Last year I started renting out my house. I found a Residential Lease Agreement commonly used in the state of Tennesee. Leased my house out to couple for a One year agreement with the option to move to month to month after that agreement was up. Everything was going smooth for the first 5 months, then payments started getting later and later. After the thrid month I called and talk to my tenants, reference our lease agreement rent was due on the first of month by direct deposit and/or be recieved by mail no later than the 5th. The next 2 months rent was on time, that next month was 16 days late and the month after nothing. On the 22nd of month I visited my tenants and was informed one had last there job. Told I understand and if they needed out of the lease, I would work with them as much as I could but I could not allow them to stay with no payment. He said he understood and thank me, and said they would start looking for a new place and be out in September...
My tenants did say they would pay what they could on there pay day to help me continue paying the mortage on the house. For the month August I got no rent, in Septemeber they made two deposit one in the begining of the month and one toward the end that equaled to 83% of rent for that month and deposited 20% of this month rent this past week. The lease is up in November, and I want to make sure I take the right steps in moving them out with out any more money coming out of my pocket.
I knew this was risk and kept money in saving incase something like this would happen. I just hope and pray for smooth exit at this point and on to the next.
You could just continue until the lease expires in November and not renew it with the current tenant (since the month-to-month is an option at your discretion). Your best venue however is to contact a real estate attorney and get their advice. Unless a respondent on Trulia is also a licensed attorney, we are unable to render any type of legal advice.
Hope this answer helps,,
Tina Evans, Broker
CRYE-LEIKE REALTORS/Cookeville, TN