How does a Landlord handle evicting a tenant?
Question
For the first time in my short rental management experience, I recently evicted a bad tenant and need to collect rent and damages from him. What do I do?
Answer
Many novice landlords refer to termination of a tenancy as an eviction. However, in legal terms eviction is lawsuit procedure whereby a landlord asks the court to terminate a tenancy even though the tenant does not want to leave. If you actually completed an eviction action whereby the judge terminated the lease, in most courts of jurisdiction you would have been able to include a money judgment for unpaid rent and damages along with the judgment for eviction if you had so requested.
If your eviction judgment included a money judgment, you can go ahead with collection of the judgment.
If you didn’t obtain a money judgment, you will have to file a separate lawsuit for the money owed to you and begin collection efforts after obtaining the judgment. You can, of course attempt to collect the money without a judgment, but having a judgment opens up a number of avenues for collection not otherwise available, including garnishment, liens, and seizures.
In either case, you must be sure to follow collection laws, including the federal Fair Debt Collection Practices Act and any similar state laws. Also keep in mind that any security deposit must be applied against amounts owed to you and that you must provide an accounting of any portion of the deposit not being returned and to do so within the time period required by your state’s law. In many states, failure to do so puts you at risk of having to pay the ex-tenant significant penalties if the ex-tenant pursues the issue even though he might owe you substantially more money.
Question 2
I live in Phoenix, AZ and own a rental home in Tucson, AZ. Management of my property is becoming a hassle due to the distance and I’d like to find someone in Tucson to manage my property. Any suggestions about how I should proceed?
Answer 2
Although there are many details that need to be considered when utilizing property management companies, selection of the manager can be the most important. The best way to select a manager is by referral from a person you know and trust, preferably one who has used the recommended manager for his/her own rental property. If no personal referral is available, you must take significantly more care to check the person out in as many ways as possible.
It is very important to select a property manager who is properly licensed, has no unresolved complaints on his license record, is knowledgeable about all laws, is experienced at managing the particular type of property at issue, and will competently manage the property. Remember that the manager will be your agent, be in control of your property in many ways, and that you could be held liable for his mistakes or illegal acts.
Of special importance is knowing what should and what should not be included in a management contract. You should consider requesting a copy of the management contract some days before signing one so that you have time to digest its content and decide which clauses are not acceptable to you and attempt to modify the contract. If not possible to obtain an acceptable management contract, consider trying another management company.
Furthermore, even though you turn management over to someone else, you should learn as much as possible regarding property management and be familiar with the licensing and management laws and regulations of your state so that you recognize when they are not managing your property efficiently and legally. You should closely monitor the operation of your property, including regular phone calls related to the monthly financial statements that you should receive and occasional travel to personally check out your property. If you’re not getting good management, you must find another manager.
I recommend that you read our Mini Training Guide titled “9 Property Manager Qualification Issues” for more comprehensive discussions regarding finding and using a property management company.
Question 3
Is there a maximum amount a landlord can charge for security deposits and for performing credit screening?
Answer 3
Although a few states have no statute limit, most states limit the amount of deposits that can be collected and there can be serious penalties for violating the rules. The maximum allowed varies from one to two times the monthly rent in most states. Most states do not allow landlords to avoid limitations by calling the amount of funds something other than a security deposit. You need to check the landlord-tenant law of your state to determine if there is a limit and, if so, the maximum amount.
Some states have specific limits by statute regarding the amount that can be charged for credit reports. Other states limit the charge to the actual cost of obtaining the reports from outside vendors. However, in most states if the matter were to come before the court, the requirement is that the amount be reasonable, taking into account your cost for a report and the time required for you to process it. Typically, $25 to $40 is acceptable. Experienced landlords or property managers in the area of your property should be able to tell you what is considered acceptable in the relevant courts of jurisdiction.