This will prepare you to deal with eviction, and better yet, help you avoid it altogether.
Even the word sends a chill up the spine of a property owner. Costs associated with evictions can soon run into the thousands of dollars, bringing the profitability of the managed property quickly into the red zone of unprofitability.
Not only is eviction costly, but it's time-consuming. The adage that time is money is doubly true for rental properties that are vacant or not bringing income in because the tenant had defaulted.Expect the time required to evict a delinquent tenant to double if the legal system becomes involvedin settling the disputes.
Eviction is a drastic measure and one that is specifically addressed by laws in every state. State laws detail requirements landlords must meet to end a tenancy. Depending on the situation, various forms of notice are required to terminate a tenant's occupancy of your property. Most rules include guidelines on how to write and deliver eviction papers.
Some states require the tenant to have full access to the property during the eviction process. They won't even allow landlords to cut off utilities or change locks to protect their property from delinquent renters. In these states, tenants have more rights than the owner! Even worse, any action the landlord takes that interfere with the tenant's occupancy could become money awarded as damages to the tenant.
Needless to say, an attorney with experience in property management is a wise investment in states like these.
This guide will prepare you to deal with eviction, and better yet, help you avoid it altogether. There are some obvious things you should do to lessen your risk in properties you manage.
The most important measure against eviction risk is a strong lease agreement.
Before allowing a tenant access to the property, make sure you have a signed lease that addresses specifics on how and when rent is to be paid. It should also clarify the tenant's responsibility to maintain the property, from cleaning the floors and mowing the lawn to avoiding criminal activity. Once again, it could be in your best interest to have an attorney with knowledge of real estate law draw up your lease agreement. That way, you can be certain it complies with applicable local and state regulations.
Once you have a legally binding lease agreement, your worries are halved.
The second most important measure is inspections.
Include the frequency of inspections in the lease. Keeping an eye on the state of your property mid-lease can be tricky, but you can still find a way around it. Specify in the lease agreement how often you have to inspect the property. Once, twice, or thrice a year will be good enough, particularly for maintenance checks.
Still, it's vital to keep a record of rent payments. If you ever go to court, you'll need to present the proof of unpaid rent to settle the matter. Document any conversations regarding past-due payments -such as screenshots of email or e-payment records-that prove you've done due diligence in collecting rent according to the lease agreement terms.
Once your renter defaults, it's time for a face-to-face meeting. Discussing serious matters in person leads to a dialogue and creates the means for a positive resolution. Perhaps they're facing an unexpected hardship (like unemployment or medical bills) and need a payment plan or to "work off" some of the debt.
A professional, in-person meeting provides an opportunity to reconcile, come to new terms, and, most importantly, avoid a costly and lengthy court battle.
No one wants to suffer through eviction. It's best to be prepared for the worst while hoping your tenants are the type who pay rent on time while keeping the place clean and well-maintained.
Reasons to Evict a Tenant
Failure to Pay Rent
In most states, landlords can evict a tenant for non-payment of rent as well as for habitually late rent payments on their record. This may vary from state to state, so it's important to be sure what the rules are in your state. Landlords should outline a late rent policy in their contracts and be clear about any grace periods allowed for rent payments.
Violation of Lease
If a tenant has violated the terms of their lease, the landlord is within their rights to evict them. Violations can include violating a no-pets policy, subletting the property to occupants, or failure to abide by policies listed by an HOA.
Damage to the Property
Normal wear and tear happens, this much is true. Dirty carpets, holes in the wall from frames, etc., are not uncommon. However, if the damage goes beyond the norm, such as major scuffs, broken glass, and scratched floors, landlords can take matters into their own hands. However, if the tenant damages the property in a major way, such as water damage or a hole in the wall, and they offer to pay for repairs, this can be something that can keep them in good standing with landlords.
Using Property for Illegal Activities
A tenant can more than absolutely be instantly evicted if they are using their space for illegal activity. While this includes tenants who are distributing substances out of the property, such as illegal drugs or other contraband, it also includes operating a business unlawfully. The reason for this is because a business being operated from the property is a violation of the rental agreement signed when the tenant moved in, as well as their insurance policy.
