CHAPTER
13

Renter Arguments, Evictions, and Vacancies

In This Chapter

We’d love to tell you everything will run smoothly with your rental property at all times. But you will encounter problems along the way. You’ll have bad tenants, and even your good tenants will have bad days. And eventually, your tenants will move out and you’ll have to start the process of filling your property over again. None of this is a big deal if you know what to do and you’re prepared in advance.

In this chapter, we help you stay in control of what’s going on with your tenant. Arguments, evictions, and vacancies happen all the time, but if you plan for them and put together a plan of action for each scenario, the time and worry you spend fixing these issues when they occur will be significantly shorter. You’ll have a shorter vacancy time and, if it happens, a shorter time in court dealing with an eviction. As a result, you’ll get back to your main goal—making money.

The Hatfields and the McCoys

The best way to avoid disputes with your tenant, or between your tenants, is to establish firm ground rules and outline these rules and policies in your rental documents.

Before signing, the tenants should thoroughly read through the documents, discuss them with you, and express any concerns or questions they might have about them before they move in. When a tenant asks a question, answer it directly and as quickly as possible.

If the applicant doesn’t speak English, find an interpreter to communicate the lease details. Be sure the interpreter signs the lease as proof that the document was properly communicated to the tenant.

When the questions have been answered and the lease has been signed, the tenant should get a copy for future reference. Keep the original documents filed away for your records.

Even if you clarify points in the rental documents with the new tenant, sometimes disputes still happen. Whatever it is, it’s extremely important to keep a level head and not get overly emotional. You’re running a business and need to make business decisions that keep your customers—your tenants—happy.

Tenant Complaints

When tenants contact you with a complaint, listen. Understand what they’re saying and where they’re coming from. Tenants commonly dispute whether the security deposit will be returned and how much. They also commonly dispute how much wear and tear you think they caused to the property.

RENTAL REMINDER

You can avoid wear-and-tear disputes by doing pre- and post-rental video inspections. Be sure the video contains a time and date stamp to verify when it was taken.

Remember that some complaints you can’t solve. For example, your tenant complains about the noise outside their downtown condo, but there’s nothing you can do about that. Just listen and let them know you sympathize, but you can’t actually do anything to change the noise outside. Maybe you can provide them with some suggestions on how to diminish the noise, like noise-reducing draperies your tenants can hang on the wall to muffle the sound.

Other complaints you need to address immediately. Take action right away if any tenant complains about something that can cause his or her home to become unsafe. If tenants complain that a stair is broken or a railing is very loose, you must fix that immediately, before you go to bed that same night. The last thing you need is to put it off and have a tenant suffer an injury.

If you can’t address the issue on your own right away, contact your maintenance person to take care of it straight away. Then have your tenant notify you when the repair has been completed and he or she is satisfied with the results.

Some tenants use complaints to take advantage. As unbelievable as it might sound, tenants might bring in a jar of bugs, release them in the rental property, and complain that the unit is infested. They might demand monetary compensation for their discomfort or they won’t pay their rent until the problem is solved.

Don’t let a tenant take advantage of you. In a situation like this, having documentation that the property is maintained by a pest control company will help. In some cases, it just might be in your best interest to let the tenant out of the lease and move on to a better one.

Landlord Complaints

What if the dispute is yours? What if your tenant likes to play loud music early in the morning and you receive numerous complaints from other neighbors? Or what if your tenant constantly cooks cuisine that emits odors your other tenants don’t like?

You need to talk to your tenant about these complaints, but these issues might be more difficult to solve because there’s not always a legal solution to back you up.

Start by discussing the issue with your tenant, and follow up the conversation with a written warning. Set specific timelines and consequences if the complaints have not been corrected. Also, know your legal rights or talk to your attorney, who can follow up with another written warning.

On issues like these, each state regulates what steps you need to follow to evict a tenant. If nothing helps, you might need to take the tenant to court if there’s a legal reason you can get him or her to stop. Your main responsibility is to document all the details in writing and connect with a real estate attorney to get you through the process.

