For over four years my wife and I have enjoyed the benefits that come with owning rental real estate. The extra income each month has allowed us to reduce the debt on our personal mortgage and help cash flow Mrs. Luke 1428’s recent grad school education and career change. Granted it has been one tough side hustle, no more so than this past spring when we were forced to maneuver through one of rental real estate’s darker sides…the process of evicting a tenant.
No one ever thinks about evicting a tenant when they sign the rental agreement. We trust our background research and intuition about the person we’ve selected to fill the property and we expect the tenant to honor their part of the rental agreement. We provide them with quality lodging…they pay us for that service. What could possible go wrong with such a simple arrangement?
Plenty. Especially when the tenant sees an opening they feel like they can take advantage of.
The Joy of Rental Repairs
One such opening came the day I received a phone call a few days after a new tenant had moved into one of our properties. He claimed there was no water. I immediately called our well support team who was there within the hour to investigate the situation. Perhaps it’s just a loss of water pressure in the well pump. That’s not uncommon and easily fixable.
Turns out it was a water pressure issue which the well company fixed that day.
However, upon closer inspection during the repairs we found that our shallow well was slowly dying of its water reserves because of multi-year drought conditions. We determined that over the long term, the only workable solution for the tenant and our property was to drill a deep well, hundreds of feet down into the bedrock where there is a virtually unlimited supply of water. We hired a company and the drilling and well installation took place within 2 weeks.
Major, unexpected dollars poured into our property. Thankfully, we had a business emergency fund for such issues. So problem solved, until…
The next phone call came a week later saying the toilets were continually running and the water flow from the several faucets was irregular. Evidently during the drilling of the well, silt had managed to be flushed into the water line between the well and the house. When the water was turned on, the silt flowed into the house and became trapped in the mesh of the faucet valves and in the toilet flow valves, thus causing them to function improperly.
Our plumbing support team quickly jumped on this issue and resolved it within days. After the repair, I heard nothing from the tenant as to further problems. In the meantime, we had a filter installed at the well pump in order to prevent the flow of silt to the house.
Rental life back to normal – until it wasn’t.
Show Me the Money
In May, I received no rent from the tenant. So as any good property manager would do, I gave him a courtesy call to find out what life issues had crept up that prevented him from paying rent on time. That’s when the excuses began.
At first, he apologized and said he would make arrangements to make payment the next day. No rent came the next day, so there was another phone call made. This time he said he hadn’t been able to get off work in time to make the payment.
Late fees are beginning to accrue now and red flags are flying around in my brain. “Too busy to get off work to drop the rent payment in the mail? C’mon.”
The next time I attempted to reach him, I only received busy signals from his phone. Uh-oh.
Several days passed before we spoke again. In that discussion, it was agreed that he would pay for May and June in a couple of weeks. He revealed he had fallen on some hard times but would have all the money for those two months once he finished a job at work.
At this point I began to document everything. I sent him a letter stating what he owed me and when.
More Property Repairs
A week later, I’m on vacation with my family and receive a call from our now irate tenant that the plumbing issues have resurfaced. Evidently, there had still been some silt left in the water lines to the house and were causing the same problems we had before. I gave him the number to contact our plumbing support team and told him I would be back in town in a few days. I then called the plumbing company, to let them know of the situation and to expect a call from our tenant.
Our plumbers actually reached out to him with a phone call that he never returned. (It’s awesome to have quality team members on your side.) I arranged for the entire house to be flushed. Exterior water lines running from the well pump to the house were drained, the water heater was drained, and all the lines in the house were drained. I even arranged for the washer and dryer and the dishwasher to be checked by a qualified appliance technician to make sure there had been no damage.
At this point, I’m entirely confident our silt problem has been taken care of. And I still haven’t seen any money for two months. Even though:
1) we were never negligent and responded quickly to correct each issue;
2) he had never been completely without water;
3) he was never forced to leave the residence.
