Oakland, California: Eviction Pre-Trial Settlement Questions

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Oakland, California: Eviction Pre-Trial Settlement Questions

Doug Huggala
Member since 2018 · 4 posts · 3 votes

Hey there,

Background

I'm a first time landlord. I have a tenant in a rent controlled unit who I tried working with for several months but unfortunately stopped paying rent. We served a 3-day notice and a summons, which they answered. They are claiming the unit is "uninhabitable" (The unit was recently re-modeled, inspected and appraised within the last 12 months!) and that they stopped paying rent because of that. They never gave us any notice that they had any issues with the unit prior to the answer to summons. They have free lawyers from the  East Bay Community Law Center.

Question
We have our pre-trial settlement conference tomorrow. What should I expect? How likely are we to actually go to the jury trial they have requested? As far as I'm concerned, they have no case. Our lawyers seem to think that it doesn't matter that they don't have a case; a jury will be sympathetic to them as tenants and wants us to find some sort of settlement that allows them to stay on a stipulation or to give them anywhere from $5k and four to five months rent free before vacating. This seems like legalized extortion to me.

I'd love to hear any feedback from anyone who has gone through this before.

1Reply
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Arlen Chou
Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
7y

@Doug Huggala been there done that 3 times in Oakland within the past few years.  I won't go into the details of my issues but I have dealt with EBCLC and their play book is pretty open.  The Alameda system is really set up to force people to negotiate.  They stack their calendar so you could burn a ton of time each time you go.  The settlement conference is the very first step.  You basically show up and burn time.  Since your post came out yesterday, I assume you have already gone through this and hopefully settled.  But in case you have not, you could push on the 90 days and drive that down to 30 or 60 days.  

What you have to understand is that your tenant probably does not have any money or assets for you to go after, so dragging this thing out could be a waste of time.  You could fight this and potentially win, but you will go through at least 2 more days where you are sitting at the Alameda County Court house in Hayward to basically get an actual trail date.

In my case I was fighting for 6 digits of $ so it made sense to fight it.  But if you are fighting for a few thousand dollars, it might be better to negotiate the date they vacate. I would push for the mutual waiver.  Typically it is also in the best interest for East Bay Community Law Center to negotiate a quick conclusion.  They usually roll in with a dozen or 2 dozen cases on the docket that they have to handle with a handful of lawyers. They have to process these things like Big Macs and they don't want to take this to actual court unless they have a strong case.

Explain to your attorney that you don't want any loose ends once this is complete.  Therefore, you need the waiver.  Push them for a faster move out, EBCLC should also be anticipating this and they will probably push their client in good faith to settle.

Yes it sucks and it is wrong, but your focus should be to move forward as fast as possible. I am personally looking forward to December 1st, when my last problem tenant will have moved out of Oakland!

Good luck to you!

-Arlen

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  • Ricardo P.
    LakeWood , CA · Member since 2018 · 268 posts · 331 votes
    7y

    Doug, 

    Your lawyers are correct on this. Your most likely NOT going to go through a jury trial. They do this as a scare tactic to get money off you. That’s how the defendants “free” attorney gets paid. Going through a Jury trial is not only expensive for both sides but time consuming aswell. It’s always cheaper to pay them off and continue with your life. It’s unfortunate you have to go through with this. 

    Extortion at its finest forsure! 

    Please let us know how it played out. Best of luck to you! 

    0Reply
  • Doug Huggala
    OP
    Member since 2018 · 4 posts · 3 votes
    7y

    UPDATE: their freebie lawyers have offered us a settlment of forgiven back rent (2 months) along with an additional 90 days rent free (5 months free rent in total.) 

    I'm being told by my lawyers that this is a "good deal" and that any judge in the area would suggest I take it. It hardly feels like a good deal to me; they only paid rent for 5 months. This feels like I'm refunding them for their entire stay here.

    I'm also being told that even if we were to win a jury trial, the courts are so backed up right now and the holidays are approaching, we might not even get them out within 60-90 days. Really over a barrell here. Does anyone have any experience doing better than this? Or is this really my "lucky" day? 