Housing and Building Code

A building code is a set of legal rules and guidelines that specify the minimum standards of how a building should be built and maintained to make it safe. Building codes generally deal with construction, electrical, and mechanical aspects of the property. If you renovate a building, and the renovation is extensive enough, you’re required to obtain a building permit from the city to ensure your project adheres to the current building codes. In addition, a building inspector needs to inspect your project and give you a certificate verifying that the property meets the legal standards.

In addition, there may be other codes you need to follow, including fire and health codes. Fire codes deal with safety issues and fire prevention for the building. Health codes deal with health-related aspects of the property, such as sanitary issues.

RENTAL REMINDER

Schedule an annual property inspection with the fire marshal. He or she will complete a general inspection and test all smoke detectors. Some fire marshals have a form for you and the tenant to sign confirming that all detectors are in working order.

Code Complaints

If tenants aren’t happy with how you handle a complaint, they might report you to the local housing and building code officials. These complaints typically have to do with specific living conditions, such as cracks in plaster, chipping paint, broken gutters, peeling wallpaper, a torn or missing screen, or a number of other conditions.

If a tenant files a legitimate housing-code violation against you and the official finds that the violation exists, you are given a period of time to fix the issue. Make the necessary repairs immediately, and take photos to document the completed work. If you fail to address the violation, you could face a fine or a possible prison term.

It’s possible a tenant could file a claim about a building code violation that’s incorrect or doesn’t apply to you. The latter could be the case if your property is older and is grandfathered in on the codes. In cases like this, if a complaint is filed, you need to file an appeal to avoid paying a fine.

There are no grandfather clauses for fire codes. Your property must always be kept up-to-date on any improvements needed to meet the current fire codes.

But just because you’re appealing an order from a housing official to fix a code violation, you’re not exempt from making the repair. It’s in your best interest to always make repairs in a timely fashion.

Retaliation Laws

Many states have laws that protect tenants who make a complaint against their landlord. These are referred to as retaliation laws and protect the tenant from any act of retaliation from a landlord in response to the tenant filing a complaint.

As a landlord, you cannot file for an eviction, remove certain services, or attempt to implement an unreasonable and significant rent increase after a tenant has complained about unsafe or illegal living conditions, filed a complaint with you or a government agency, joined or organized a tenant organization, or exercised a legal right allowed by your state or local law, such as withholding the rent for an uninhabitable unit.

Remember, more laws protect your tenant than protect you. You have to look out for yourself. That starts with getting to know your state’s landlord retaliation laws.

Courtroom Battles

The best way to avoid courtroom battles with your tenant is to adhere to the guidelines in this book. Screen and select the best tenant to avoid “professional tenants.” A professional tenant is someone who knows how to work the system and take advantage of select protections in the law to live rent free. Say you own a property that’s a corporate rental and the company pays the rent for the employee. A professional tenant finds fault with the property to get cash back from you while the company still pays full rent.

However, sometimes you’ll battle with your tenant and may, unfortunately, find yourself in court. If it’s gone this far, you need to be prepared. We can’t emphasize enough the importance of keeping all written communication between you and your tenants, copies of any important signed documents, and any before-and-after photos. This is where that material comes in handy. Bring this and any other useful documentation to court with you, and you’ll be prepared to present a solid case.

WATCH OUT

In some states, tenants can sue a landlord for damages equal to double the amount of their rent if a code violation is not corrected within the appropriate time given by the state.

Having the right team members to help you with your rental property comes in handy here, too. By now, you should have an attorney on your team whom you trust and who is knowledgeable in real estate law and landlord-tenant disputes. If you haven’t already gotten one, find one now. It’s important to have someone to turn to before you go to court.

If you go to court over a dispute, be courteous at all times. Explain your side, but do not let your emotions get the best of you. Conduct yourself as the business professional you are. If you’ve carefully documented everything, talked to your attorney, and done your homework on the court process, you stand a better chance of winning your case.

