Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
I had this idea I've been malling for about 5 years now, it's related to car title loans with process collections, it's always been complicated so I never got past the legal phase... but then the other evening it hit me, we could just impound vehicles when rent is late, with correct contract wording as always... lol
With some of our MFUs or THs, we have assigned parking to vehicles, or assigned parking to the property. Even the HOA's for example will tow vehicles on any properties that are not in good standing with them... so with a contract, I don't see why we can't do the same.
I know the Landlord Tenant Act in Virginia does not cover this, but it made me think, what if we gave them a 5 day notice to pay rent, plus with that, a notice that their vehicles would be towed after the 5 days if not paid, that is of course assuming our leases have an addendum or wording to give us the right to do that.
Rental Property Investor · Richmond, VA · Member since 2017 · 295 posts · 229 votes
9y
@Levi T. I've never thought about this and I have no idea the legal ramifications behind a situation like this, but I definitely will be following this forum post. I live in Virginia as well, so I am very curious if this is something that would be allowed. Great question!
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Account Closed lol - we already tow vehicles that have missing plates, flat tires, expired tags, etc. Our lease gives us the right and the tenants know it. No one is going to jail.
The judge will most likely ask if it's in the lease, if it is, and it's correctly done, they will let it fly.
There is nothing shady about it, it's leverage. When your running a multi million dollar rental portfolio, you want to create all the tools you can to give you leverage. This is already being done where they rent parking spaces in the city, so it's just a matter how to construct the lease terms IMO.
If you think that shady, I hope your not charging your tenants late fees or evicting them for non-payment.
From time to time you have tenants that don't care about late fees, no matter how steep they are, but if they know their car could get impounded... that's a lot of incentive.
Just because a lease gives you a right, it does not mean you have to inforce it, just wave it around so everyone knows.
@Account Closed lol - we already tow vehicles that have missing plates, flat tires, expired tags, etc. Our lease gives us the right and the tenants know it. No one is going to jail.
The judge will most likely ask if it's in the lease, if it is, and it's correctly done, they will let it fly.
There is nothing shady about it, it's leverage. When your running a multi million dollar rental portfolio, you want to create all the tools you can to give you leverage. This is already being done where they rent parking spaces in the city, so it's just a matter how to construct the lease terms IMO.
If you think that shady, I hope your not charging your tenants late fees or evicting them for non-payment.
From time to time you have tenants that don't care about late fees, no matter how steep they are, but if they know their car could get impounded... that's a lot of incentive.
Just because a lease gives you a right, it does not mean you have to inforce it, just wave it around so everyone knows.
Must be easier in Virginia. That would never fly in the Republic of California
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
9y
Originally posted by @Account Closed:
@Levi T. I agree to miss plates, flat tires tow it but if everything is in order you are risk of being charged with auto theft regards of your weasel clause. Before you see the judge, the cops will pick you up for theft all the tenant need to file charges. A judge don't care if it is in your lease it consider auto theft. Now you are on a roll and if someone took your auto because you did not fix something the tenant requested you would be upset.
Okay, clearly you can't see the legal contradiction in your own post, if you think it's OK to tow a car for a flat tire, but not ok if they failed to pay for their monthly parking fee.
Investor · Georgetown, TX · Member since 2017 · 11 posts · 11 votes
9y
We just evicted a tenant for non-payment of rent last month. I looked into turning off the water after they turned down cash for keys. It wasn't legal. If you cannot turn off the water in Texas, I sincerely doubt you are going to be able to two a car there
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
9y
Originally posted by @Account Closed:
@Levi T. If you want to do auto theft go ahead and do it. That sound out in left field charging a tenant to park.
With a contract the police officer can not act as a judge and arrest you, no matter what state you live in. He would defer it to civil court by telling the tenants/plaintiff to file a civil suit. If the tenant did that, then a judge would decide the outcome, which would not include include criminal charges due to existence of a contract dispute... if they won, the landlord would owe them for damages, being the cost to recover the vehicle, legal fees, and maybe lost wages.
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
9y
Thinking about this thread while ripping some hills on my mountain bike gave me some time to think about it more in depth. I think it splits into two groups:
Group 1) SFH, any property with a private driveway, that can not be convert to assigned space type of parking, thuy these properties can not do this.
We can not tow based on late rent per say, that can not be the reason to "hold a car hostage". Impounding someones car sitting in a public parking space would likely get a hard scolding from a judge somewhere, so even if it worked a time or two, overtime it would be outlawed IMO. So it has to git inside of current laws and services. This is where group 2 comes into play.
Group 2) Any properties such as MFU, or Townhouses. Both these property types have parking spaces that are not a private driveway. Generally speaking, they are not part of the rental unit, unless it was included. This is the group you want to be in, because you can separate the parking space as an additional service that is not part of the rent.
