In the midst of the ongoing eviction moratorium, many landlords have asked us: How can I get rid of a bad tenant, if not through eviction?
Deni and Brian walk through four alternatives to the formal eviction process, to remove bad tenants.
As a reminder, landlords cannot perform self-help evictions! You may not change the locks without a law enforcement officer present, or turn off the utilities, or otherwise block access to the rental unit or make the property uninhabitable.
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Brian Davis:
Happy Tuesday everybody!
Denise Supplee:
Hi everyone.
Brian Davis:
Brian Davis and Deni Supplee here from Spark Rental for our weekly chat with you about all things, real estate investing, landlording financial independence, passive income, ditching your day job, all good stuff. So as you join us, let us know where you’re tuning in from and bring your questions. We want to keep this totally interactive with you guys. Not just us talking at you. Last week we went over how to tenant proof, your rentals to reduce your repair costs as a Landlord. We’re talking about four alternative ways to get rid of bad tenants other than eviction, which is a question we’ve been hearing a lot more of in recent months, given the nationwide CDC, eviction moratorium. So, on that note, Deni let’s jump right in and start talking about the four ways, the four alternatives other than eviction that managers can use to evict some of these violating tenants.
Deni Supplee:
Sure. Just want to say hi, Kristin and hi, Christina.
Brian Davis:
Hi Kristin and hi Cristina!
Deni Supplee:
Well we can, you can start clean here and try to non-renew them. If their lease is coming up for renewal, just send them the required notice if you have one and just say, we’re not renewing you or if it’s a month a month, just give them the required 30, 60, whatever you have in your state or on your lease and just non-renew them. Unfortunately, if it’s somebody who doesn’t want to leave, that doesn’t always work, and then you may have to go resort to some other things, but that is a good first defense.
Brian Davis:
Right? We actually, we have a free non-renewal notice on our software, right? Or have we not added that yet? I should probably known that before we launched.
Deni Supplee:
I will make sure everyone if it’s not there, we will make sure it is there.
Brian Davis:
Yeah, we do offer free tenant notices. Both eviction notices and regular tenant letters through the Spark Rental Landlord software.
Deni Supplee:
Just be very careful because some States like California and New Jersey have weird things about non-renewals. And then there are other issues when dealing with senior citizens or other things. So just know your state laws, don’t just send them out and notice.
Brian Davis:
Right. In California they like rebranded non-renewals as like no cause evictions or something which is not an eviction, it’s the non-renewal of a lease agreement. There are a couple of States that have like really goofy laws non-renewals.
Deni Supplee:
Places that have rent control. That’s another one.
Brian Davis:
Yeah, absolutely. It’s worth noting here that with the CDC nationwide eviction moratorium, you can still evict tenants, just not for non-payment of rent at least for certain tenants that meet certain criteria, but you can still evict tenants for other lease violations, right? If you have a hold over tenant who was refused to leave after you’ve, non-renewed their lease, you can evict them for overstaying their lease contract, as opposed to evicting them for non-payment of rent. So that’s just an important note right now during the pandemic. And during this eviction moratorium, you can still file eviction. It just can’t be for nonpayment of rent, at least for those tenants who meet the criteria. There’s an income limit and all other sort of things, by the way, we have a full breakdown of those criteria and the current state of the eviction moratorium on our website, you will see the link in the comments.
Deni Supplee:
The other thing you want to make sure of two is that, the eviction moratorium can take a different face in different localities. So just make sure you’re keeping up on state and local laws.
Brian Davis:
That is true because some local jurisdictions and some States have their own eviction moratoriums separate from the nationwide CDC one. Also, a very good point. Anyway, non-renewing the lease is the first option. Then what is a second option for saying goodbye to bad tenants who were violating?
Deni Supplee:
Well, if it’s that time, raise the rent. If they’re a month to month tenant, raise it high as you go within legal limits. I mean, these are tactics that you can use, but if you have a tenant that is one of the professional tenants, they are going to know their way around these tactics. That means you are just going to have to be prepared for it, but at least start here.
Brian Davis:
Right? And just like with non-renewals, there are some state and local regulations in certain markets around the country, not that many, but there are some that limit how much landlords can raise the rent by each year. It’s usually on a percentage basis. So, they’ll cap it at like 5% a year or thereabout. Just be aware of your local laws before raising the rent 20%, right? But if you do raise the rent on your tenants, it can be a win-win for you. Even if that your tenants are kind of difficult or if they are willing to pay you above market rents, you win. If they decide not to renew you win. So raising the rent can be a win-win for you as a landlord, if the tenants aren’t so, terrible that you’d want them out at any cost.
Denise Supplee:
Right.
Brian Davis:
Number two option is raising the rent on your tenants. All right, Deni, what’s number three?
Deni Supplee:
Number three has a lot of people either for it or totally against it. And I have used it and it worked. It depends on the situation and the tactic is cash for keys. And I’ll just tell you a little bit about what I had, and it was in the city at the time. It was in Philly, and that city near me.
Deni Supplee:
Philadelphia is notoriously tough. It’s one of those tenant friendly cities. It’s tough to evict there just to evict regularly. It takes forever. And this was a professional tenant and had a lawyer involved. And Philly has an agency called Philadelphia Fair Housing Association and if they get involved, it’s just a mess. We ended up offering this tenant cash for keys. It was like six months already with no court date near. And in the long run, what we paid her was less than the ongoing non-paid rent, the ongoing legal fees and everything else. So there are times this will work. Get a spreadsheet out and figure it out, but I’m sure, more than half, probably 80% of the time, you’re not going to get back rent paid back even if you win in court, if that’s the case and or if they’re destroying it, you want to get them out anyway, because you don’t want them destroying it more. I mean, a lot of times this could be a good option.