Tenant Versus Tenant

Sometimes tenants have disputes with other tenants in the same building. Maybe one tenant dents another tenant’s car in the parking lot and refuses to pay to have it fixed. Your tenants may come to you, the landlord, to find a resolution.

Most state laws restrict the amount of control and power you have in situations like these. Even if you wanted to get involved in a dispute between your tenants, you don’t really have the authority. Your only course of action is to explain to your tenant that this event does not involve you and they need to take the offending tenant to court if they’re unable to work out a solution.

If you have one tenant who is consistently disrupting the rest of the tenants in the building, you might be able to evict him or her on the premise of being a nuisance. (We discuss eviction specifics later in this chapter.) If any tenant action causes a safety issue to anyone else in the building, you need to address it immediately.

Grounds for Eviction

Unfortunately, there may come a time when your tenant isn’t quite what you had hoped for and you want him or her to vacate the premises. However, you can’t break a contract without a reason, and you can’t evict a tenant without cause. You have to have a legitimate reason, something the person did—or, in some cases, didn’t do—that broke the agreement the two of you had. Maybe your tenant didn’t pay rent or didn’t vacate the unit when the lease was up. Maybe your tenant moved in a roommate without telling you or brought a pet into a no-pet building.

How you evict depends on where you live. Most states have devised a few specific types of evictions recognized by state laws. These types of evictions also have specific procedures and requirements you need to follow so you don’t end up breaking the law, too.

Nonpayment of Rent

“I’ll have the rent for you next week,” your tenant says. And next week goes by … and then the next … and nothing.

Nonpayment of rent is the most common reason for eviction. Each time a tenant fails to pay you rent, you lose money. To file an eviction because of nonpayment of rent, you need to produce the rental documents the tenant signed that state the due date for rent payments.

You can work with your tenant, too. If it’s a one-time thing, and your tenant has approached you asking for an extension, it’s up to you to decide if you want to give approval. Whatever you decide, document it in writing.

Lapse-of-Time

Lapse-of-time evictions, also called expiration of lease, come in a close second as the most common reason for eviction. Generally, when a lease expires, the landlord is under no obligation to renew it. This is true whether the lease is written or oral, year-to-year, or month-to-month.

In a lapse-of-time eviction, a landlord evicts the tenant on the basis that the lease or rental agreement has expired. Although a lapse-of-time eviction can be done when a lease is in the final month, landlords who give month-to-month tenancies most commonly use this type of eviction procedure.

You can make a lapse-of-time eviction without giving any other reason other than the lease is up and you want the unit back. Many landlords prefer to use this type of eviction and have month-to-month tenancies because it makes it easier to get the property back.

Breach of Lease Terms or Statutory Duties

In Chapter 5, we reviewed rental agreements and leases and the clauses you could add to them. Adding these rules ensures the tenant has an understanding of what’s expected, and it gives you the legal right to take action should the tenant fail to comply with the clauses stipulated in the rental agreement you both signed.

If you believe your tenant is in violation of the lease, send a written notification to the tenant with receipt confirmation notifying him or her of the breach. Give the tenant an opportunity to fix the breach prior to starting the eviction process.

Maybe you have a nuisance clause in your lease and your tenant later caused a nuisance. As a result, in most states, you can evict due to breach of lease, which means the tenant violated a previously agreed-upon rule. However, just like the nonpayment process, states have different grace periods that allow the tenant to fix the breach before you can file an eviction notice.

Illegal Conduct or Serious Nuisance

Tenants have the right to use and occupy a rental unit as long as they don’t infringe on the enjoyment of others or violate federal, state, or local laws. If they do, they may be considered a nuisance. Nuisances are commonly classified as private or public.

A private nuisance refers to an activity that does not involve physical trespass but nevertheless interferes with an individual’s reasonable use or enjoyment of his or her property. A nuisance could be as simple as someone throwing loud parties every night or a tenant who continuously disturbs the neighbors, resulting in police visits to the property. In fact, the police visit often confirms that the tenant behavior is a nuisance.

