Podcast 81: Top 5 Eviction Mistakes Landlords Make

Evictions are a part of being a landlord and they are definitely complicated and involve a lot of knowledge to get it right. In this episode of Night School, we’ll take an in-depth look at the top mistakes that landlords make when it comes to the eviction process and how to avoid them.

Transcription: Top 5 Eviction Mistakes Most Landlords Make

Jeff: Welcome to Landlord University Night School. I’m Jeff Pearson. I’m here with my co-host Stephen White. Hello Stephen, how are you doing this evening?
Stephen: Hey, pretty good Jeff. We picked this topic to discuss here on our Landlord University, top five eviction mistakes that landlords make. It’s something that I see a lot of. The eviction process is very cut and dry, very black and white in everybody’s municipality. Sometimes it doesn’t always favor the landlord. I’ll agree to that. But I think a lot of the problems that landlords have with evictions sometimes are self induced problems. They’re problems that somewhere along the way the landlord didn’t do what he was supposed to and got themselves into an issue now where they’re having a major eviction problem. A lot of those things are avoidable mistakes. I definitely thought it was worthwhile to cover a lot of these mistakes here and hopefully help some landlords avoid them.
Jeff: Great.
Stephen: First mistake, number one is waiting too long. I see this a lot of times where the landlord’s just afraid to make the call to finally say I’ve got to go through the eviction process. I think partly they themselves don’t want to go through it. Of course you always, especially a new landlord, want to try and give a person the benefit of the doubt. I think that most experienced landlords grow out of that after they’ve been burned a handful of times and start to realize you can’t do that. Waiting too long is probably I would say the number one mistake that a landlord can make, because a lot of times you’re just compounding the problem. Not only are the charges going up, you’re pushing that timeline out longer when you’re going to be able to re-rent the place. You’re giving them more time in the property, and if they’re doing damages more damages will be done. There’s a whole laundry list of things that can happen if you’re waiting too long and you’re afraid to pull the trigger and to make a move. That’s a lot of times where landlords are going to get themselves into trouble.
Jeff: Yeah, and the biggest reason I would expect that people need to evict a tenant is usually unpaid rent or late rent. If you take that I would expect just off the top of my head probably 80% of the time people are trying to evict someone and are willing to go through the court system to evict them, that’s probably usually the biggest reason why. We’ve talked before about the fact that if you set your ground rules from the beginning and you make it very clear and you hold your tenants to it then this shouldn’t be an issue. You say your rent is due on the first of the month or before the first of the month. If you’re late, it’s going to be this amount of a penalty, and if you’re late more than three times or whatever you decide it’s going to be then I’m going to evict you. If you set that groundwork from the beginning and you hold them to it from the very first time, it’s going to make it clear to your tenants that you’re running this as a business and you expect them to treat it as a business as well. If they overstep those guidelines and they go beyond the grace period of three times or however many times you decide they can have a late payment, then at that point start the process. If they haven’t paid within 7 days or 14 days, again whatever timeframe you’ve established at the beginning, then you start the eviction process.
Stephen: You’re totally right. The other thing to consider is somebody who’s having money problems when rent which is likely their biggest bill in their life, when that starts to pile up if they can’t pay $1,000 now, next month they have to pay $2,000, it’s an impossible climb for a lot of them to get out of. They need that little bit of time a lot of times to couch surf and get more money or whatever their situation is but to get out of paying rent. If you’re the landlord, you don’t want to be that person that’s helping them get out of paying their rent and not enforcing any of those policies that you have, because that will happen. A lot of times, again, they dig themselves so deep that there’s just no way for them to pull out of it ever. Of course that’s what makes rental collections one of the lowest recovery rates in any collection industry. Because if somebody owes a couple of thousand dollars worth of rent then assume that they’ve went and got another place, that they’re paying rent and they’re having a hard time making that rent, they’ll never have an extra net $2,000 or whatever it is to help cover that back amount of rent that they owe. The faster that you can make them move and get them out and minimize your loss really the better it is for everybody.
Jeff: Yes.
Stephen: All right. Mistake number two, you and I, Jeff, have so many times talked about this. If you’re treating your landlording business like a business, you shouldn’t have this problem. But, we see it a lot of times. Landlords have an informal or improper notice to terminate, knocking on their door or making a harassing phone call saying, “Hey, you haven’t paid your rent, I’m going to evict you.” That doesn’t count. You have to give proper notice. The courts will never let that stand up. It’s best to have it in a very formal notice. Use very formal words. We’ve always talked about keeping your emotions out of it. Leave it clear cut to the letter of the law and make sure that they’re getting the right notices.