It helps to bring this violation to the tenant's attention and give them anywhere between 24-48 hours to terminate their business or face eviction. If, however, it's found that the tenant is performing illegal activities, such as selling drugs or other illegal trafficking, they need to be evicted immediately and authorities should be contacted
The lease has expired, Landlord doesn't want to renew it and tenants have not vacated the property
The good news is that you don't need to renew the lease with bad tenants as the law allows landlords to get their property vacated at the end of the lease. In fact, when the lease has expired, the landlords don't even need to give a reason to renters for getting them evicted.
WHAT YOU DIDN'T KNOW ABOUT EVICTIONS
Evictions are unfortunate and costly for everyone involved. They are long, expensive
and frustrating. Whether you are evicting because of late payments or damage to the property, there are a few things you should know. Why people get evicted, how evictions work, how much evictions cost, and how to avoid these nightmare tenants.
What are absolute reasons for eviction?
If you find out that your tenant has committed crimes, for example, it is your responsibility to notify the police and file for eviction. If you fail to evict a tenant for any criminal activity you could be implicated in the crime yourself. Just one of the following reasons may be grounds for an eviction:
Are all evictions the same?
The laws surrounding eviction vary from county to county and/or state to state, though some generalizations can be made about how the process works. The eviction notice is served either in person, standard mail, certified mail or by a process server.
Once notice has been given, the tenant must vacate themselves and belongings by the agreed date. If the tenant is not out by the agreed date do NOT touch their belongings in the house. You have to wait the specified period of time by law, depending on the jurisdiction, if they have not moved by then you have to file an eviction notice. Once there has been a ruling by the judge in favor of the landlord, the landlord can utilize the local law enforcement to physically evict the tenant in question.
How much does eviction cost the landlord?
In theory, an eviction is simple; you are seeing a profit loss from failed payments or needed repairs to the property. You evict the tenant, keep their deposit to recoup your losses, and then go your separate ways. Unfortunately, this is not how evictions play out in the real world. Tenants become vicious, damaging the property, stealing whatever they can, and making your life miserable. Depending on how long the process of removing them legally takes, the lost rent, and the damage to the property all can far exceed the standard cost of an eviction. According to TransUnion, the cost of evicting your tenant can be anywhere between $3,500-$10,000. This is simply an unthinkable amount of lost income, expenses and time. Doing everything in your power to avoid these kinds of tenants is so important.
Unfortunately, landlords are forced to evict a tenant at some point. While some tenants may fall on hard times and have foreseen circumstances, other tenants make a habit of learning the eviction process so they can use it against you. Due to tenant rights and eviction laws it's not easy, is usually drawn out, and can quickly turn into a nightmare…. All at your expense as the landlord.
Beware Tenant Scam:
Paying partial rent after the due date is a SCAM… Here's how.
Tenants will often give you their story of unforeseen circumstances when the rent is due. They will offer to pay a portion of the rent with no intention of paying you the rest. This is the beginning of a long 2-3 months, and is called, The Eviction Process!! Yes, this is a nightmare for landlords, property managers, and property owners who depend on income from their investment properties.
"But I want to help them out" says the landlord…
When you accept partial payments, you have just accepted rent for that month. Now the tenant will live in the property for the rest of that month. You will then add on your late charges, the remaining amount for last month, and the current month's rent. At this time they have not paid again, or they may try to give you another partial payment because they know you're "wanting to help them out" at this point.
If you accept you continue to drag the process on longer. At the time you finally stop accepting partial payments, now you begin to evict. You will need to file a 3 day notice and must prove they received it. Tenants will take these down, throw them away, etc; it's always best to have a police officer serve the 3 day notice… Yes, at your expense Mr/Mrs Landlord. Let's hope your case is heard within 21-25 days. You're now at the 3 month mark with hardly any income on the property; if and when you are awarded possession you can now begin the cleanup process. If they were evicted, it's not going to look pretty.
Are you the next unsuspecting landlord?