Brian Davis:
So, two rules for success. If you’re contemplating cash for keys, one, you have to give them a very soon and decisive time limit. Something like you must be out by this Saturday at noon. That is rule number one. Rule number two for cash for keys is providing a condition for the tenant they must put the unit back in clean and good condition, the same condition that they were given the property, otherwise the deal’s off. Those are the two stipulations that you should make. If you’re considering cash for keys make it very soon and within a sharp time limit. And the unit must be handed back to you sparkling clean, and an excellent right.
Deni Supplee:
Right. Give them the money in person. This should be a hand to hand off and you should be looking at the properties.
Deni Supplee:
Make sure all their stuff is out and everything else, because if you are not there in person and you instead send them money through virtual ways, you’re not going to know the condition. So make sure that you’re handing it to them in person.
Brian Davis:
Right. Go in and physically inspect the unit yourself and make sure that they are handing it back over to you in excellent condition.
All right. Last but not least, number four way to get rid of bad tenants other than eviction.
Deni Supplee:
Well, if they’re a bad tenant, they probably doing some bad things. See if you can prove some criminal behavior and try and can get them out that way. Now you got to be careful if you’re using some of these tactics, this one as well. Do not harass them because then, it is going to come back and bite you in the butt. But obviously if you’re getting complaints that there are wild parties or gambling or something like that, it would be easier to do it, but you don’t want to be sneaking into their apartments. Be very careful of that. Make sure that if you’re going to try this to do it very carefully, but again, it’s not that hard to find out if, I mean, look, some of us, all of us eventually walk across a crooked line. It is not that hard to find out these things but be careful how you go about it.
Brian Davis:
And to add to Deni’s point there, you do have to give advanced written notice to enter the unit. How much notice depends on your state, but it’s usually 24 or 48 hours advance written notice before you can enter the unit unless it’s an emergency. Unless there is a legitimate emergency that you can use as a pretext to enter the apartment without giving advanced written notice, then great, but just be aware of that rule. And so, to tie this back altogether, some States allow expedited evictions when the tenant is engaging in criminal activity.
Deni Supplee:
A danger to themselves or somebody or the property in some States.
Brian Davis:
So, some States do allow expedited evictions, if you can prove criminal behavior or that the tenant is dangerous. This is an option, if your tenant are engaging dangerous activity and you can prove it, you will have to show up in court with evidence. Something to keep in mind. Anyway, Deni, any thoughts about what happens if your tenant goes to jail? Do you have to go through the whole eviction process? And then what do you do with other belongings that are left in the property?
Deni Supplee:
Whatever your States mandates. I had this happen twice and I didn’t even know until we didn’t get the rent. And it happened to be somebody who actually paid rent for a while. I finally figured it out and then his family contacted me. But you can’t just take possession of the property whether they have been picked up and are in jail or anything else. You still must go through the letter of the law and wait the state’s prescribed period of times. Go through the regular eviction channels to evict them unless family members or somebody is there that you can work it out with, or if the tenant contacts you from behind bars. And then the other thing is if they aren’t paying rent and you must get possession, you still must hold their stuff according to your state laws.
Brian Davis:
Oh, we lost Deni there. So hopefully she’ll be back in a moment, but today’s point, there are some States and municipalities that do require landlords to store at their own expense tenants, personal belongings that have been left in the property. It’s not fair. It’s not right, but it’s the law and we all must follow it. And one final thought is that if your tenants go to jail, that does not mean that the property is considered abandoned, it doesn’t. To Deni’s point, you still must file eviction and go through that process. Although it’s sometimes can be an expedited eviction process. And Deni has to join us, so welcome back! To recap the four alternatives ways eviction to get rid of bad tenants, one, you can non-renew their lease. If it’s up for renewal, or they’re on a month-to-month lease. Two, you can raise the rent above market rates. Again, if the leases are for renewal or for a month-to month leases. Three, you can offer cash for keys. But if you do that, make sure that you put a short time limit on it, and you must make sure that they deliver the unit back to you sparkling clean and in the same condition in which they moved in. And number four, if you can prove criminal behavior, or if you can prove that the tenant is a danger to the neighbors or someone else in the vicinity, then sometimes you can have an expedited eviction. Evictions are still allowed even during the moratorium for criminal behavior or other lease violations except non-payment of rent.
We got a comment here, Shawn Hundley from Loganville GA. “ always open to networking and possible JV partnership?”. Yeah, this is open to networking. And check out our Facebook group Landlords and Property Managers as well. Alright, Deni, anything else you want to add to re-wrap this up?
Deni Supplee:
Sorry I dropped out! Please make sure that all these tactics that you’re using are within the limits of law because a landlord getting in trouble for some of these things can be worse than if you just waited it out with the tenant.
Brian Davis:
Right. One last thought is that your lease should have an explicit clause in it that makes it a violation for any criminal activity to happen in or around the property. Your lease agreement must have that clause, and it is in the Spark Rental Lease Agreement. We have state specific leases for every single state, which I added a link to. Whatever lease you use, make sure that it has an explicit clause banning all criminal activity anywhere near the leased premises, not just within the unit, but around the entire property.
Brian Davis:
All right. On that note, we’re going to call it a day. So as always let us know what you’d like to hear about next week. This is all about you guys. Actually, we have a guest next week. We’ve got Rick Orford from the Financial Independent Millennial coming on next week to talk about financial independence. Let us know what topics you want us to cover. Because we do listen, and this topic today actually was Tim Dooley’s idea. Because this is something we hear a lot from landlords right now, how to get rid of bad tenants, despite the eviction moratorium! Let us know what you want. And we will see you next Tuesday, 2:00 PM, Eastern 11:00 AM Pacific, and have a great week.
Denise Supplee:
See you later.
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