Learning new things at eviction court

Learning new things at eviction court

 

We are 0 for 2 in magistrate court this month. How’s that for starting a real estate investor column?

 

Truth be told, we didn’t lose both cases. They got dismissed. The first one, which took place about two weeks ago, I wrote about in “COVID, cabinets and courthouses.” But we had to go again for a different property this week.

 

During COVID we have been more lenient with tenants on late payments than we have been in the past. We’ve waived late fees and made payment arrangements when needed. My office manager, Marybeth, even went above and beyond by helping tenants apply for stimulus money and for unemployment in some cases.

 

But we only went above and beyond if the tenants were doing the other jobs of a tenant. If you’ll recall, there are four jobs, and they are as follows: 1. Take care of the house. 2. Pay on time. 3. Be comfortable to work with by staying in good communication and being respectful. 4. Be a good neighbor.

 

We are in some strange economic times. So, paying on time became a job that might not be readily accomplished for some people. If that was the case with one of our tenants, but they were keeping the house up, being a good neighbor and staying in good communication about their finances, we were glad to work with them.

 

The reason we were filing for dispossessory this time was twofold. One, the tenants were behind on their rent. As I just stated, we would’ve been willing to work with them if a bigger issue hadn’t presented itself, which was that they were not communicating.

 

And once we started looking at the property log, we noticed they really hadn’t been communicating well since they moved in, which was just prior to COVID.

 

 

This lack of communication came to a head last month and we informed the tenant that if they did not start doing better, we would evict due to violation of lease.

 

You may be wondering how we can do that. Well, the first thing on our lease says is, “The following are the terms and conditions of this Residential Rental Contract.” And then, we list the fours jobs and state that if the tenant fails to perform those jobs, we will be forced to ask them to leave.

 

These folks didn’t pay on the first, and they didn’t communicate, so we filed for eviction.

 

While preparing my timeline for court, I went all the way back to when the tenants moved in and showed how time and time again, they hadn’t performed with communicating and paying on time. I showed how we told them last month that if they failed to communicate again that we would be forced file dispossessory on them. I thought the timeline was concise and ironclad.

 

On the day of court, I went over all the bullet points with the judge, showed him how keeping the four jobs was part of our lease, and that these tenants were in violation.

 

But we had an issue. We switched to a new property management software called Buildium this year. We had it set up so tenants could pay early on their accounts. Somehow, that function also made it such that a tenant could make a partial payment, even if they were in default. The tenants had done that prior to court. And because we had “accepted payment,” even though we hadn’t intended to, the case got dismissed.

 

You’re always learning something new as a landlord.

 

 

Speaking of learning lessons, the judge said something you should know. As we were going over the late payment history, he said it appeared as if we were setting a standard for accepting late payment. I told the judge that we had been cautioned by the court not to do that in the past, but that this year we had to be lenient due to COVID circumstance with payments and because the courts themselves had been shut down.

 

I asked what we should do to make sure we aren’t penalized for that lenience in the future should we have to go back to court. The judge said that we should send out a letter to all of our tenants letting them know that the late payment leniency was only during COVID shutdown and had now come to an end. And in court, we should only reference late payment history after the date that letter was sent.

 

That was another good learning lesson and I thought you landlords should know.

 

Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.

 

 

6 comments

  1. I have a friend that says it’s all in how the partial payment is applied. He applies it to the existing late fees and not to rent.

    1. That is a good way to do it. My lease says the same thing. What I understood from the court case was that once we filed, and named an amount, to accept any payment voided the case because the courts view is that we have now entered into a repayment arrangement and they can’t evict if that is the case.

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