By doing this, then applying some payments terms to insure the tenant has to pay his other account balances first before the parking space, you can then tow any vehicles parked in the space that is not in good standing with the parking space rental agreement.
This means if your rent is $1,000. You can add onto it by charging, lets say. $20 for two parking spaces, or you can reduce the rents by $20, and charge it. This separates the parking space from the property and rents.
It's plenty simple to say any payments made first go to any outstanding balances, then rents, then parking spaces. When they don't pay rent, you can give a 5 day notice and let the towing company do their thing.
I think that fairly solid ground, we only operate in the MFU and TH space, so I'm going to roll that up to our legal team and let them draft an parking amendment.
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
9y
@Levi T. I doubt you even need to give them notice. I don't see how its any different from someone paying a private metered spot hourly and getting towed after the meter runs out. No notice given there - simply that the parking space isn't paid, so you can immediately get towed. I like the idea.
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Matthew Olszak I'm sure your 100% right. My goal is not so much to tow the car, but to give greater incentive to late tenants to pay their rent, I don't want to work my agents any harder than we are.. we are big believers in streamlining things and following the company process.
Having one's vehicle(s) towed is a direct punch to the gut, it hurts no matter who you are in life.
If we compile it into our pay or quit notice, which under Virginia it's 5 days before we can file a UD summons, we stay within our company process.
Our pay or quit notice is like the all-in-one notice. We not only tell tenants they have 5 days to pay rent or get evicted, we also give notice that in the event of abandonment or eviction, we will trash out their unit within 24hrs at the tenants expense. By doing that, we don't have to send another notice and wait or put their stuff in storage for 30 days, as they already got their 30 day notice time they show up in court.
If we can tack on a notice that any vehicles in unpaid parking spots will be towed within 5 days.. We stay in our process, and we can just issue a notice to the towing company while we are filing the UD summons.
They can always go park somewhere else, like guest or public parking, bud if they are ignoring their account balances, I doubt they will pay much attention till they get towed.
Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
9y
@Levi T. - Legal opinion aside, why would you want to remove your tenant's ability to get to their job? I always send a 5 day letter too, but I hope like hell I will get my money and the late fee and not have to evict. I will do anything reasonable to avoid the expense of turning a tenant. Treat your investments like a business. Take the emotion out of it. Your goal is to maximize your return, not win every battle.
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Patti Robertson It's not emotion, it's seeking innovation to a stale industry that continues to run on how it has been for the last 50 years. It's why our company is growing at a 12 million dollar clip per year. It's why for every unit we rent, we gain an additional $52.38 per month on top of rent, compared to our competitors who get nothing, or subtracting from their rent in transaction cost. That's $628,560 more per year going right to the bottom line for every 1,000 units we own and operate.
I'm not a landlord, I just own companies that own assets, one of my companies rent them out, and others process debt collection, etc....We have taken things a step further and redefined operating models, work hard to redefine the industry as we see it, yes within the laws. I ask my team daily how can we innovate ahead of the curve. This is just one of those. There are no bad ideas, only ideas that work, and those that don't.
Real Estate Agent · KS · Member since 2017 · 157 posts · 71 votes
9y
How about make tenants pay for parking separate from the lease? Give them a 30 day free parking permit as an incentive for paying on time. If they don't pay rent on time they would always have the option of paying the parking meter machine.
I like your thinking outside the box. Our industry has become quite complacent and developed a defeatist attitude toward dealing with tenant issues. It is a deplorable side effect derived from equating tenants to a customer....the "customer is always right" "place your customers interests first" etc. mentality.
We need to get back on top and as with everything else regarding investing leverage is the key.
As with issuing a eviction notice it is not necessary to always follow through, you do not need to take their car, you simply convince them that you can and will if necessary. Leverage.
See how they like taking the bus to work and the liquor store.
I like your train of thought. Stay ahead of the curve. I agree with @Account Closed, As investors we need more leverage. You do not need to take their car, you simply convince them that you can and will if necessary. Tenants have way too many rights IMHO.
My advice is ...find out. It's only bad advice if it doesn't work. All I am suggesting is to dig deeper, find out if it is possible and if so go for it.
For you to assume it is car theft without further investigation is naïve on your part, are you a criminal lawyer by chance ?
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
9y
Originally posted by @Account Closed:
@Thomas S. I never assume on anything, and if you take someone's auto that consider auto theft unless you are Mr.Rizzuto in Canada they can get away with it. I am smarter than a Lawyer.
John,
If you rent a parking space and do not pay your rent, the typical result is your vehicle is immobilized (booted) or it is towed and impounded. Similar results can be anticipated if you "squat" in a parking space that is not yours.