    Additionally, the tenants seem to want to refuse a mutual waiver of claims. This bothers me; it's usually landlords who don't want this so they can collect back rent. The fact that the TENANTS don't want it makes me suspicious that they already have a lawsuit in their back pockets.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    It doesn't matter if you are right or wrong. If your attorney says it's better to accept the deal, then accept the deal and be done with it.

    If this happened in my state, I'd have no qualms about fighting it because judges actually read the law and determine guilt or innocence based on facts. You may want to consider selling and buying in a state that doesn't destroy your ability to earn an honest living.

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    0Reply
  • Doug Huggala
    OP
    Member since 2018 · 4 posts · 3 votes
    7y

    @Nathan,

    Alas, as much as that would make a sounder investment, California is my home state. And we purchased this property specifically because it is just two miles away from my aging mother. We have tenants to help pay the mortgage and keep ends meet, not as a full-time job. But at the loss we’re at now, I’m not sure if it makes financial sense to risk another situation like this again. We may leave the unit vacant.

    0Reply
  • Account Closed
    Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    7y

    @Doug Huggala, ignore the advice above.  Neither of them have dealt with Oakland nor Alameda county courts.

    @Ricardo P. is incorrect - if the tenants have requested a jury trial, 100% it will be granted. This is a scare tactic used by the EBCLC, and it works. It will cost you several thousand dollars extra if this goes to a jury trial. And judges usually grant it. 

    The offer presented to you is fair, considering what the worst case scenario could be. I would give them the 3 months rent in a heartbeat (while signing a cash for keys agreement). I've seen judges give 12 months of free rent to a non-payer. I wouldn't consider this your lucky day, but to get someone out for less than $10K is a winner. Do it. 

    @Nathan Gesner I generally agree with your posts and respect your advice/opinion, but the CA bashing is uncalled for. CA law does not "destroy your ability to earn an honest living". You just have to work within the laws. Yes the laws are very tenant friendly, and yes sometimes we have to sidestep our ego and perhaps give a tenant a few thousand to move. But it's well worth it when you consider the high rents we are receiving and of course, the huge appreciation gains. 

    3Reply
  • Doug Huggala
    OP
    Member since 2018 · 4 posts · 3 votes
    7y

    @Account Closed: thanks for the reinsurance. we offered them cash for keys for the value of 90 days to get them out faster but they didn’t take it. They wanted to stay for the full duration of the 90 days. They will probably go over and we’ll be given judgement and procession.

    I get it. There’s no way in hell they’ll find something at this price in this area; we gave them a great deal because we wanted to help out a young family. Big newb mistake. We’ll never do anything like that again. And I doubt they’ll find another newb to rent to.

    I’m not feeling “lucky” but grateful for the certainty. I just want these people out of my damn backyard already. 

    2Reply
  • Arlen Chou
    Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
    7y

    @Doug Huggala been there done that 3 times in Oakland within the past few years.  I won't go into the details of my issues but I have dealt with EBCLC and their play book is pretty open.  The Alameda system is really set up to force people to negotiate.  They stack their calendar so you could burn a ton of time each time you go.  The settlement conference is the very first step.  You basically show up and burn time.  Since your post came out yesterday, I assume you have already gone through this and hopefully settled.  But in case you have not, you could push on the 90 days and drive that down to 30 or 60 days.  

    What you have to understand is that your tenant probably does not have any money or assets for you to go after, so dragging this thing out could be a waste of time.  You could fight this and potentially win, but you will go through at least 2 more days where you are sitting at the Alameda County Court house in Hayward to basically get an actual trail date.

    In my case I was fighting for 6 digits of $ so it made sense to fight it.  But if you are fighting for a few thousand dollars, it might be better to negotiate the date they vacate. I would push for the mutual waiver.  Typically it is also in the best interest for East Bay Community Law Center to negotiate a quick conclusion.  They usually roll in with a dozen or 2 dozen cases on the docket that they have to handle with a handful of lawyers. They have to process these things like Big Macs and they don't want to take this to actual court unless they have a strong case.

