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I have been a real estate investor for 20 years or so and I have been a part of many evictions. I am also a real estate broker and I used to sell foreclosures for banks. I have been part of evictions for my own properties and for bank-owned properties as well. In some cases, an eviction is needed and there is no other way to handle a problem tenant. However, there are many cases where evictions can be avoided which saves the landlord money and time and can be easier on the tenant as well. Many of the strategies I learned from how the banks handled evictions during the last housing crash.
What is an eviction?
An eviction occurs when a tenant, a former owner, or sometimes a squatter occupies a property and will not leave when the owner of the property wants them gone. There are many reasons that an owner of a property will evict a tenant such as:
- Nonpayment of rent
- Code violations
- Nonpayment of utilities
- Former owner of a property refuses to leave after selling
- Former owner of a property refuses to leave after foreclosure
- The lease expires and the tenant will not leave
- Damage to the property or lease violations
- Criminal activity at the property
- The property is sold and the new owners want to move in but the tenant will not leave
Every state handles evictions differently but the owner of the property cannot just take the property back themselves or kick the tenants out with some hired muscle (at least legally). The owner of the property must post a notice of what the tenant needs to do (pay rent, leave, or clean up the property) before a certain date, and if that is not done the owner can go to court and ask for the eviction.
The court can approve the eviction or may set a hearing or may refuse the eviction. If the eviction is approved, usually the sheriff is notified and they will perform or assist with the eviction. At the eviction, the doors are opened. Any occupants still there are escorted out of the property, and their belongings are removed as well. What is done with those belongings varies by the state you are in. Once the belongings and occupants are out of the property, the owner has possession, can rekey it and the occupant is not allowed back in.
How do evictions work in Colorado?
In Colorado, the sheriff will show up at the eviction to make sure there are no problems but it is the property owner’s job to change the locks, remove any belongings, and those belongings are left outside in the yard or somewhere accessible for 24 hours. The law gives us one hour to move everything out which means the sheriff usually requires us to have at least 10 guys at every eviction. After 24 hours, the owner of the property must remove the items or take them to the dump. In some states, the owner of the property may have to store those belongings for 30 days or even longer. Make sure you check on your state laws for how the evictions work there. I personally use a lawyer to make sure I do not mess anything up or break any laws.
What are no-cause evictions?
Some states like California have made it harder to evict tenants. They try to discourage no-cause evictions, which is when a tenant is on time with rent and is not causing any problems but their lease is up. Owners can perform no-cause evictions in California but they may have to pay for relocation assistance. In other states, the owner can evict if the lease is up and the tenant will not leave without any extra costs (except eviction costs, of course).
This article goes into more detail on California rent control and tenant laws.
How much does an eviction cost?
An eviction can cost a few hundred dollars or tens of thousands of dollars depending on the state and the situation. I once had an eviction where I had to evict the tenant and 500 tires he brought onto the property after he was evicted from his tire store!
There are multiple reasons an eviction will cost more or less:
- If you use an attorney you could pay $350 to $5,000 or more depending on the time needed from them.
- You will have court costs that are usually pretty minimal.
- You will have to pay for your crew to empty the property in most places.
- You will have dump or storage fees for their things.
- There is the cost of lost rent and maybe repairs to the property.
- There could be relocation fees you have to pay to the tenants.
- There is the chance the tenants could sue you for breaking their things, injuries, or who knows why else (this happened to my sister).
An eviction could cost $500 to complete but the total cost from those occupants who won’t leave is usually in the thousands and maybe more depending on the situation.
How long does it take to complete an eviction?
The time it takes to complete an eviction varies in each state and even in each city. We also had situations like covid moratoriums where evictions were stopped in some areas or on certain types of properties across the entire country. Even with the COVID moratorium, some evictions could be completed. The eviction ban was not on every property and for every reason. I completed an eviction in Colorado in 2020 for code violations. The tenants were also not paying rent, but their yard was full of junk and the city was fining me for it. I could not evict for back rent, but I could evict for code violations.