If At First You Don’t Succeed, Go to Court
Our tenant continued to stonewall us with the rent. He refused to pay us on the grounds that he was being inconvenienced by the water issues (even though at this point they had been completely resolved). We had no choice but to send him a Notice of Termination of Lease letter. It stated he was in violation of the rental agreement for non-payment of rent and had one week to move out or pay the rent in full. If he did neither of those things we would file an Affidavit of Dispossessory with our county magistrate court.
Think we saw any money?
Actually we did, the next day – but only partial payment.
So a week later when we had not received our full payment by the given deadline, I made one last courtesy phone call in an attempt to collect our money. His response – I’m at work and can’t take off to see you.
I filed the paperwork to begin evicting the tenant the following hour.
It’s now July. No rent payment that month either.
Evicting the Tenant: Seeing the Judge
The court process took several weeks to unfold. When evicting a tenant in my state, the tenant is given a week to answer the claim brought against him – basically to state his case as to why he hasn’t paid. His stated reason for nonpayment of rent rested solely on being inconvenienced by the water issues. That statement was true enough but I knew from reading our state’s Landlord/Tenant Handbook that this reasoning did not provide him sufficient evidence to win the case.
So a court date was set.
There were many other court cases slated for that morning in early August. The first thing the judge did was to instruct the parties of all the cases to meet together before the actual hearing – in one last attempt to settle the disagreement. It’s really in everyone’s best interests – including the courts – if parties come to an amicable agreement on their own. So we stepped into the hallway just outside the courtroom doors for one final negotiation.
I showed him the amount he now owed us, which was substantial, with months of accumulated late fees. Of course he didn’t have the money. I explained to him that according to our state’s landlord/tenant law he had no case and would lose if he forced me to present my case to the judge. The verdict against him would probably lead to the garnishing of his wages. He tried to come up with more excuses and sounded like he was willing to put our disagreement to the test.
“Who needs this?” I thought.
I had reached the point where I simply wanted him out of the property. It was time to move on. Clearly he was not a good fit and even if I had pressed the court case against him and won the judgment, I was positive he would be a continuing issue going forward for the remainder of the lease term. So I offered him a deal he could not refuse.
Complete forgiveness of all debts provided he was gone in two weeks. If he didn’t move in that time frame, I’d file another court order so I could hire the sheriff to come and forcibly remove him.
He didn’t think twice before signing.
Twenty minutes later we had filed the paperwork with the clerk of courts, talked to the judge about our settlement and wished each other well.
Two weeks later he moved out and I had my rental property back.
Evicting a Tenant Lessons
What an ordeal! In retrospect, I don’t view it negatively. Yes, I didn’t enjoy it when I was going through it. But the experience forced me to grow up as a landlord and taught me some valuable lessons. Here is what I learned through evicting a tenant:
1. Document every potential issue that comes up. Keep a running file on each tenant with summaries of conversations, issues and disagreements. This documentation can be used as a reference in court when evicting a tenant.
2. Fulfill your obligations as the landlord to complete repairs in a timely fashion. Refuse to let things slide that you need to take care of. Be prompt and responsive to the tenants needs so they can’t claim you’ve been negligent.
3. Keep records of all receipts and work orders that prove work was done at the property.
4. If you can’t afford to miss 3-6 months of rental payments from the tenant, you shouldn’t be investing in real estate.
5. The court system exists to back you up as a landlord. Utilize it. Evicting a tenant is a hairy process so be prepared to present your case. But don’t bluff your tenant by saying you will take them to court if you are not fully committed to going there.
6. At some point, landlords have to be a bit cold-blooded. I believe in being fair and even generous at times. But this is my side business and I want it to be successful. If a tenant flaunts the rental agreement, they need to go.
This experience didn’t irrevocably scar me from being a landlord. I still love the business and the ability I have to help people meet their housing needs. And it shouldn’t scare anyone else from investing in rental real estate.
But nonpayment of rent is a reality of the business that most people don’t consider. Ask yourself, “Would I be comfortable with evicting a tenant?” If you don’t have the fortitude to handle such a crisis, you’re best to invest your resources in some other way.
Questions: Any other landlords have experience evicting a tenant? Does my story change the way you view rental real estate? What’s your worst landlord/tenant horror story?
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