No one wants to end up in the position where a property eviction becomes necessary. In fact, as real estate investors, this is one of a handful of scenarios that we never want to face! Evicting a tenant is not a desirable process for anyone: owner, property manager or tenants. Generally, evictions happen because something, somewhere, has not gone as you wanted it to.
Maybe your tenants aren’t paying rent, or maybe they broke the lease or otherwise damaged your rental property. They may be paying each month, yet they are habitually late, and you’ve reached the point where the trust is no longer there. The situation may simply have gotten to a point where continuing to rent to the tenant or tenants is no longer wise.
While this article may be helpful for landlords and investors considering starting a management company, there is no way it can replace a conversation with a local attorney who specializes in tenant law. Each state — and often local municipalities — have their own tenancy laws, and it is vitally important that you pay attention and learn those local laws. Keep that in mind as we go through these general steps!
Download Your FREE Rental Application Form!
It may seem like a small thing, but having a solid rental application is the first step in finding great tenants. Since BiggerPockets is all about helping you succeed in real estate investing, we’ve put together a complimentary Rental Application for you to use. Download it today and go find some great tenants!
Reasons for Evicting a Tenant
The first step to the eviction process is to legally terminate the tenancy. If the tenant doesn’t shape up or move, an eviction lawsuit can then be filed. The laws regarding the requirements to end tenancy are very detailed, though the procedures may vary between states. What are just causes to serve a tenant and eviction notice?
Violation of the Lease or Rental Agreement
Violation of either the lease or rental agreements, as they are legal documents, is grounds for an eviction. If you have a no-pet policy for your rental property, for example, and find that your tenants are keeping Fido anyway, that could be grounds for an eviction. Remember that before you act on a tenant’s breach of their legal agreements, be sure that you’re keeping up your end of the bargain with paying certain utilities and responding to maintenance requests.
Rent Not Paid or Habitually Late
While a missed rent accidentally here or there is not usually a big deal (some states do have a buffer in place for payments), a tenant who is late month after month can be served an eviction notice. If they’re just plain not paying rent? Absolutely move toward an eviction. Remember to send notices about late rent and keep copies for yourself in case you have to prove in court that you gave proper notice.
Damages to the Rental Property
Damages go beyond regular wear and tear. Not all property damages are grounds for eviction, either. If the tenant collaborates with you to make repairs themselves (as accidents do happen), an eviction is not necessary. If, however, the tenants damage the property and make no effort to rectify their error or are making renovations behind your back, you have legal grounds to evict.
Using the Rental Property for Illegal Purposes
This one should be obvious. If a tenant is doing any kind of illegal activity out of your property, an eviction is absolutely necessary. It would also be illegal if they turned the property into their own business, such as running a social club out of it.
Writing a Termination Notice
An eviction notice contains the following:
Reason for eviction (the offense)
Time period given to rectify the offense (if necessary)
Date that the notice is served
The signature of the landlord
In most cases, an eviction notice can only be served with just cause. For some month-to-month leases, 30 or 90-day Notices to Vacate can be served when a tenant may not have done anything wrong; however, not all cities allow this. Be sure to know the local laws of your area.
Avoiding An Eviction
Now, there is a misconception that evictions are simply a part of the process and that they are going to happen no matter how good your property, the tenant or the management on the property performs. I would say that is most definitely not the case.
As an example that full evictions do not have to happen, take our property management company. Even though we manage over 2,200 properties in one city and another 450 in a separate city, we only executed 24 evictions in 2014. That is slightly less than .01% of the properties we manage. With that being said, there are a lot of techniques you can use as a landlord or property manager to reduce the number of evictions you have to execute in a year, if not prevent them entirely.
You really, really need to know your local laws before trying to remove a tenant without having to go through the full eviction process. You may be successful in persuading a tenant to vacate, but you want to make sure you are not violating any of their rights in the process or setting yourself up for a lawsuit the other direction based on not following the rules. It defeats the whole purpose to gain the property back only to be served with a lawsuit for the way you went about it.
We have found that communication is the best tool when it comes to working with a tenant. Even when the tenant is behind on payments or violating the lease in some other manner, communication could be the difference in a tenant leaving happy and a tenant being forcibly put-out and costing you hundreds or thousands of dollars.
The key is to remember that there may be circumstances going on in their life that you are not aware of, and showing a little respect may go a long way in them vacating your property. Be sure to listen to your tenant and offer solutions if they are facing a struggle. If you listen and communicate in an effective and respectful manner, you just might be able to help your tenant find a solution that benefits both of you.
Moving From One Property to Another
This only works if you have multiple properties available and properties in different price points. As a management company, we have multiple price points and a solution for a struggling tenant is often a simple move from one price point to another. Even if you only have limited properties, moving a tenant to another rental property is always an option, and you can be the hero instead of the evictor if you help that tenant find another property they can afford and help them get to it.
Cash for Keys
This is a common term used by landlords and managers when a tenant is offered part of their deposit back in return for vacating the property and returning the keys. It is a an easy solution and one that often is at a minimum considered by the tenant. It can also be used in conjunction with moving them to another property, as the returned deposit helps them place a deposit on a new property. When you have good communication, an alternative like this one to eviction can absolutely be accomplished.
Evictions, while part of the management process, do not have to be scary nor do they have to rule your world. There are rules in place to protect owners and tenants alike, and although those rules differ from state to state and city to city, landlords and managers can still manage property without having to worry about what happens when a tenant goes sideways.
Have you suffered through the frustration of evicting a tenant?
Tell us about it in the comments — and leave any tips you’ve found useful!