Since covid, it has gotten much harder to evict in many areas of the country. We can evict in Colorado in 30 to 60 days now and before it was usually 30 days maybe even a little less. However, some states are seeing evictions take almost a year or even longer! This site gives some data on the time to evict but I know it can take much longer in some states! https://ipropertymanagement.com/guides/how-long-does-it-take-to-evict-someone
Different situations can also make it tougher to evict. I have a property in Cleveland and most people there will tell you the judges do everything they can not to evict tenants. I have been trying to evict tenants for over a year but the property is in my IRA, and it is not registered in Ohio, which means I cannot evict, and it is a giant mess!
How do banks use cash for keys to avoid evictions?
When I sold foreclosures, I would have to deal with a lot of people who still lived in the home after the bank took possession through foreclosure. If they were a tenant and had a valid lease, they could keep living there if they kept to the terms of the lease. If they were the old owner of the home, the bank would want to remove that occupant so they could sell the home. They would offer the occupant cash for keys to move out. There were some instances where a bank would sell a house occupied by the former owner still, but that was rare. I bought a house like that at an auction once and then I performed the cash for keys.
When a bank offers cash for keys, they will offer the occupant $500, $1,000, and sometimes even $5,000 or more to vacate the house in a certain amount of time. The bank will not give that money to the occupant until they are completely moved out and the home is in “broom-clean condition”. They have an agreement that lays out the conditions and if those conditions were met, I would be the person who inspects the property, get the keys, and pays the previous occupant. Broom clean condition meant the house was free of all debris, trash, and furniture, and was relatively clean. The occupant did not have to make any repairs but they had to get all their stuff out of the inside and outside of the house.
Some banks were lenient on what broom clean condition meant and others were very strict. If a house still had furniture in it or trash, I was told not to give the tenants their checks. If it wasn’t perfectly clean most banks were okay with that. The occupants usually had 30 days to move out with all of their stuff. While this was happening the bank would start the eviction process but hold off on executing any evictions until the 30 days were up. If the tenant did not leave, then they would proceed with the eviction.
How can landlords avoid evictions?
Evictions are necessary for some situations but if possible avoiding an eviction is usually the best option. I just mentioned one way to avoid an eviction and that is to offer cash for keys. If a tenant is behind on rent, or their lease is up, or if you buy an occupied house and you want the old owner to leave, you can try offering them money to stay.
In some cases, you may not need to offer money in order to avoid eviction. Tenants may get behind on rent and want to leave but they feel they are obligated to stay because their lease is not up yet. If you talk to the tenant, let them out of their lease, and allow them to leave they just might take you up on it. It can also help to talk to the tenant and let them know that an eviction will stay on their record in most areas and it will make it very tough for them to rent again.
When you start an eviction, you usually have to post a notice as I said earlier. This notice is often called the notice to pay or quit depending on the type of eviction. One way to avoid evictions is to let the tenants know you are serious and won’t put up with late rent or other problems they may cause. If they are always late on rent, and you don’t charge late fees or let them know that is not okay, they will keep being late. Eventually, they may get so far behind they can’t catch up.
If tenants are late, charge late fees, and let them know it is not okay and that can help stop the situation from getting worse. If they continue to be late, you can post the notice to quit notice to let them know you are serious. Posting the notice does not mean you have to go through with the eviction and works as a warning. If they don’t pay, the sooner you post it, the faster you can get the process completed if you do have to complete the eviction.
Of course, the number one way to avoid evictions is to take your time finding great tenants! Screen your tenants as well as you can and don’t just rely on your gut for who may be good or bad or take the first person who applies. This article goes into more detail on screening tenants.
Conclusion
Evictions will happen if you are in the real estate business long enough but there are ways to limit how many you have. I have owned rentals for many years and while I have a lot of eviction stories, most of my evictions are from inherited tenants. Inherited tenants are people who were living in the property when I bought I and I buy some crazy stuff that I know has problems. We rarely have to evict a tenant we place since we take our time screening those potential occupants.
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