It is every real estate investor’s worst nightmare: your tenants have stopped paying rent . . . now what? If you own enough properties or are involved in real estate long enough it’s bound to happen and knowing how to handle it will make the entire process less stressful. As my readers know, I recently purchased a triplex that the owners were short selling and the first floor tenants, knowing that the previous owner was not paying his mortgage, decided to stop paying rent 10 months ago. I knew ahead of time that this was going to be an issue so before filing for an eviction I tried to work out a deal with them.
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Is Your Tenant Not Paying Rent? First Negotiate, Bargain, Explain
The first thing I did was to reach out to the new tenants and let them know that I had purchased the property and that rent would be due on the first of the month as stipulated in the lease agreement. When the tenant promptly tried to renegotiate the rent I told him that if he couldn’t afford the rent, then I would give him $1,000 to vacate and he could leave any personal property he no longer wanted behind and I would dispose of it for him. I thought it sounded like a good deal for him but he decided to stop answering or returning phone calls, so that really only left me one option, eviction.
How to Evict a Tenant
Evictions seem scary and all of the horror stories you hear usually are from people who didn’t follow the proper protocols or had leases that were not high quality leases. Here’s a brief outline of the eviction process. The process will vary slightly from state to state or city to city but if you follow these general steps evictions are a breeze.
Step 1: Get Your Documents In Order
Make sure all licenses and legal documents are in order – Before attempting to evict a tenant you have to find out what licenses, inspections or legal documents are needed and make sure you have them and they are up to date. Where I live you are required to have a valid commercial activity license and a valid housing inspection license. Every city and town will vary so contact your local landlord/tenant court and find out what exactly is needed and get it.
Step 2: Pay or Quit Notice
The first step in almost every case will be to submit a pay or quit notice to the tenants. This is a legally valid way of telling them their rent is late and they must either pay the rent or forfeit the property back to you. Make sure that when you deliver the pay or quit notice you mail it via certified mail, return receipt requested so you will have evidence they received it to show at your eviction hearing.
Step 3: Wait Out Notice Period
Once the pay or quit notice is delivered there is usually a legally mandated or lease mandated notice period that must expire before you can file an eviction complaint. Some leases actually waive the notice requirement and if this is the case you can file for the eviction right away.
Step 4: File Eviction Complaint
Save yourself time again by calling your local landlord/tenant court and asking what documents are needed to file an eviction complaint. Usually you will need some sort of housing license, the lease if a written lease exists, proof that they pay or quit notice was delivered, and either a cash or check to pay the fees. Once you have all of the necessary documents you can appear in person at the local landlord/tenant court and file for the eviction.
Step 5: Obtain Judgment
After your complaint is filed the tenants will be served notice of the scheduled eviction hearing date but they probably won’t show up in all likelihood in which case you will win a default judgment against them. Once you have a default judgment the local sheriff will remove the tenants and seize their belongings. After the tenants are out the landlord is entitled to possession of the property.
If you own enough real estate eventually you will face the issue of a tenant who doesn’t pay rent. Try to get them out by negotiating but if they resist or are unreasonable then obtain an accurate and up to date list of the eviction process steps in you locality and file for eviction. Evictions seem intimidating but if you know the process and follow the steps you’ll have your property re-rented to paying tenants in no time.
Photo: Aaron Stidwell