Evictions can be tricky: One wrong move, and you can wind up making embarrassing or costly mistakes that delay the eviction and disrupt your income stream. Unfortunately, landlords and property managers tend to make the same mistakes–and pay the price–time and time again.
Here are the ten most common mistakes that rookie landlords (and even some veterans) make, to their chagrin.
The 10 Most Common Eviction Mistakes
Eviction Mistake #1:
Skipping the Lease
Small landlords often make the mistake of renting on a handshake. This is always a mistake. We’ve yet to see a situation play out where any reasonable observer could say, “Well, thank god there wasn’t a formal lease in place!” Always, always have a professionally written lease agreement that spells out the following elements of the contract in detail:
- How much the rent is and when it’s due
- What happens if the rent is not paid by the due date
- Late fees and what happens if they’re not paid
- When the lease expires and what happens at renewal/expiration time
- How much move-out notice is required
- What happens if the tenant moves out before the lease expires
Eviction Mistake #2:
Because landlords are so personally invested in their properties–it’s their money at stake, after all–small landlords are particularly prone to verbal spats with problem tenants. The problem is that it’s too easy to say something in the heat of the moment that could be construed as evidence of housing discrimination. A tenant can call you every name in the book; but legally, it doesn’t change a thing. If a landlord or property manager does the same thing, it can bring state or federal housing regulators down on your head so fast it would make your head spin–and cost you big time in legal fees, fines, or settlement costs. Meanwhile, you’re still stuck with the problem tenant!
This is a great reason to hire a property manager: To provide a professional buffer between an excitable tenant and an equally excitable landlord.
Eviction Mistake #3:
If you own or manage multiple properties, it’s important that you establish a formal and consistent set of criteria to govern eviction procedures. The more dwellings that you control, whether as a landlord or as a property manager, the more critical it is to have this criteria written down–ideally in the lease signed by each tenant–and to stick to the criteria that you set. If you don’t, you could be accused of favoritism at best, and illegal housing discrimination at worst.
Remember that tenants’ lawyers are likely just as good as your lawyers; expect them to be skilled at sniffing out the slightest whiff of discrimination, and using it to stonewall an eviction procedure for weeks or months.
Eviction Mistake #4:
Shutting Off Utilities
Yes, it can be tempting–but even if your tenant has not been paying the rent, this amounts to constructive eviction, which is illegal in all 50 states. If you choose to evict, you have to do it properly–by convincing the tenant to leave via the normal process, or by winning your case in court.
Eviction Mistake #5:
Accepting Partial Payments
When you accept any other rent payment than the full amount, you may be unintentionally giving up certain rights that could forestall the eviction process. Nice landlords might be tempted; smart ones usually won’t be. You might grant an exception to a proven tenant who’s been renting from you for years and who takes great care of your property. Even then, however, it’s problematic for owners and managers of multi-family properties; if you cut a deal for one tenant, word will get around, and others will expect the same treatment.
Eviction Mistake #6:
Each state has laws that govern when and under which conditions a landlord or property manager may enter a dwelling that they own or operate. While the specifics vary by state, in a non-emergency setting, you must provide written notice (a note on the door usually works) before you enter to inspect the unit.
Furthermore, just because you suspect that the tenant has abandoned the property, or because eviction proceedings are already underway, doesn’t mean that you’re exempt from your state’s notice of entry requirements.
If a unit is occupied by someone you’re trying to evict, it may make sense to arrange for a law enforcement officer to accompany you.
Eviction Mistake #7:
Failing to Hire an Eviction Attorney
Few landlords are truly qualified to handle their own evictions. There are just too many small mistakes that could come back to bite you, in delays and in lost rent. Furthermore, judges secretly hate laypeople coming in and making a mess of the procedure that they then have to clean up. Worse, tenants’ lawyers will openly celebrate when the landlord shows up without an attorney. If and when you lose, it’s back to the drawing board for you, as you face weeks or even months of additional delays as you redo your whole eviction process. Don’t get duped–get an attorney.
Eviction Mistake #8:
Failing to Offer Cash for Keys
No, you shouldn’t have to–but eviction isn’t free, and vandalism is common during the eviction process. When an eviction is inevitable, a reasonable ‘cash for keys’ program gets both sides on the same side of the table, with the departing tenants looking to maximize their interests by quitting the dwelling.
You could go for the nuclear option, but so could the tenant: They could ruin the walls, steal the appliances, and destroy the carpet on the way out the door. Sure, you could sue and get a judgment–but if they were the kind of people that you could collect a judgment on, you probably wouldn’t be evicting them.
Make an offer in exchange for a graceful exit. It will pay for itself when you can get a new tenant in the building almost immediately. It’s a lot less of a headache than an eviction and a clean-up after a tenant who, at best, didn’t care about you or your property; and at worst, actively sought to destroy it.
Eviction Mistake #9:
Blowing Your Notification Protocol
In the course of an eviction, it doesn’t actually matter who’s right. It usually comes down to who best followed procedures. If the tenant broke the lease, and you follow the eviction procedure in your state, you’ll likely win. If you get sloppy, you give the tenant’s lawyer a chance to gum up the works and buy time for his or her client–at your expense. When someone’s late with the rent, present them with a formal notice–with lawyer-approved language–to pay their debt in full or to vacate the premises within X days, or you will file for eviction. (Here’s a handy list of how many days you must give the tenant to comply, by law, in each ) Don’t get into a conversation with the tenant; if they have questions, refer them to the instructions in the letter and the terms of their lease.
Eviction Mistake #10:
Threatening to Withhold the Security Deposit
This is generally a bad idea because security deposits are supposed to be held separate from rent. Rent payments that you receive are your money; security deposits that you receive are the tenant’s. You’re holding it in trust on their behalf, so you have a legal duty to safeguard it. You can only withhold it under very specific circumstances: to compensate you for damage to the property.
Writing about personal finance and investments since 1999, Jason Van Steenwyk started as a reporter with Mutual Funds Magazine and served as editor of Investors’ Digest. He now publishes feature articles in many publications including Annuity Selling Guide, Bankrate.com, and more.