When to Lay Down the Hammer and Start Eviction Process

Question

Hello BP Community!

We own 4Plex's in Alabama and so far so good. We do however have one tenant who is about to be 20 days late on their rent. I was wondering how soon do you start the eviction process? My thoughts are this: If they are late and are paying late fee every month who cares. However, once a tenant is ONE month behind this may be the time to start? Also, in Alabama I believe you can start the process once they are 7 days late (obviously will read up on the info if the time comes).

Thanks for the opinions!

Darren Budahn · Answer

How can you say buying a 4plex was likely your first mistake?  Do you know any information about the property whatsoever?

Denise Evans · Answer

Hi Josiah, First, what a great market you are in! I just heard the news about future NASA plans in Huntsville. Congrats!

Regarding evictions, you should issue a Notice of Default and 7-Day Opportunity to Cure notice on the first day the tenant is in default. Depending on the wording of your lease, that is usually the first day on which a late charge is due. The exact wording of your lease on this point could be very important.

In Alabama, you cannot file an eviction lawsuit until you have issued the 7-day letter and the tenant does not cure in time. The longer you wait to send the letter, the longer you are delaying your ability to file an eviction. You don't have to file, but at least you can, if you decide to evict.

In a typical lease, the rent is due on the 1st and late on the 6th. Your notice letter would go out on the 6th. That is counted as Day "0".  The 7th of the month would be Day "1."  The tenant can get current, plus late charges, all the way until Day 7, which would be 13th of the month in my example.  You can file your eviction lawsuit on the 14th, unless the 13th is a weekend or holiday. In that case, the first business day afterwards is counted as Day 7.

Just because you are allowed to file an eviction lawsuit that quickly, doesn't mean you need to do it on Day 8 after the notice letter.  I like to send out a Notice of Termination letter on Day 8. It tells the tenant I am serious. It is usually a "Call to Action" and causes the tenant to call me. Ideally, that is what I want.

You can continue to talk to them during that time period, and discuss payment arrangements, but make it clear the clock is ticking down. If you agree to give them extra time--say, until the 18th--then you and the tenant should sign a Forbearance Agreement. It can be as simple as a letter both of you sign. It would say the tenant acknowledges it is in default, you have given them additional time cure this one time, but if they don't get completely current by the agreed date, then you may start eviction proceedings immediately.  You do this because you want the tenant to understand you don't have to give a NEW 7-day letter if they don't pay by the agreed date.  But, unless you put this in writing and both of you sign, a judge might make you start your notice all over again.

Also, most landlords get some sort of payment in connection with the Forbearance Agreement. The agreement should acknowledge that partial payment, and also say the landlord is not accepting that as payment in full, it does not cure the default, and the landlord is under no obligation to accept partial payments in the future.

If a tenant does not cure within the time period, but then you agree to let them get caught up later, think about requiring the tenant to sign a new lease as a condition of not evicting them. The new lease might be more restrictive than the old one. It might make the rent due on the 1st and delinquent on the 2nd. The rent might be slightly higher because the tenant is a risker tenant. You might require  a guarantor.  Whatever you can get to make yourself feel safer in your future rent payments.

If you will consistently issue 7-day default letters for all of your tenants when they are late, you will see timely rent payments improve.  Some tenants will become offended if they are late one month and receive the default letter. You should explain that you recently learned you must do this consistently whenever a tenant is technically in default, otherwise you might be vulnerable to Fair Housing complaints. That is actually true. If only some tenants receive default letters, then you run the risk of some tenant claiming you treated them more harshly because of their race, familial status, disability, etc.

Good luck!  Let me know if you have other questions.

Account Closed · Answer

@Josiah Cooper

If they seem receptive to it, you might try paying them to leave the property.  An eviction will likely cost you in excess of $5K so if you can get them out for less than that, it might be worth a try.  There are lots of pro deadbeat renters who work with deadbeat attorneys...they pay YOUR rent to their attorney to fight you in court, while living rent free.  Then they move on to the next unsuspecting landlord and do it all over again.

Account Closed · Answer

I'd start evictions immediately after the rent is 5 days late.  Get them out ASAP!

Despite your hopes, they will not turn into good tenants.  You must screen and attract good tenants.  If they pay late, learn your lesson and be more diligent in your screening process next time.

It's an expensive lesson.  Hire a lawyer and evict them.

Richard C. · Answer

Yes, apartment complexes absolutely do reach out to tenants.

Darren Budahn · Answer

Have you at least reached out to the tenant and asked for an explanation?  Obviously, if they haven't paid rent you can start the eviction process, but I would at least ask them what is going on.

How long have they been a tenant of yours?  I think it makes a difference if they have been a long term tenant (years) and this is the first time they haven't paid versus a newer tenant who all of a sudden isn't paying.  Did the tenant reach out to you to let you know they would be late on rent?  I don't the law in Alabama but I'm fairly certain you could start evicting at this time, but I guess I would want more information about the situation to find out what's going on.  Obviously, if they aren't paying or aren't responding to communication from you, by all means, I'd start the process of getting rid of them.

David Wurzel · Answer

Account Closed

Amen brother! Amen

Jesse Waters · Answer

Didn't real all the other post, but, our standing rule is that rent is due of the 1st, and late on the 5th, which allows for a long weekend/holiday, whatever.  If a tenant is going to be late they have to tell us before the 5th.  We have some that pay late every month, we have come to accept that fact & get their late fee every month as well.  However, if they say they will pay by the 10th and don't then we file for eviction the next day.  Same for everyone else, if they don't pay on the 5th we are at the courthouse on the 6th or first business day after.  For them to have the eviction lifted they have to:

-Pay the full rent due

-Pay the late fee

-Pay the eviction filing fee $85 usually.

Not to sound like a punk, but this is one area that we don't play around with, we take it seriously & express to tour tenants that they should as well.

Kelly N. · Answer

Wow.  Some people are stuck on their SFRs, aren't they?

I would serve notice once they are 5 days late.  In our leases, rent is due on the 1st, late if not received on the 5th or before, I am mailing notices to pay or quit on the 5th.  You are either getting a jump on the process or scaring them into paying on time in the future- you want rent to be paid before everything else, right?

Kelly

When to Lay Down the Hammer and Start Eviction Process

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