    Explain to your attorney that you don't want any loose ends once this is complete.  Therefore, you need the waiver.  Push them for a faster move out, EBCLC should also be anticipating this and they will probably push their client in good faith to settle.

    Yes it sucks and it is wrong, but your focus should be to move forward as fast as possible. I am personally looking forward to December 1st, when my last problem tenant will have moved out of Oakland!

    Good luck to you!

    -Arlen

    5Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    I'm sorry to offend you but he did nothing wrong and he's about to lose half a year's income, possibly more, all because of California's liberal policies. This situation wouldn't exist in the vast majority of states.

    Investors can learn the laws and do better than an amateur but they will always be at a disadvantage and always flirting with disaster because it's heavily regulated, litigious, and the courts and attorneys are primarily leftists.

    I know an investor that bought houses and apartments back in the 70's so he has 40 years experience and was worth about $30 million. He got hit with a frivolous lawsuit over a Fair Housing issue. He spent nearly $500,000 and years trying to fight it before his attorneys finally advised him to settle because they didn't think the court would give him justice. He sold the properties and walked away with less than half his net worth intact.

    All that appreciation comes with a price and I hope you learn that before you have to pay the Piper.

    The DIY Landlord Book4.7248 Reviews
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    3Reply
  • Albert Ng
    Rental Property Investor · San Jose, CA · Member since 2015 · 401 posts · 221 votes
    7y
    Originally posted by @Doug Huggala:

    @Account Closed: thanks for the reinsurance. we offered them cash for keys for the value of 90 days to get them out faster but they didn’t take it. They wanted to stay for the full duration of the 90 days. They will probably go over and we’ll be given judgement and procession.

    I get it. There’s no way in hell they’ll find something at this price in this area; we gave them a great deal because we wanted to help out a young family. Big newb mistake. We’ll never do anything like that again. And I doubt they’ll find another newb to rent to.

    I’m not feeling “lucky” but grateful for the certainty. I just want these people out of my damn backyard already. 

    I think one of the biggest mistake that most landlords made is being too nice to tenants. Boy, I'm glad I'm not in your shoes. I would say pick a good local lawyer and follow his advice. Write it off as an expensive lesson, and remember to screen for better tenants. For me, I would leave the house empty for a few months to get a good tenants, rather than just take the risk with a bad one.

    By the way, if you agree to let them stay for free, remember to have a lawyer review the agreement first. Else, they can come back after 3 months and ask for another 5 months. It sounds like you have a professional tenant.

    0Reply
  • Rob D.
    Investor · Riverside, CA · Member since 2015 · 280 posts · 111 votes
    7y

    I’m sorry this is happening to you. Unfortunately you’re between the proverbial rock and hard place. You have a crap bag tenant who knows how yo squeeze you. So he’s gonna get 3/6 months free rent. Which is very unfair. You’re most likely going to have to agree to the terms. If you want them out in a reasonable time. You dint have to. You can go to court, hopefully they get evicted and it goes on their record.

    Can I ask you how you came to the decision of taking these people as tenants? I decline about 80% of the applicants I get based on credit or income requirements alone. I rarely get to the criminal bg check. I guarantee you that these people have done this before. These people may be professional tenants. 

    My suggestion is once you get these people out you set up a screening process that gives you the better tenants. First things I check is credit, income, employment and criminal/court records. If they don’t all mesh together the applicant is declined. I used to never do checks. I just went by “this person is ok” thinking. 

    Trust me it cost me 60,000 bucks to learn otherwise. I’m ruthless when it comes to acceptance. I’ve bec9ne immune to sob stories pleading and people’s plight in general. If you’re gonna do this LL thing you need to toughen up and rethink your business.

    One thing you can do is go to court and research the person and see if they were involved in any lawsuits with this subject matter. If they were, you will have a person  who is a professional tenant. 

    Does anyone here find it amusing that they claim the property is uninhabitable yet are willing to live in it for another three months?

    0Reply
  • Jerome KaidorPro Member
    Investor · Hayward, CA · Member since 2013 · 122 posts · 65 votes
    7y

    "Uninhabitibility" - they ALWAYS check that off on the form.  

    0Reply
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