009: I had asked Lee to take pictures of the repairs with a digital camera, before and after the repairs. He couldn’t find a digital camera and had use an old 35mm film camera. He would have to develop the negatives before he could send me the prints. Unfortunately, I would need those prints before Friday, the day of the court hearing.

Mon, 2/16/2009: I called Barbara to ask her some questions before the court hearing date. I wanted to know how long (by law) I would have to keep the tenant’s belongings if they do not move them out. She told me that it is customary to hold the items for 30 days, however the lines are not black and white. This issue could be addressed in court. Also, I asked if I could accept payments from the tenant. She said that I could, but since I would be in court, it’s better if the tenant brings the check to court.

Wed, 2/18/2009: I called the inspector at the Department of Licenses (L&I) and Inspections and asked her about the status of the re-inspection. She told me that there were 4 issues and only one issue was resolved.

1. The carbon monoxide detector was not installed. The repair guy had mistakenly installed a smoke detector.
2. The sink in the basement is still overflowing during laundry sessions.
3. Double key locks were to be replaced by turn key knobs.
4. The ceiling in the living room needs repair.
Of the 4 issues, only the living room ceiling was repaired.

I called Lee and updated him on the results of the L&I report. I asked him to go back and look for a carbon monoxide detector and repair the sink. I also asked him to give me a quote on changing the door knobs.

I talked to Barbara and gave her the update about the re-inspection from L&I. She said that I would just have to tell my story in court and see how it goes. Apparently, she said that the carbon monoxide detector requirement is a new law that was effective as of January 1, 2009. I’d just have to tell the judge I would comply with the law immediately.

I asked here that if I change the locks on the door if I still have to give the tenant a set of keys. Barbara said that I must give them a new pair of keys if I change the door locks. But she also noted that the double key locks can be replaced with turn door knobs without changing the actual locks, thereby not needing to get a new set of keys.

Thu, 2/19/2009: Lee called and quoted the price to install a new lock at $100. Unfortunately, the new lock would require new keys.

Barbara called and asked if I want to settle with the tenant outside of court. She brought out that I once mentioned about getting him out of the house and forgetting about all money that he owes me. Since the court date was the next day, I asked her what if I proceed with the judgment in court. She said that even if I win in court, he can come back later and appeal the case. Then the case will get dragged on. She doubted that even if I win the judgment I would get the money from them anyway, plus I didn’t have their bank account numbers. Also, she warned that the judgment may not be heard in court on Friday Feb 20th and may be rescheduled.

I wanted to know if that’s my best option or if I am close to winning the case. I thought with her experience she would be able to give me more information. However, she said that there are too many factors in the case and she could not answer any of my questions. When I asked if I could try alternative methods to deal with the tenant situation, she said that I asked too many questions and became impatient with me. She did not want me to ask her any questions. But how could I make an informed decision if I do not know my options? And I thought she was supposed to help me out; it puzzled me.

I thought about it for half an hour and decided to go with the option setting with the tenant for getting him out of the house and allowing him to forget all the money he owes me. Given the circumstances it would be

Fri, 2/20/2009: I called the Barbara’s office on Friday in the afternoon and asked the results of the settlement with the tenant. The assistant answered and told me the tenant had agreed to settle and leave the house by March 31, 2009. I was surprised that they still had another month, but I would there was no way the tenant would agree to leave by the end of February since it was already near the end of the month.

Given the circumstances, I thought the settlement was okay. Otherwise, the case might be dragged on for months and who knows what will happen. I thought it was unfair that the tenant could walk away without paying anything after leaving in the house for so long, however if I continue to pursue the judgment I would end up losing more money that I claim for. It was already costing me a lot of time.

Sat, 2/21/2009: Lee called me and said that he could not finish the repairs in the rental property. The tenant did not let him do the repairs and told him to leave. I told the contractor I would talk to the tenant.

Mon, 2/23/2009: I called Billy and told him to let Lee to the house so he can fix all the repairs. Billy told me that he needed me to sign a document by March 31 to prove that he has handled me back the house. I would have to meet him there in person and inspect the house.

Tue, 2/24/2009: One of the assistants from Barbara’s office called me and told me about the results of the settlement. The tenant had sign documents with attorney stating that they would have until March 31, 2009 to vacate the place and then the judgment will be “satisfied.” I guess by “satisfied” it means they don’t owe me anything anymore. I asked what if they don’t move out by then. They told me to give the office a call and they will file eviction process.

Names Table
Billy = My tenant
Mary = My tenant’s girlfriend
Earl = My real estate agent
Lee = My contractor
Barbara = My tenant landlord adviser
Note: Names are changed to mask the people’s real identities.

Read more:
Rental Property Update March 2009
Rental Property Update January 2009

2 thoughts on “Rental Property Update February 2009

  1. Pingback: Carnival of Personal Finance #198 | Growing Money

  2. Pingback: Rental Property Update January 2009 | Growing Money

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