[quote jimmyle]A coworker of mine rented a house to this guy. He is so busy that he let’s his real estate manager handles his renting application process. He paid rent the first month and then complained about roaches. The next month he stopped paying saying that his checkbook was stolen and somebody broke in the house. [/quote]Should have threatened to pull the plug right there. ‘Should have told him to go get a tellers check, give them 3 days.

[quote jimmyle]He said he would pay everything next month when he gets his bonus check.[/quote] Why would he need the ‘bonus’ check to pay, if he could afford the rent? This is a red flag.

[quote jimmyle]After some research, my coworker found out that his real estate manager is really his sister (with different last name) and she is living there not him.[/quote] This is not really an issue, unless the lease or rental agreement prevents one person from paying the rent for another (different than a sub-let).

[quote jimmyle]And she has done the same thing to the previous landlord. [/quote]This is an important item to get proof on. Shows a pattern of fraudulent behavior.

[quote jimmyle]Before going to court, this guy filed a complain saying the house is full of roaches, the water heater doesn’t work, and there is mold in the house which caused him to be sick and he had the doctor signed a few documents which looked fake but the attorney again said we can’t really investigate into the authenticity of the documents because of privacy laws.[/quote]You can use this as justification for ‘permission to enter’ to inspect for mold and condition of water heater as well as do proper repairs if needed. It will also allow you to see who is really living there. I believe that a 1 week notice is required. It would be useful if you have pictures of before rented/leased condition. If there is damage, take pictures of the damage or current condition of supposed mold area and water heater.
http://real-estate-law.freeadvice.com/landlord_tenant/security_deposit_privacy.htm

By the way, it is important if the agreement is a month to month or lease. The landlord has more eviction rights under a month to month because the term of the rental is 1 month, with the payment ‘sealing’ the deal for one month. If there is no payment, there is no rental agreement.