Commercial real estate advice/tenant eviction
Hi r/commercialrealestate I have a question and need advice regarding a commercial unit. The post is long but I want to make sure it is clear. Apologies in advance if this is wrong place . 

So a little background, my parents own a retail commercial building in CA. The building was built in the 1920’s, it’s 5 units that consist of:
1. Grocery market (we own)
2. Ice cream shop 
3. Mexican market
4. Tattoo parlor
5. Thrift store 

My parents have owned the building for 15 years. I’ve asked them to try and remodel it because it’s outdated. But they don’t know if they would qualify for a loan since they’re retired and the city is really strict on our building because it’s historical to the city.

So my dad has pretty much been the property manager since I can remember. He’s the one that handles the paper work (collecting rent) and maintains the building. Does all the small fixes, cleans the roof and sidewalks. He’s getting old now and we as family have talked to him about if he should continue on maintaining the building. I’m the only one out my siblings who helps my dad and sees what he goes through in taking care of it. My parents have mention about selling it. But if they don’t, I would like to consider taking it over for my dad. Since it’s an income for my parents and I think it’s a good investment to keep in our family even though it’s an old building. I was thinking to make this property more business oriented and make it into an LLC. 

So there is this reoccurring problem with the plumbing in the tattoo shop. Their sink and toilet often gets clogged. Usually a plumber is there once a month. Just last week the plumber came to snake the pipes, which costed around $400. Now the plumber is coming back again tomorrow to do the same thing. 

My dad has mentioned since last year that he wanted to evict the tenants of the tattoo shop. Since they don’t have a contract together, he could make them leave and would finally be able to fix the plumbing issue. Because they would have to tear the floor up in the unit and the main pipe line is in the tattoo shop according to my dad. 

Today I randomly joined my dad to go and talk to the tenant about the plumbing. They mentioned that they think it might be the Mexican store next door. Because when they had set up shop and remodeled the space for a market, they messed the piping up. Now the tattoo shop is suffering from their mess, since that problem never occurred since the market moved in next door. He also stated that there is food every time the plumber comes snakes it(told my father to ask the plumber tomorrow to verify if this is true).

After a little small talk about the issue. My dad out of nowhere told them that he was planning to have them leave soon so we can fix the plumbing issue for the whole building. Obviously they got upset saying how it is immoral of my pops to kick them out (they’ve been there for 20 years). Going to get lawyers involved. Then accusing my dad that he was going to rent it to the tenant of the Mexican/ice cream store. Honestly felt bad/awkward when the whole thing went down. But at the end of the day its my parents property and my dad just wants to get that issue fixed.

Anyways, after seeing that I don’t know if my dad handled it the right way. It just didn’t seem organized on how he went about it. He also said that when he wanted to evict them that he was going 
1. fix the plumbing issue 
2. use it as storage/office for our store.

When we left I told him he shouldn’t have told them about your plans after. He should’ve just made it about the plumbing nothing else. Personally I didn’t want him to share his business just so they won’t use it against him.  

I’m not experienced in this stuff that is why I’m here seeking advice in both running a commercial real estate business/investment(books/websites) and what to do about the tenant. Or sharing an experience similar to this as I would be interested in reading. Thanks again!

