In the grand scheme of being a Landlord, there are few things more painful than an eviction.
No Landlord wants them.
But, if you do this long enough, you’ll almost certainly have to evict a Tenant.
At T&H Realty, we evict less than 1% of the Tenants we place.
Unfortunately, in spite of our best efforts and in spite of extreme Tenant screening, evictions are a harsh reality of being a Landlord.
Because as we all know, life happens: Divorce, job loss, illness ,etc.
Evictions, as you might guess, require significant care from our team, and we are prepared to communicate with you heavily until the situation is resolved.
Rest assured that we’re here to expedite the process, and get your property re-rented as quickly as possible.
Below is a basic guide to how we handle evictions for our Clients.
Failure to Pay Rent
While there are several reasons an eviction may be necessary, the most common scenario is non-payment of rent.
We discussed our rent collection process in detail in a previous blog, and we encourage you to review that process.
In almost all cases, Tenants will respond to our collection efforts, make their payment, and avoid an eviction filing.
However, when we’ve exhausted all reasonable efforts to collect rent, filing eviction is imperative. As we tell our Clients, filing an eviction will force an action.
The first order of business is to gain possession of your real estate and, as you should well know, there’s a legal process in order to do that.
The typical cost for filing an eviction, and for an attorney to attend the hearing, is somewhere around $500-$750. Please keep in mind that these costs can vary.
Once the eviction has been filed, the attorney will inform us when the court date has been scheduled. It usually takes 3-4 weeks for this date to be determined. Additional times is obviously required for the actual hearing to take place.
Collection by Eviction
In a high percentage of cases, the Tenant will pay in full before the court date.
So, that $1,200 that couldn’t be paid until the 25th, mysteriously ends up in our Office three days after the Tenant is served the eviction notice.
This collection by eviction method works.
It works really well.
Once the Tenant knows we’re serious, their priorities change and our squeaky wheel gets the grease.
Note: Once we’ve instructed our attorney to file eviction, there will be legals fees and court costs involved, even if the Tenant pays prior to the court date or, in some cases, before the possession date that’s awarded during the hearing.
Also note that all costs are added to the Tenant’s ledger so you can be reimbursed.
Tenants Vacate before Court Date
In some cases, the Tenant will vacate the property once an eviction is filed, which can save you the expense of our Attorney attending the possession hearing and expedites our efforts to re-rent the home.
If the Tenant vacates prior to a hearing, and we have assessed all damages and processed the security deposit, we will reach out to you and discuss any available collection options.
In order to determine if the Tenant is still residing in the home, we will reach out 7 days prior to the hearing. If we cannot make contact with them, we will send out a Property Manager to do a “5-Day Occupancy Check”.
*Please note that actual Attorney fees may vary, depending on the time required and the complexity of the case.*
The Court Date
If the Tenant fails to pay in full or fails to vacate, we will attend the hearing. Sometimes the Tenant shows up, most of the time they don’t.
These hearings are basically “admit or deny” scenarios and it’s extremely rare if we aren’t granted possession.
Assuming all goes well at the hearing, you should be granted possession of the real estate. We always ask for possession within 7 days of the court date. Judges generally will either accept that, or award possession within 2-3 weeks.
In some cases, if Tenants ask for additional time to vacate, the judge may rule in their favor, and provide as many as 30 days to vacate.
What if the Tenant Refuses to Leave?
In some rare cases, the Tenants do not vacate the home in spite of the court order. If this occurs, we will have to do a Forced Move-Out.
Even evicted Tenants have rights, so it’s a little more complicated than just throwing their stuff on the curb and changing the locks.
There is a systemic and legal process that must be followed in order to remove them from your property, and unfortunately, it’s more expensive, too.
If we must proceed with a forced move-out, we will likely need a financial contribution from you.
But as I said before, this is not common.
When we have possession of the property, the next step is to determine damages to the home. Obviously, lost rent, until we re-rent the home (or the evicted Tenant’s lease ends) are figured into your damages.
We will also walk the home and provide you a detailed list of items needed to get the home in rent-ready shape. It’s important to note what is Tenant damage and what is considered normal wear and tear. All Tenant damage items will be added to the Tenant’s lease ledger.
T&H Realty’s Collections Process
When all damages are calculated, we are required to send the Tenant a 45-day letter, noting all charges. The letter provides the Tenant 10 days to pay the outstanding balance.
If the Tenant fails to pay the balance, and we feel like you have a good chance to collect the debt, we will encourage you to proceed with a damages hearing and obtain a judgment. In some cases, we may need a financial contribution from you to begin the damages process.
Keep in mind that most judges allow Attorney fees to be added to judgments.
There are a couple of key questions that should be answered prior to proceeding with a damages hearing:
- Is the amount owed worth pursuing? A claim will generally cost somewhere between $500-$1,000, which includes the filing fees and attorney representation. Also keep in mind that, after a judgment is obtained, a collection company will likely keep 35% of the funds collected as its fee.
- Is the Tenant collectible? If the Tenant currently isn’t working, for example, receiving any payment on a judgment might be difficult.
We will advise you accordingly…
- Under $250 – No action.
- Greater than $250 but less than $3,000 – Proceed with demand letter from a collection company we utilize and, if necessary, transfer to contingency-based collection. This action will also result in the debt being placed on their credit report.
- Greater than $3,000 – We recommend proceeding with the damages hearing and getting the judgment.
Once a judgment is awarded, we will send the judgment to our local collection company. This company offers very competitive rates and works on a contingency basis, meaning there is no cost unless money is collected.
We will manage the entire collection process for you, retaining a management fee of whatever money is collected, and depositing the balance into your account.
Eviction Protection Plan
Since evictions are obviously such a pain point for so many investors, we offer an Eviction Protection Plan (EPP) to all our Clients. This plan is an added service we offer our Clients as a means of mitigating some of the financial burden in case of an eviction.
The goal is to provide Owners with peace of mind knowing they don’t have to stress about the costs of an unexpected eviction.
Any Client is eligible for this added service as long as the Tenant in question is one that T&H has placed. Inherited Tenants are not covered under this program.
Of course, we all hope that you never have to deal with an eviction, and with our rates being so low, you more than likely won’t have to. But hopefully it gives you comfort to know that we have the experience and protocols in place to protect you and your assets should it come to that.
In addition, if we ever have to evict any Tenant that we placed, during the first six month’s of residency, we will re-lease the home at no charge. This is a guarantee we offer all Clients.