Jeff: Yes, and make sure that you follow…use the forms that are required by your state and follow the process set down by the state. There are a lot of landlord advocacy groups in the areas. You should be able to reach out to one of them if you need to evict somebody. If you haven’t already, reach out and find some of that help. They’ll help you get everything in place and show you what you need to do to take the proper steps.
Stephen: Yeah. Telling a tenant I’m going to give you or I want you out by the end of the month or you’ve got until the end of the month to get out, not good enough. It needs to be…in order to support legal action for an eviction, it needs to be in writing and it needs to have a specific date attached to it. End of the month doesn’t count. It needs to be on the 30th, the 31st of October 2014, whatever that is. Make sure that it’s very, very specific.
Jeff: Yes.
Stephen: All right. Rolls us into mistake number three, failing to set a deadline for a full payment, or even worse in my opinion, failing to stick with it, something that we talked about a lot. You just covered it as well. If they know that you’re not taking it serious, they’re certainly not going to take you serious. But, if they know that just like a car payment or a credit car payment if you pay late, you’re going to pay late charges. If you don’t pay, you’re going to get evicted or you’re going to have your car repossessed or whatever those repercussions are. If the bank’s pump faked and never actually did what they said they were going to do, nobody would ever make their car payment. You have to have that follow through to let people know you’re serious about it.
Mistake number four, being available at all hours of the day or night, again another thing that we’ve talked about. I think that a lot of landlords sometimes cross that line of friendliness and professionalism. Of course when you’re in a situation or a relationship where you’re more friends than have a professional relationship with them, evicting your buddy is a hard thing to do.
Jeff: Yes it is.
Stephen: Definitely a good idea to draw those lines and stay on your side. It doesn’t mean that you have to be cold or unfriendly or anything, but make sure that they’re well aware that you’re treating this as a business and you’ve got a business mind in it as well. I think they’re a lot less likely to try and take advantage in that way, too.
Jeff: Yes, very true.
Stephen: Mistake number five, failing to work with an attorney, something I see a whole lot of. Landlords I think a lot of them by nature are very money wise. I think initially they see an eviction as being a huge expense to them. Of course they want to save money and do it themselves. Some landlords I know are pretty good with it and can get by. I think a lot of it depends on your area and how easy it is in certain areas versus other areas which can be riddled with all kinds of legal red tape and everything. Never a bad idea to consult with an eviction attorney specifically, we’ve talked about this in the past too, an eviction attorney not your family attorney or an attorney that helped you with a divorce or something like that. We’re talking about an attorney who understands the eviction process in your state who has done it many times. It’s part of their practice. You’re not paying that attorney to learn on your dime essentially on how to do the eviction process.
Jeff: Yeah. It’s definitely important, especially if you’ve never gone through it before. I can’t imagine trying to do it yourself. Certainly you can read all the books and talk to all the people you want, but the process is as much simple as it is complicated, if that makes any sense. I mean you look at it, you think okay I just have to do this, this, this and this. Yeah, most of us probably could do that but we’re much better off getting a professional, as you said somebody who specializes in evictions, because they know the process. They know the judges. It just makes it much, much simpler.
The first time I had to evict a tenant that’s exactly what I did. We hemmed and hawed. Went longer than we should’ve. We went through a lot of this stuff ourselves before we got to the point that we finally just hired an attorney. Even though we had done some of the notification the way we thought it should be done, we were starting from ground zero when we hired the attorney. We had to start with the official notification process and move through. When we brought him on it was only 15 days, 3 weeks before we were done with the process and that tenant had moved out. If we had done that a month prior, we would’ve saved a month’s rent which would’ve practically paid for the attorney.
Stephen: Yeah. The last tip I’ll throw out there before we wrap this topic up would be to find a really good eviction attorney in your area. Simply go down to the court. Take a look at all of the court dockets for the evictions for the past week or month and take note of whose name seems to be showing up there an awful lot for the attorneys. They’re the ones who are handling most of the eviction business in the area. It’s a good starting point to get in touch with them first. A lot of times, too, you’re going to save money by going with somebody that that’s their practice specialty. They’re going to be a little bit more cheaper than your regular attorney, like I said, that’s going to have to do some research and learn how this process works, versus somebody who’s doing this everyday.
Jeff: Exactly. Well, great. I think that wraps up another good episode of Night School, and I look forward to talking with you tomorrow evening.
Stephen: Great, thanks Jeff.