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.
Has anyone done this, or ran into any issues?
@Matthew Olszak so your saying your MFU is both a parking lot and a residential rental? Parking lots operate under different laws than rentals. If I park in a parking lot and don't pay there are signs and ordinances telling me I will get towed. The sign in your apartments is going to read "tenant parking only. First you must pay the rent than you will be allowed to pay the parking. All others will be towed". I hate to think how your going to find laws to make that stick. Also it seems to me it would be easier and cheaper to put a boot on a wheel rather than pay a tow and storage. RR
@Ralph R. It appears you don't know how private parking or towing works. It has nothing to do with permits, signs, zoning, ordinances, titles, encumbrances, or any of that.
I can call a tow company and they will remove any vehicle from my property at my direction at no cost to me. It's as simple as me making a phone call and my job is done. The tow company hauls the vehicle to their lot and they store it, I don't. When the vehicle owner wants it back they must pony up the towing fee plus any storage charges which are paid directly to the towing company.
Every time I have a vehicle towed I need to be prepared to deal with a potentially angry vehicle owner so I always make sure my action was justified. Whether or not you could structure a rental situation to give the LL legal grounds to tow for non-payment of rent is what's up for debate here. I think in certain situations it could be.
@Ryan Murdock I see what your saying. I didn't understand how that works. We have 7 miles of roads here not quite a big city. What I'm not sure about is how do you justify towing a vehicle that had permission to park there on the 30 of the month and not on the 1st if rents arnt in. Also I'm not understanding if this is such a good idea why is it not common place. I own both rentals and storage units. When I don't get rent my goal is to regain control of the property. Any action I take that is not directed at recovering that control and lost revenue seems counter productive and a waste of time. Punishing the tenant doesn't enter the picture. Towing his car while he still has possession of the unit mite get you a destroyed unit. It would here for sure. Maybe even a shot up unit. I don't see how towing the car is helping the landlord regain control of the unit. Kinda like beating a dog for urinating in the house. He might bite you and you still have to clean up the mess. RR
@Ralph R. Its not so much to be used as retaliation, but more-so as a preventative. Like late fees, its just additional pressure to get tenants motivated to get their rent in on time, like by maybe sacrificing buying the Canelo vs GGG fight on PPV, lest their car get booted or towed in the morning. Or, having the huge inconvenience of having to move their car to a location not controlled by the landlord. They might do it once, but afterward rent will move to the top of the list, because the tenant knows they need their car. If we can get them to pay on time more often, we won't incur the large eviction/turnover costs associated with nonpayment.
@Ralph R. Its not so much to be used as retaliation, but more-so as a preventative. Like late fees, its just additional pressure to get tenants motivated to get their rent in on time, like by maybe sacrificing buying the Canelo vs GGG fight on PPV, lest their car get booted or towed in the morning. Or, having the huge inconvenience of having to move their car to a location not controlled by the landlord. They might do it once, but afterward rent will move to the top of the list, because the tenant knows they need their car. If we can get them to pay on time more often, we won't incur the large eviction/turnover costs associated with nonpayment.
This is exactly it.
@Ralph R. If a vehicle has a loan, it is just like a mortgage - you hold the title, the bank has a lien on it. ...
This part of your statement is inaccurate; in most cases the lender on a car loan holds title until it is paid off. See link:
As with every discussion regarding training of tenants those opposed always look at the suggested as a given action to be carried out as opposed to a threat/deterrent.
It is and always will be about training through leverage. Late fees, notice to pay or quit, evictions or towing of vehicles is a psychological source of leverage which only in the most server cases is actually applied.
It is no different than say a bookie making collections. When a debt is not paid one does not go directly to killing the debtor. You begin by informing them of the consequences, perhaps begin with a threat, then a beating, maybe a knee capping and ultimately a killing to send a message to others.
Debt collection follows the same principal in ever business to varying degrees. When a tenant does not pay on time a notice is sent, followed by late fees and possibly a eviction notice which may or may not ultimately result in eviction. Simply having another tool of persuasion such as the threat of towing and actual towing of a vehicle is no different than any other leverage a LL may apply.
Avoiding actually operating your business out of fear of retaliation from tenants is ridicules. If you are afraid to collect rent you are in the wrong business.
Tenants not being able to get to work without transportation is about as real as it gets. Sorry. If you have a transporter like Star Trek, good for you. I haven't seen one myself, yet.
Bounce it off of Lisa Madigan (while she's still the IL AG) and see what she says ...
They must not cover things like this in your $30k "education" programs. If a ANYONE doesn't have a car, they take a bus. They call a taxi. They call an Uber. They call friends/family. They call coworkers. They don't just throw their hands up and say, "Whelp, looks like I'm done working." No, because they have cable to pay, they have electric to pay, food to eat, going out to do, purses to buy. I just want to be higher on that list, and taking away a car will make that happen a lot quicker than a letter will.
Not sure why I'd call the AG unless you can cite some statute to the contrary?
Ask your attorney to explain the statutes under which you can be charged with "grand theft: auto".
If someone has their own means of transportation and you take that away from them, then still expect them to pay you money with no income, give a week's pay to get to work and back for two days, ... I dunno, guess I'm just too dumb to figure that one out.
... and by the way: the classes are $20K max, and NONE of them qualify as pre-law.
Also, depending on the scenario, towing fees can be upwards of $500, enough to feed their family for the month.
... and then people wonder why drains get filled with concrete, walls get broken open, copper gets stripped - with the water still running - or buildings get torched when there's an eviction.
You're asking for it, plain and simple.
@Jerel Ehlert I'm curious, do you even own residential rental properties?
Hahahaha....down to character, but I've got a moment and it amuses me that you don't get how deeply you've stepped in it.
I started real estate investing in 2000, like most do, bird dogging and wholesaling. I've done rehabs then partnered with a gal that handled that side. I've bought and sold rentals in blue collar and war zones. I've owned property in Texas and Michigan (btw, I've been to your beautiful city and have family in Maine).
During the 2008 crash, I liquidated, did some other stuff, then went to law school. There, my thesis paper was on the differences in commercial UCC v. real property self-help remedies in 50 states. I literally charted real property remedies for default in leases in every state. EVERY state in the USA has FED statutes for landlords to use to recover possession of real property. EVERY state either strictly forbids landlord self-help (with stiff civil penalties or criminal charges) or permits LIMITED self-help under VERY LIMITED circumstances.
I'm also a practicing lawyer (in Texas) that focuses on real estate and investors. My firm does evictions and foreclosures, draft closing docs, cures defects in title, probates estates, and litigates issues related to real estate.
Btw, Texas has statutes which control towing state-wide in addition to any local ordinances. A violation of the tow statutes is also a Deceptive Trade Practices Act (DTPA), which allows for economic damages (tow charges, storage, lost wages, etc.) AND recovery of attorney's fees, court costs, etc. on top of statutory penalties of the tow statute. IN ADDITION, if you violated the tow statute knowingly, may recover 2x damages + mental anguish damages. If done intentionally, recovery is 3x economic and mental anguish. This is separate from any recovery for violation of the property code, finance code, criminal code...
Anyone contemplating this course of action should talk to an attorney licensed in your state first. Good luck out there.
@Jerel Ehlert Looks like after all that chest pounding the answer to the question of whether or not you own actually own residential rental properties, which is all I asked, is in fact, "no".