he didn't say they are squatters and I also don't think it's the same situation, except the end result of you going to court.
I'd treat it the same as an oral lease. if they can pay and you want them to pay, get them to sign your lease and move forward.
If you want them out, give notice to move. if they don't do so, follow your state's laws regarding oral leases ... which I would imagine time frames and notices follow your state's statutes since there is nothing in writing.