A public nuisance is an activity that threatens the public health, safety, or welfare or does damage to community resources. An assault on a landlord or other tenant; use of the leased premises for gambling, prostitution, or drug sales; and other illegal conduct are all grounds for eviction. Unlike breach of lease terms or statutory duties, tenants cannot cure an eviction based on illegal conduct or serious nuisance, and there is no grace period before you start the eviction process.

DEFINITION

Cure an eviction (sometimes called quit an eviction) means to resolve or fix the issue or issues that caused the grounds for eviction.

Building Your “Bouncer Team”

At a nightclub, the bouncer is the big guy at the front door who prevents the wrong people from getting inside and muscles out any troublemakers who did get in.

In real estate, if things go bad with your tenant and you need to get him or her out of the property, you need help. Remember, time is money. The longer the wrong tenant is in your property, the longer you lose money.

Unfortunately, there’s no large real estate bouncer who can toss out your tenant, but a number of professionals can save you time and money and help you get your property back. Let’s call them your “bouncer team.”

Your team should also include the background verification companies who help you qualify potential tenants to avoid renting to the wrong one.

We’ve stressed in several chapters already the importance of having and using an attorney. You’ll want one who specializes in real estate law and evictions and perhaps another—if not the same one—who knows litigation. If you’re fighting a tenant in court, hire a qualified attorney with eviction experience to help you, especially if this is your first time. After you have a good understanding of how the eviction process works, you might feel comfortable enough to handle the process on your own.

In some states, you can hire an eviction company that, for a flat fee, handles some or all of the eviction process for you. Such companies can prepare and serve the notice of eviction, file and serve the summons and complaint, process the preclaim judgment, submit the trial appearance fee, complete the court paperwork, show up in court so you don’t have to, meet the marshal for the physical eviction, write the security disposition letter, prepare the damage paperwork, and even deal with small claims filing if necessary.

A collection agency is another member of your bouncer team. After an eviction is complete, odds are, your former tenant still owes you some money for rent or damages. As part of the eviction process, the court issues a money judgment or a document stating the amount your former tenant owns you. If you’re unable to collect the money by sending the tenant a few reminders, you can hire a collection agency. A collection agency charges up to 50 percent of what it collects, so you won’t get all your money back, but you do get some. What’s more, your former tenant’s credit history is updated to reflect his or her bad payment history with you to protect his or her next landlord from the same problem.

What about the police? Dial 911 only in an emergency situation. If your tenant is suffering a heart attack, if a tenant poses a potential threat or presents a danger to other tenants or to you, or if there’s another potentially dangerous situation on your property, call the police.

However, if you need help with an eviction (the police or a marshal can physically remove a tenant from a property if they refuse to leave), find a firearm on your property, or believe illegal activities may be occurring in your property, call your local nonemergency number. In many areas, the number is 311, but look up the number for your area to be sure, and add it to your phone contacts.

You should also visit your local police station and let them know you’re a new landlord. Ask for information on emergency preparedness and any other information they may have.

Tenants have been known to contact the police with a complaint against a landlord. If this happens to you, don’t get upset. Remember, the first responsibility of an official is to inspect the situation, ask questions, and document their findings. Their job does not include taking sides.

The Eviction Process

It takes only a few hours of work and a relatively small amount of money to properly interview and screen a prospective tenant, but the time and cost to conduct an eviction, or unlawful detainer, can be huge.

DEFINITION

Unlawful detainer is another way of saying eviction, or the removal of a tenant from a rental unit.

Landlord-tenant laws differ in every state. Because of the complexity of the laws, we won’t cover all the details of all the laws here. Rather, we look at the general process. Be sure you get a copy of the landlord-tenant act for your state so you know how it works.

Before you get started, you need to clearly identify who you’re evicting and why. If you’re evicting a tenant because he or she has an illegal roommate, you must identify the roommate as part of the eviction process. In some states, regardless of how a tenant obtained occupancy of the property, the law requires you to go through the legal eviction process if the person is living in the property.