Renting a parking space is a commercial lease and would fall outside residential tenancy law. I would be surprised if having a bonded towing service either impound or immobilize the vehicle would be construed as theft.
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
9y
@Levi T. You should run the numbers on the boot idea @Roy N. mentioned. Since the space isn't wasted by their car being there as it would be in an hourly lot, you'll retain control. If you have it towed, I think the tow company can only charge their fee, and once that's paid the tenant will get their car back, but you still won't have your rent. Another plus of the boot is the visual and social pressure, especially in a large complex. It'll hopefully put more pressure on the debtor to get their rent paid knowing everyone else there see's they are obviously behind.
If you boot it, I bet you could structure the lease language in a way that would require payment of the rent in full for the boot to come off, plus the boot fee, because like you suggested the parking would be the last item funds would be applied to. If you have a permanent handyman on staff, he/she could do the boot run in the morning to get the day started, assuming all of your units are close enough together.
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
9y
@Bob H. Yep, and then they can think about their past due rent every time they have to walk half a mile to find street parking. Many suburban municipalities around here even have ordinances against street parking overnight - you have to call the police department each night to inform them why you are leaving your car on the street. I imagine if using the boot idea, most late-paying tenants will laugh it off in the beginning, and then when they wake up and see 5 boots out on the lot, the next month the on-time rate will skyrocket. Stuff like this stresses people out, which is the idea, pressure them into paying on time. If they don't, they get more pressure by the loss of their vehicle or having to suffer a major inconvenience to use it.
Contractor · Fort Worth, TX · Member since 2015 · 379 posts · 740 votes
9y
Originally posted by @Account Closed:
@Thomas S. You might get away with it in Canada, but you are telling someone to steal the tenant's auto and go to jail. And you call that leverage in the USA we call it theft. Go ahead and give bad advice.
You're simply repeating yourself and becoming tiresome, without offering any actual evidence to support your position.
This is actually a fascinating idea. It may or may not work in real life - it seems likely to be dependent on state laws, and upon how you craft a lease. And it would certainly be wise to have an attorney research the issues for your state.
But a parking lot owner certainly has the right to have a car towed or booted for unpaid parking fees. It happens every day. It seems very likely that a properly crafted lease, particularly if it separates parking fees as a specified part of the overall rent, would be perfectly legal. In that case, the apartment owner is, in effect, also operating a parking lot. So how about offering some actual logical argument instead of just repeating the same content-free talking point?
@Levi T. You should run the numbers on the boot idea @Roy N. mentioned. Since the space isn't wasted by their car being there as it would be in an hourly lot, you'll retain control. If you have it towed, I think the tow company can only charge their fee, and once that's paid the tenant will get their car back, but you still won't have your rent. Another plus of the boot is the visual and social pressure, especially in a large complex. It'll hopefully put more pressure on the debtor to get their rent paid knowing everyone else there see's they are obviously behind.
If you boot it, I bet you could structure the lease language in a way that would require payment of the rent in full for the boot to come off, plus the boot fee, because like you suggested the parking would be the last item funds would be applied to. If you have a permanent handyman on staff, he/she could do the boot run in the morning to get the day started, assuming all of your units are close enough together.
I love the boot idea. That is awesome. I'm going to reach out to our towing company and see if that's an option, it's much easier to let a 3rd party handle that process.
Only downside is if you boot a bunch of cars in one location, could start looking like a ghetto, but I'm willing to try it.
Tenants not in good standing will have to park way down the street type thing to avoid getting towed multiple times. Impound fees are $150+, they don't like it when they get popped twice in a day or so.
I also like the parking leasing agreement as it can introduce more fees that allows us to collect more revenue, such as a late fee on the parking agreement, car detailing services, etc. It really start stacking up.
We did this with one of our landscaping vendors for String of TH we own. We got an agreed price to cut each unit, then doubled it and offered lawn care to the TH tenants for a monthly fee, they loved it.
Rental Property Investor · Charlotte, NC · Member since 2017 · 298 posts · 232 votes
9y
I'm sure that it all depends on state laws, how your lease is structured and what payments are applied first, and what type of property you own (SFH, MFU, TH,etc). I would also be careful how you word your reason for doing so if allowed in court. If your documents are in order but your explained reason for doing it is to influence rent payments or occupancy you could find yourself in trouble for violating tenants rights. Also, some states view a vehicle as essential to one's livelihood and either severely restrict impound rights or grant additional rights for defense of property even if a loan is in default making said impound extremely risky. Some states may even bar you from doing so completely putting you at risk of criminal and civil liability. Proceed with caution but explore it till your curiosity is satisfied.