My family has been renting a commercial building to a man who runs a restaurant out of it. Over the last year he has not paid four sewer bills, the oldest being a year past due. We have brought this to his attention multiple times and he still hasn't paid. This has resulted in the sewer district placing a lien on our property. I texted him about this which resulted in the following…
Me: I dropped off another notice of past due sewer bills. What is the reason they have not been paid?
Him: Hi. Cause I pump the grease trap 4x a year and their sewer system still stinks up my restaurant and they don't fix anything. Town sewer district sucks. They don't deserve any money. It's an on going issue in [town name].
Me: So what is your plan? The bills aren't gonna go away and the unpaid sewer charges are creating a lien risk against our property.
Him: My plan is for the town sewer to come out and figure out why their system is failing. We can also all talk about selling the building as well. I will talk with them next week and find a solution. Also on the subject. Things on the building and the parking lot need replacing. Here's a list that is far beyond a maintenance obligation.
Roof needs replacing, the atrium needs replacing, the heating/AC units all need replacing, the parking lot needs to be all replaced and resurfaced, and because of the settling of the building the tile floor needs to be replaced.
It's worth noting he's been vocal about wanting to buy the property for a while now. Any recommendations here? It seems like we're trending towards getting lawyers involved
Tenet not paying bills which resulted in liens on our property
byu/GrayFox6688 inpersonalfinance
Posted by GrayFox6688
20 Comments
Lawyer. This is headed for court.
Sounds like it’s your bill even if there’s a contract between the two of you that he’ll pay it.
Get a lawyer, threaten legal action/eviction and force him to pay. Not much other options. You have a lien on the property so anything not official is the wrong route.
May need to pay it yourself, in the meantime, and sue for the money depending on the status of the lien/how long this has been occuring.
He’s probably allowing damage to accumulate so he’ll be in a better bargaining position when negotiating a purchase price.
does your lease agreement clearly state that he is responsible for the sewer bill?
what is the penalty for not paying?
what does your lawyer say?
your building, you need to pay the lienholder.
Then, you can sue your tenant for the damages, assuming you have it somewhere in writing that he’s the one on the hook for that bill. If he’s still buying then include it in the sale price.
Why on earth is the utility billed to your tenant? Much better for sewer or water to be titled to the account of the owner and billed to tenant by owner. You have much more control and visibility that way.
Get a lawyer have them go over the lease before this becomes a more expensive lesson.
You are most likely required to provide working sewer to the tenant. If the sewer isn’t working, that’s on you. Pay the bill and call the city, hire plumber, etc. to get that figured out.
All the other stuff depends on the terms of the lease. If there is an exclusion for normal wear and tear, then you probably don’t have a claim against the tenant because roof, HVAC, parking lot, etc. are designed to last about 20 years, and most likely they are 25+ years old. Therefore, “normal wear and tear” would exclude those items from being tenant responsibility.
In other words…if the AC unit is 10 years old and needs to be replaced because the tenant failed to do proper annual maintenance, then the tenant would be responsible for 50% of cost to replace. If the AC is 30 years old and needs to be replaced because it’s beyond typical useful life, then wear and tear exclusion applies and tenant is not responsible.
My guess is you have 3 options, but of course talk to lawyer and understand I’m just guessing without seeing the lease.
1. Come to an arrangement with the tenant about fixing up the property. Decide who will pay for what, and what new rent will be.
2. Sell the tenant the building.
3. Fix the sewer and let the tenant continue to rent it as-is knowing that when tenant moves out, you will have to spend some money to fix it up.
How is the restaurant performing?
Is he not paying because he can’t?
sewer and water bills are the responsibility of the owner not the tenant in many municipalities – hence the lien on your property. Write a better lease agreement and roll those into the rent
1st, Stop communicating directly with your tenant. This is such a common landlord mistake. There should always be someone between a landlord and tenant. Property Management company or lawyer.
2nd, Pay the lien and bring them to court for damages. If they can’t pay a bill, they will never pay a mortgage.
3rd, Get the property inspected and find out if any of the property allegations are true. You don’t want an angry tenant damaging your property and saying they told you that things were already damaged. A property should be properly inspected at least once a year.
4th Lawyer and possible eviction.
Utility’s should be in tenets name and services should have been cut long ago.
What kind of scummy municipality leaves unpaid services active and bothers with a lien for an amount that has to be paltry, most municipalities would have cut water and sewer after the 2nd unpaid bill.
As far as his complaints about existing issues on the property they seem valid… and are of a separate nature.
He should be withholding rent from you, because 99% chance the issue is on the owners side.
Likely badly routed vent lines that need to be investigated by a capable plumber.
The rest of his issues could also be valid, but there are adult channels and ways to start these processes or he can find another building to accommodate him.
Evict. Mot paying bills resulting in a lien voids the lease. And sell. If they want to buy it they pay 10% over market for trying to beat you up over repairs
While you’re a person and this is finance, this isn’t personal finance, this is a commercial rental property.
His grease trap still smells because 1) it needs to be serviced more often 2) the lines need hydro jetting
Go hire a lawyer and file an indemnity claim against the tenant, or if it’s for less than your states small claims threshold, sue them yourself in small claims court
Is there an issue with the sewer system or is he making it up?
I think you just need to start eviction proceedings. Enough of this nonsense
He is trying to impoverish you in order to force you to sell to him. You need to evict him, and pay the lien yourself. Then sue him for the balance. (Obligatory IANAL)
Yea u could look over that lease because most of the time, he would be responsible.
But best thing you need to do is get a lawyer first. Then pay off the lien before you lost the property.
This honeslty sounds like he is hoping you lose your property so he can buy it off for cheap later.