The eviction process actually starts when the tenant breaks a provision, lease, or rental agreement, or when you’re unable to resolve the dispute, you want the tenant out of the property, and the tenant refuses to leave.

There are six steps in the eviction process:

  1. Notice to quit
  2. Summons and complaint
  3. Appearance in court
  4. Answer to complaint
  5. Trial
  6. Judgment and execution

Notice to Quit

Your first task is to serve the tenant a notice he or she must vacate the property. This notice has different names, but the most common is “notice to quit” or “notice to cure.” You must serve the notice to quit to the tenant in a specific manner as dictated by your state.

On the notice to quit, you should include the names of the tenant(s), the address of the property, and the reason the notice is being posted. Depending on your state, other stipulations might apply. Maybe the notice must be served by an impartial person, such as a law enforcement official or a sheriff. Some states allow the notice to be handed in person to a tenant in the household who is over a certain age. Other states allow the notice to be mailed.

The notice should give the tenants details on the amount of time they have to resolve the problem, or it can tell the tenants they must vacate the property by a certain date as prescribed by law. You can obtain state specific forms on the internet, from the court, or from your attorney.

The good news is that many tenants take this notice seriously and resolve the item that caused the notice in the first place. If you’ve served the tenant a notice to quit because the rent is past due, often the tenant will pay the rent owed during the allotted time. In this case, you must accept the rent and cancel the notice to quit. If the tenant tries to pay after the grace period, do not accept any partial payments, or you’ll have to void the eviction process and start over with a new notice to quit.

WATCH OUT

If tenants are evicted and they leave behind some of their property, some states require that these belongings be stored in a professional bonded and secured storage facility. Typically this cost is the landlord’s responsibility. Check your state laws before you toss their stuff in the trash.

Summons and Complaint

The next step of eviction begins after the “fix” date listed in the notice to quit, or the date by which the tenant must resolve the issues that caused the notice. This could also be the date given to vacate the property. This step is generally referred to as the “summons and complaint” of the suit you’re bringing against the tenant.

This summons, which is served on the tenant, includes the name and address of the plaintiff (you and the property) and identifies the tenant as the defendant. The summons and complaint explains the reason for the action and stipulates a specific period of time, usually known as an “answer date” to respond to the complaint. How the summons is delivered to the tenant depends on the rules of the state in which your property is located.

In addition to serving the summons to the tenant, you need to file it with the court. It must be filed prior to the answer date on the summons so the court is ready to proceed.

What happens next is specific to each state. In some states, a court date is set. In others, the date is already dictated by law. In yet other states, the clerk sets the court date. Some courts hear housing-specific cases on a set schedule, such as a certain day of the week. You need to know how your courts work to ensure your eviction process goes as smoothly as possible. Remember, time is money. In addition, each state dictates the documents required from both you and your tenant.

Whatever your state’s procedures, the outcome is the same: a court date is set and both you and your tenant(s) need to be in court on the date and time set by the court to hear the case.

Appearance in Court

This is your chance to tell your story and document your case. To do that, you must bring with you all the proof you have to make your case. For example, bring pictures of damage, original records of payments made by the tenant, and, of course, the signed lease or rental agreement. If necessary, you’ll be asked to bring a certified copy of your property deed to prove you own the property.

If you have a witness, bring that person along, too. If the witness is employed and can’t get time off work, you might need to subpoena the person to require his or her appearance in court. You can obtain the needed subpoena documents from the court.

Answer to Complaint

The defendant, your tenant, is always given the opportunity, either in writing or in person, to specifically answer your complaint.

If the tenant fails to appear in court on the scheduled day of the hearing, you can request that the court grant you a default judgment for failure to appear. Basically, this means the judge rules in your favor just because the tenant didn’t show up.

A tenant could request a continuance to another date if he or she is unable to appear in court on the scheduled day. Depending on the reason and the attitude of the court, the court may or may not assign a new court date.

You may ask for a continuance, too. If you fail to appear in court, the eviction process is ended and you then have to start over.

