Real estate can be a great investment! It is great to see that market values go up over time. It is great to see rents coming in which pays down your mortgage and may give you some cash flow. However, every so often having residents that don't pay rent can be part of the process of owning a rental property and this needs to be addressed. The reality is that the income produced by a property is tied to a resident and their financial stability and their circumstances may change. Knowing the process of regaining possession is key, which includes The Eviction Process.
GOAL
When it comes to your rental property, it's important to be clear about the end goal. If we take a look at the eviction process, the ultimate goal is obtaining possession of the property. Therefore, when it comes to negotiating before the eviction, there are two key items of value: Possession & Rent. Of these, possession is the most important one as with possession of the property you are in control of being able to start the process to sell or continue getting it rent-ready for another qualified applicant that can pay rent. Some owners lose sight of this and only focus on the rent component. As great as rent is, rent is tied to a resident, which may or may not be in a position to continue paying on a timely basis. Therefore, obtaining possession is key. With this in mind, we suggest making the resident a strong offer to… Let Them Out of the Lease Without Recourse. But Jeffrey… I'm entitled to the money that they owe me! Yes, that is true. However, how good has it been if we find ourselves in this situation? And… currently there be no end in sight of the resident returning possession of the property! If presented properly, letting the resident out of the lease gives them several benefits that may entice them to move out sooner of their own making. Here are some things to consider:
Possession: If the resident knows that they're being let out of the lease, this may facilitate having them give possession if they are able to find something they can move to sooner such as moving into a lower-cost housing situation or moving in with friends or family.
Rent Obligation: The lease technically allows the owner to pursue for the lease duration. We recommend owners not pursuing any rent obligation past the date that a resident provides possession. This still keeps the pressure to have them move out as soon as possible, as the rent charges keep accruing up to their move out date.
No Eviction: If they provide possession then it doesn't go through the eviction process. This helps eliminate having an eviction on record! For most residents, this is a major benefit, which pushes them to make the best effort in returning possession as quickly as possible.
In our experience, having an owner regain possession of the property as quickly as possible is the best win-win situation they can possibly experience. An important thing to note is that once an owner Files and Serves the Summons & Complaint for (see Step Three below), they are not allowed to accept any rent during the duration of the eviction process, or else it nullifies the process and an owner would have to start all over again.
RESIDENT COMMUNICATION
A big part in getting to a win-win outcome is maintaining open communication with the resident. While the information being conveyed to them may not be pleasant, a key is having it done cordially to maintain open communication. So long as the resident is communicating and returning voicemails, text messages, and emails, then progress can be made. However, there are individuals where, past a certain checkpoint, they will stop engaging. If and when this happens, we do suggest initiating the eviction process right away, as more time will not change their behavior and we have to assume that they will continue not communicating. In these instances, going all the way through the eviction process is the best course of action.
HOW MUCH DOES IT COST?
This is a great question and there are two categories: A) Court costs… and B) Attorney costs. In general, eviction costs are owner responsibility, and the court costs will vary depending on what district would handle the eviction. In addition, attorney costs will vary depending on the firm being retained. A major factor that will determine how much may be charged is if a case is won by default or trial (see Step Four below). Attorneys, for the most part, will charge an upfront retainer to open up a case and bill as the case progresses. Retainers can range anywhere between $2,000 to $3,000, depending on the firm.
HOW LONG DOES IT TAKE?
It's hard to tell. This depends on a lot of factors such as how backed up the courts may be but, in our experience, it will depend mainly on the resident's personality. Some residents will move out right away the moment they realize the eviction has formally been filed as they do not want to have an eviction on record. Others will put up a fight and claim anything to delay the inevitable process and therefore could have it take six months or more.
EVICTION PROCESS
Even with the best of intentions and taking the above approach of letting the resident out of the lease, you may still find yourself having a resident that's not moving out. At that point, initiating the eviction is key. The following are the six steps in The Eviction Process.
STEP ONE: Post the Three-Day Notice
We will prepare a three-day notice to pay rent or quit and post it on the property.
STEP TWO: Conduct the Initial Legal Review
While most of the time owners will find themselves initiating an eviction because of non-payment of rent, it is possible that the reason for the eviction is something outside of rent. Whether rent or otherwise, during this step it is advised to initiate the conversation with the attorney's office and bring them up to speed on the situation. They will be best to advise if anything in particular is needed, or if they see any challenges with the eviction process as they are the ones representing the owner in court. This is where the attorney gets hired and the retainer paid.
STEP THREE: File & Serve the Summons & Complaint for Unlawful Detainer
The attorney's office will file the lawsuit with the court, also known as Eviction, and serve the Summons & Complaint document to the resident. This is the formal document that lets the resident know that the eviction has been filed with the court. After, we wait to hear from the court as to the trial date.
STEP FOUR: Obtain Judgement by Default or Trial
Once the court date is scheduled, the attorney and us (the management company, rep) will appear. One of two things will happen A) the resident will not show up or they show up and do not contest it. If so, we win by default. Or B) if they show up and contest it, then another date is scheduled for the judge to hear why they are contesting the case. If we win by default, we will proceed to Step Five. If it does go to trial, the assumption is that we will win at that checkpoint and then proceed to Step Five.
STEP FIVE: Issue Writ of Possession
Once the judge has stated that you've won the case, they will need to issue the Writ of Possession. This is a document that allows you to regain possession of the property.
STEP SIX: Submit the Writ of Possession to Sheriff for Lock Out
The writ of possession is the document that the sheriff's office needs so they can proceed to schedule a lockout. Residents have legal rights to properties while they are in residency. However, the moment that they lose in court they are considered to be trespassing. During the lockout, the sheriff proceeds to physically remove them from the property. Best practices are to have a locksmith or other vendor that can replace the locks so that the property can be secured after the resident has moved out. The sheriff will enter the property and physically remove anybody that may be inside the unit. It is important to note that most of the time, residents will vacate the unit prior to the actual lockout, as very few stay up to that moment.
TASKS
An attorney will be running point with the court as well as preparing and filing the proper documentation. As a property manager, we will act as the liaison to provide the attorney's office with all the needed documentation that they will need. In addition, we can attend the court on an owner's behalf.
CONCLUSION
It is my sincerest desire that you never experience an eviction. These can be an emotional and financial drain. However, following the above recommended plan will ensure that you regain possession of your property as quickly as possible.
