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Reconcile the Security Deposit
The Ins and Outs of Tenant Screening
By George N. Skidis, Jr.
Whether the tenant leaves voluntarily or by legal force, you need to deal with the security deposit. Whether or not you are entitled to keep the deposit, you must comply with the state law.
In most states you must return the security deposit within a required number of days or send a certified letter to the tenant stating why you are keeping it. Even if you are entitled to keep the deposit, your failure to comply with proper procedure will result in a lawsuit against you for improper withholding. You can always sue the tenant in small claims court for rent owed and damages to the property, but you cannot withhold the security deposit without the following rules.
The only way to win an eviction is never to need one. Once the eviction procedure is started your goals should be minimizing your lost rents, stopping your damages, limiting your expenses, obtaining a monetary judgment and recovering your property.
As an investor working with tenants, you should be very familiar with the eviction laws where you do business. These basics of these laws apply to your property whether you are renting it out, sandwich leasing, lease optioning or selling bond for deed. Corporations, which are legal entitles, but not physical persons, must hire an attorney to represent them. Private individuals, sole proprietorships and individuals doing business under an assumed name or DBA can represent themselves in court.
I recommend that you learn the landlord tenant laws and the timetable for evictions in your county, even if you are a corporation. If your business is not a corporation, and you have any doubts as to how to proceed, hire an attorney. You should probably hire an attorney to handle your case the first few times just to see how it is done. Landlord tenant law is not difficult to understand, but it is very technical.
A minor flaw in your paperwork or filing, or conduct could mean having your case thrown out. Being thrown out means you get the luxury and expense of starting all over and the tenant gets more free rent. Thus you should consider paying an experienced landlord-tenant attorney to do the job. Make sure it is an attorney that specializes in landlord tenant law.
An eviction proceeding is known by various names depending on what part of the country has jurisdiction. In Saint Clair County, Illinois is referred to as “Forcible Entry and detainer” but I have also heard it called a “Summary Proceeding” or “Unlawful Detainer” proceeding. In any case the plaintiff (property owner) is filing a lawsuit against the defendant (tenant).
The purpose of the lawsuit is to obtain a court order to permanently remove the tenant from the premises. A “Forcible Entry and detainer” called an F.E. & D. lawsuit is the only way to legally remove any and all tenants from the premises.
There are many ways to illegally remove a tenant from the premises.
Such an action is called “Constructive Eviction”, those days are over. No matter how much they owe you or how emotionally charged the situation is, don’t even consider trying it. It is illegal to physically or constructively remove the tenant from the premises. You cannot change the locks, shut off the power, and remove an exterior door to repair it, board up the house, place fake condemnation placards on the dwelling or other similar action.
Before you can commence the proceeding, you need to terminate the tenancy; you do this by serving notice on the tenant as required by your state law. For nonpayment of rent, the notice can be a three or five day notice depending upon jurisdiction. It frequently has a heading such as “Pay Rent or Quit”.
When serving a “Pay Rent or Quit Notice” never include the day of service in your calculations of the time period. If notice is properly served on the 10th of the month, the time period starts on the 11th In this case five days would expire at midnight on the 15th
On the sixth day after serving a five day “Pay Rent or Quit Notice”, if the tenant has not paid the rent in full or moved out after that time, you can commence legal proceedings to recover possession of your property. This means your case can be filed anytime after the 15th I normally wait an extra day or so before filing, some judges like patient gracious property managers.
TenantDetective.com has an instant online tenant screening service that lets you check criminal and eviction records instantly.
Another good way to handle evictions (or the avoidance thereof) is to offer the tenant a financial incentive to leave (without the costs of eviction added to their bill). You might consider a cash incentive of $50.00 now (to rent a moving truck) and $50.00 when they have completed the move and left the unit clean. The exact dollar amounts are variables that you determine. Just remember, an all out eviction is expense no matter what!