Trial

Like everything else, the trial process varies from state to state. Here’s a basic idea of how a trial works:

Your case is called by the court clerk to determine whether you’re ready to go to trial. When you hear your name called, respond that you are in the court, and be prepared to proceed. Depending on your state or the court you’re in, the next step could vary. In some courts, you’re assigned to a mediator or a housing specialist who speaks with both you and the tenant and tries to arrange a settlement both of you can agree upon. If an agreement is reached in this manner, it’s frequently called a “stipulated judgment.”

In some courts, you won’t see a housing specialist but instead appear in front of a judge who listens to both sides of the argument and makes the decision. The judge might make a decision on the spot, or he or she might reserve the decision for a later date and mail the decision to you and the tenant.

If the tenant fails to meet a provision of the stipulation agreement, you can file a judgment for failure to comply with the court. The court signs the judgment or assigns a court date to hear the motion.

If you find yourself back in court, the process starts over, with you and the tenant sitting down with the housing specialist, a judge, or a commissioner of the court so a new agreement between you and the tenant can be made. The next step is up to the court. It could continue to give the tenant another chance or give you judgment for execution.

Judgment and Execution

If the judge rules in your favor—or a judgment is granted to the plaintiff—the eviction process is almost over.

You’ll receive a written execution from the court to remove the tenant from the dwelling. At this point, depending on your state, you might have another waiting period between the date of judgment and the date you can apply for an execution. This is generally 5 days.

DEFINITION

An execution is a judicial process whereby the court directs a police officer to seize a property from the tenant—to physically remove the person from your rental.

When you have the execution from the court, give it to a local law-enforcement official recognized by the court to carry out the physical eviction of the tenant from the property. This official notifies the tenant and the court of the date and time the tenant and his or her belongings will be removed from your rental property.

At that set date and time, the official goes to the property and escorts the tenant from the property. Often the official also makes an inventory of what’s being removed.

When the property is empty, the official turns over the property to you. Before you do anything else, change the locks.

Creating a Property Turnover Plan

Think of your turnover plan as a mini business plan that walks you through the steps you need to take to get your rental property from one tenant to the next as quickly as possible while ensuring it’s still properly maintained. By planning ahead—whether your property becomes vacant expectedly or unexpectedly—you’ll know what to do and won’t waste any time trying to remember what you did before. Remember, one of the key elements in the formula for being a successful landlord is time, and your turnover plan helps you maximize your time.

When your property is occupied by a paying tenant, consider it in the green zone (green = money). As soon as your tenant gives you notice to vacate or you receive an execution date from the court, think of your property as in the red zone (you’re not making any money). Your turnover plan should start as soon as your property enters the red zone. Don’t make the mistake of starting your turnover plan after the property is vacant. That’s too late. You want as little vacancy as possible. When one tenant moves out, you should have another ready to move right in.

Cleaning: Your turnover plan should include a list of cleaning tasks you need to have done after your tenant leaves, along with the contact information for the cleaning company you use. You want the property as presentable as possible to find the best next tenant.

Have the carpets cleaned because that’s typically the first thing a potential tenant notices. Also be sure any additional repairs are completed before you start showing the unit. Do not wait to schedule vendors until the property is vacant. Schedule them as soon as you know the unit will be empty. Those days of waiting could cost you rental income.

Upgrades: Schedule a general upgrade every time your property is vacant. When a tenant gives you notice, schedule a time to walk through the property and identify items that need to be fixed or upgraded.

By getting into a routine of upgrading, you avoid walking into a property years from now that needs massive upgrades and sits vacant in the meantime because nobody wants to live there.

Marketing: Again, your goal is to plan ahead. When your tenant gives you notice to vacate, start marketing your property to new potential tenants immediately. Follow the same steps you took when you first marketed your property (go back to Chapter 9 and review or create your marketing plan). Be sure to update any websites or internet property listings you have as well.

In addition to your specific marketing plan, reevaluate the market and your rental rates and see if it makes sense to raise your rates. You might uncover new and interesting places to market your property, and the rental reviews might prove you can raise your rate even more than you thought you could.

The Least You Need to Know