TLDR: Family owns commercial building. Would like to take over one day but need/seeking experience. Problem with plumbing in one of the units. Dad told tenant he wants them to get out so he can fix the plumbing issue and use the space for our own business. Don’t know if he handled right, recommendations on how to proceed after that.
[{"id": "eq985n4", "text": "I won\u2019t go into lease structures etc since I\u2019m not so familiar with US/CA lease laws etc.\n\nBut my first reaction reading your post is to check if the restaurant has a grease separator/trap. If not, then that\u2019s most likely the root of the problem and def. a fixable issue. When people build new restaurants and try to keep the investment low, that\u2019s something that often gets overlooked with not-so-great problems for the plumbing in the long run.\n\nEdit: read Mexican restaurant, my English skills are obviously sub-par, sorry! \ud83d\ude09 disregard my comment", "replies": [{"id": "eqa1p0v", "text": "Thanks you for advice! I will ask my dad to check if they have one.", "replies": [], "depth": 2}], "depth": 1}, {"id": "eq9g3g3", "text": "Honestly sounds to me like you need a new plumber.\n\nIf that plumber cannot properly diagnose the issue then you need one that can.\n\nPay a plumber to find and report on the issue. I dont think I would be evecting tenants over what's really an unknown", "replies": [{"id": "eq9ze1h", "text": "Yeah I\u2019m hoping to hear an explanation today. I thinking to have my dad do a full a diagnosis of the plumbing for the whole building? Thanks!", "replies": [], "depth": 2}], "depth": 1}, {"id": "eq9jo3z", "text": "Ask the restaurant for the service ticket from their last grease trap service. \n\nI\u2019m willing to bet unless it\u2019s a large chain restaurant the answer will be one of the following:\n1. We do it ourselves (red flag)\n2. We don\u2019t have anyone maintain it (red flag)\n3. They will lie about it (red flag)\n\nCheck their lease for maintenance requirements, many times you can take care of things if they don\u2019t and bill them back for it. These systems need varying amounts of maintenance depending on the volume and type of food being prepared. \n\nDon\u2019t forget checking the market and ice cream shop, too. Any place that washes or prepares food cause plumbing issues.\n\nIn all honesty a Tattoo shop doesn\u2019t generate anything that would clog pipes on a recurring basis. \n\n\nAside from the plumbing problem, are there any other problems with the tattoo shop? Have you approached them about entering into a lease? If they have been there for 20 years, there is a good chance they will be there for another 5. Try locking them into a lease and add value to the building.", "replies": [{"id": "eqa1kqn", "text": "Hey thank you for reading and advice! I\u2019ll check in to see if they have a  grease trap service. Another user commented to see if they even have one so this will be a priority.\n\nThe market our family owns had a little plumbing issue but not often. The Mexican market &amp; ice cream shop have been the the most recent re-model. The market was about 13 years and ice cream 2 years ago. But they\u2019ve never had reoccurring issues with the plumbing unlike the tattoo shop.\n\nI thought the same thing about the shop. They keep it very well maintained, it\u2019s just their plumbing is messed up. They have no agreement with my father, it\u2019s just month to month that started this year. I\u2019m thinking the same thing about just keeping them for there for income. At least have them shut operations down in order to fix the plumbing. But my father wants to use that space as an office/storage because our unit is very small.", "replies": [{"id": "eqc4h1i", "text": "Before doing anything crazy, Find a plumber to camera the main. It will cost a few hundred bucks, but it will document the plumbing system and give you a visual of actual conditions. It will show blockages, debris, pipe condition, low spots, etc. It\u2019s possible (and likely) the problem is in main for the center, not their units plumbing. There\u2019s probably something near their tie in and everything happens to stop up there.\n\nKeep in mind If the problem is in the main, every tenant in the center could be impacted.\n\nBarring a fire, major flood, building collapse, etc., you never want to shut a tenant down for repairs. There is no need too. Any competent plumbing outfit will have no problem making the repairs after hours, although you can expect to pay a labor premium for an off shift. \n\nSee photos below of an underground pipe repair due to grease we did in a building. This repair took two days. The tenant was not impacted at any time during this work.\n\nDay 1: break up floor, expose problem, get materials, repair pipes.\n\nDay 2: fill hole and finish with concrete\n\n\nhttps://imgur.com/gallery/NKkpGgB", "replies": [{"id": "eqej089", "text": "Thanks for the feedback! Ill bring that idea up  to my dad. Appreciate the explanation and pics.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "eq9jyzc", "text": "You should check the leases, but retail leases are typically NNN, so this plumbing issue should be fixed by the tenants themselves.", "replies": [{"id": "eq9r6xk", "text": "That\u2019s what I was thinking.  And kicking a tenant out is not a fix to a plumbing problem. OP needs to read read all the leases carefully. Find out exactly what the plumbing issue is and what it will take to permanently fix the issue, go to his cities planning and zoning or building inspections dept to find out what can be done to repair buildings.  Not sure an llc is necessary but probably needs to be put in trust, or deed on death if parents are going to give property to him. \n\nIf leases are not NNN then they need to be updated as they expire.  Poster needs to find current market rates and see if they are maximizing (or at least not well below market) rents. \n\nAt least Pops is an involved owner and is trying to maintain his property. Many people think land lording is buying a piece of property and watch the money roll in. It\u2019s work, and can often times be unpleasant. But with hard work, proper planning, and the right attitude it can be incredibly rewarding both personally and financially.", "replies": [{"id": "eqa75lh", "text": "Thank you for advice! I think the reason my dad wants them leave is because the the main pipeline runs in their unit. But again I\u2019m not sure I\u2019m just starting to learn about all this stuff. But I do want my parents to get everything checked but you recommended that the city check it as well. I\u2019ll have to ask my dad if he\u2019s done that already. Also do research about the market rent in the area. Appreciate your input! You mentioned about planning, that\u2019s is why I would like to take over for my parents or at least give input on that end. I think that would help them out greatly! Thanks again!", "replies": [{"id": "eqajdco", "text": "Hopefully some of my advice is useful (lol). As far as city goes, they will not examine your building unless you are pulling permits or for your annual fire inspection. But, you should check with the Planning and Zoning dept and explain you have a 100 year old building and would like to know what restrictions (if any) to refurbishing the building besides the usual things like major plumbing electrical HVAC work", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "eqa4yd8", "text": "I\u2019ll have to check. I\u2019m not to familiar with the terms which I why I want to learn more about real estate. But my parents kinda kept my siblings and I in the dark with their business affairs. Which I\u2019m trying to learn now so it will benefit in the long run. But from what I\u2019m aware their contract ended the beginning of 2019 so they\u2019re paying month to month.", "replies": [{"id": "eqgy2zf", "text": "To be honest, this is not a city issue. Don\u2019t waste your time.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "eq9vwhs", "text": "Removing a paying tenant to use the space as storage makes no sense.\n\nYou need to ask your father about his goals with the property. Does he want to use this as his retirement/pension? If so, he needs to run it like a business.\n\nYes, get the LLC set up ASAP, imo.\n\nIANAL", "replies": [{"id": "eqa4chn", "text": "Our family owns the the other market in the building. The previous tenant was going to go out of business but my cousin bought him out with an investment from my parents as well. \n\nThe grocery store is doing well since she took over. But the space is getting crowded because of the new refrigerators and adding new products. \n\nThat\u2019s why he was looking to occupy the unit of the tattoo space. To make it an office/storage for our family business. But I do have to ask him what his goals are with the property and if he will be charging  my cousin rent for the space. Personally, I would rather just have someone else occupy the space with making a new contract and stuff. But the main thing fixing the plumbing too.  \n\nThanks again for your help!", "replies": [], "depth": 2}], "depth": 1}, {"id": "era4833", "text": "Hey! I\u2019m also wanting to lease my gas station out, this is my first ever time doing this and I\u2019d like as much tips and advice as I can get from someone who has experience as possible. Do we go through a real estate agent? Etc. thanks!", "replies": [], "depth": 1}]