By Leonard Baron
As with all tenant issues, the first way to try to handle this situation is in a fair, reasonable, respectful and professional manner. This will almost always give you the best outcome, even if you do lose some money from the situation.
The reason I stress this point is simple. If you’ve treated your tenants with respect, (who by the way are paying for your retirement and should be the most important people in your life) there is a much lower chance that you will get into a dispute that will undoubtedly cause you stress and loss of funds.
Of course, this approach doesn’t always work and sometimes, the tenant-landlord relationship can become tense and things unfortunately can sour. Welcome to real estate!
Luckily, because these kinds of things have long been part of the rental business, there’s been plenty of time to develop ways to handle these events. So let me offer some general guidance that could be helpful to your circumstances.
Every Situation is Different
There are different state and local laws. Each tenant is different. Each issue presents different circumstances.
Only you can decide how to handle your particular situation, including whether you need legal advice. If things do not go well, it may unfortunately cost you a lot of money. They key is to reduce your losses, should a tenant refuse to vacate at the end of the lease.
Scenario 1: They are paying rent but won’t move
They are still paying rent but you want them out because you want to renovate, you want to move in, you have an issue with their tenancy that violates the lease, you want to up the rent. Talk to them on the phone first and alert them to the issues. A good approach is to give them extra time on a month-to-month basis so they can find a good place to move to.
Make sure you comply with all the local tenant notice laws and give them the proper written notice after you’ve discussed it with them. This is critical. Let them know that a written notice is coming. Always try first to negotiate a fair resolution for all parties. This will better ensure that they will move out on a scheduled date, that they’ll leave the property in good shape, and you can move on with your plans for the residence. If they just refuse, we’ll cover unlawful detainers below.
Scenario 2: They are broke!
They are not paying rent because simply do not have the money to pay. They may have contacted you to alert you to this, or they may not be answering your calls. Again, your best chance to mitigate damages is to work with them on a plan to vacate the premises. So … reach out! You will probably never see a dime of the money they owe you, nor what you’ll pay for an unlawful detainer (UD) eviction lawsuit. Make sure you give them that proper legal notice of their lease violation/failure to pay, as per the local laws.
Try to work with them and get them to agree to move out in a reasonable time frame. Suggest that they move in with family or friends. Suggest that this is a way they are helping you reduce your losses. Tell them you will give them a good rental recommendation if they handle this unfortunate situation responsibly. This is where the “treating tenants with respect during their lease” comes in. Hopefully, you have built up good will and they will want to help mitigate or reduce your losses.
Potential solution: My attorney, a long-term real estate owner, will meet with the tenants and offer them $750 to move out — if they do it within a few weeks, leave the place in good shape, and let him show the house during that period. He says it gets the tenant out quickly, gets the house back in close to rental shape, and lets him re-rent the property without delay. And it works!
Bring in a mediator: If you are ticked off at your tenant, it’s still worth trying to negotiate. It’s a lot better then spending twice as much on legal fees, and it drags through court for three months while you are not collecting rent, and they leave the place trashed! So if you are too upset to negotiate, get someone who is neutral, like a mediator, to work a deal to get your tenants out.
Relations Deteriorating, Eviction Needed
If they just won’t leave, filing a UD eviction lawsuit may be the only option — just make sure you gave the proper legal notices from the start of the process, per above, so you aren’t slowed down in a UD suit.
Cost and time frames vary by state, so do some research. Once you file, they will be served notice, but still offer and negotiate to drop the lawsuit and spare their credit report if they move out. The longer they stay, the more you lose regardless. It’s going to test your ability to stay cool and make good decisions, but getting them out quickly so you can re-rent the property should by far and away give you the best outcome.
If you do enter the rental property game, you’ll find that dealing with tenants in financial trouble is one of the least enjoyable parts of the business. But it is inevitable, so try to make the best of it — for a good solution for all parties.