Avoid These 3 Costly Mistakes During the Eviction Process!
As a property owner your main goal is to preserve your cash flow at all costs. In addition, when your cash flow has no choice but to take a pause, ensure that it’s handled as quickly as possible. Evictions are one of those inevitable pauses. If you own property long enough you will have to deal with one. What I’d like to go over during this article is what 3 mistakes you MUST avoid in order to not delay the process and cost yourself more money unnecessarily. Let’s jump in.
Number 1 – Pay Attention to Dates + Mailing
When it comes to the legal process, it’s imperative that you follow your state’s requirements for sending proper eviction notices. For example, here in Rhode Island we are required to send what is called the “5-day demand letter” on the 16th day of the month via 1st class mail. What’s tricky is sometimes the 16th day of the month falls on a Sunday, holiday, or day where mail service is impacted (severe weather). So, if one of these apply to your situation it’s essential that you send that notice on the next business day. So, if Sunday does fall on the 16th, all you must do is wait a day and send it on the 17th. It may seem trivial to you, but I’ve seen judges dismiss cases on eviction day because the letter was not sent properly. What does this mean? This means that you must start the entire process over again. Giving the tenant more time to be defunct and prolong the paused cash flow.
Along this topic it’s also important to follow your state’s mailing requirements. For example, in Rhode Island the state just wants it sent 1st class, which means throw a stamp on it. In Massachusetts however it’s required that a State Constable delivers the “notice to quit”. If you mail it with a stamp instead there is a chance that the judge can dismiss the case.
Number 2 – Accepting Monies Between Filing Case + Court Date
This is also a common mistake we see here in Rhode Island. Owners don’t realize that accepting any type of payment in between filing the case and the actual court date can compromise the outcome. The judge can potentially dismiss the case on your court date because the amount shown on the eviction notice is no longer accurate since the owner collected funds. If you do receive monies from your tenant, it’s best to hang onto them (don’t deposit it) and bring it with you on your court date. This way you still control the leverage, but don’t jeopardize the case. If the tenant gives you cash, the same would apply. Hang onto it and bring it with you to court.
Number 3 – Getting Emotional + Creating A Vacancy
So, on the day of court you will be face to face with the person who has been causing you a financial hardship and mental anguish. You’re not going to be happy to see them. What you need to remember is that you are running a business, and your goal is to restart the cash flow again. So, with that said you should consider not creating a vacancy, but rather getting a payment plan created instead. With a payment plan the tenant will agree to pay an additional amount on top of their normal rent until the past, current, and future rent is paid in full. Also, in most states you can add the court/eviction/attorney costs into that payment plan.
For example, say a tenant owes you $1000 and you pay $460 to your attorney for the eviction case. When you reach court, you may want to have the tenant pay an extra $250/month on top of their $1000 rent until their balance is rectified. So, if they make all payments on time you will be paid back your rent in arrears and your court costs within 6 months. Though it’s not ideal to have to wait this long for your money it’s still a better decision compared to creating a vacancy. Think about it…. when you create a vacancy, you are losing the rent owed from the tenant, dealing with 2-3 months of future lost rent, maintenance costs, and finally a leasing fee. So, if you add up all these items its turns into thousands and thousands of dollars easily. Compare this to waiting 6 months to get your $1460 back. Which sounds better?
In sum, you want to ensure that you are following these three tips when dealing with a tenant eviction. Check your dates/mailing requirements, don’t deposit any monies, and don’t make an emotional decision at court. Also, we highly recommend that you utilize the services of a well-versed attorney. Many attorneys will claim to handle evictions, but it’s not their bread and butter. We’ve seen lawyers that are experts in other fields make a fool of themselves over simple process functions (like dates/mailing requirements) and get their client’s case dismissed! Not good! Just like any profession, we all have strengths and weaknesses. Find an attorney that specializes in tenant law or real estate law. With this you are guaranteed to have a better experience compared to hiring a personal injury lawyer.
We would love to hear your feedback on this topic! Post a comment below so we can start a discussion!
Gregory Rice is the Vice President of franchise sales for Nexus Property Management®.
Nexus Property Management® is a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.
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