Landlords and tenants who openly communicate can negotiate an amicable tenant eviction.
When you first became a landlord did you have a clear idea of what the process of renting a property would look like?
Did you have the “Landlord Ideal” as we call it of how perfectly it would all work?
I did. And I had it all figured out. I would buy the property and have it rent ready in 60 days. Then I would run an ad, show the property for about two weeks, and have lots of interested potential tenants. I would end up with three serious applicants. I would have one that had great income to debt ratio, a great credit history, good references, and that would be interested in renewing their lease year after year. And then…. I woke up!
Even perfect tenants can run into problems
For any of us that have been in the business for long we know that this perfect scenario rarely exists.
Those who begin as the “perfect tenant” often have crises and drama in their lives that no one expected. What is a Landlord to do?
A job loss can create a crisis but a negotiation opportunity as well
One of my fellow rental property owners relayed his story to me over lunch last week.
He had a tenant who had originally come to him with a favorable job history and reasonable credit score. The tenant had paid the rent in a timely manner for the last year. It was a landlord’s dream until a few weeks ago when the company he worked for went out of business and gave no notice.
Because this particular business was a large employer in our area he knew that he would have a hard time finding a job because the job market was going to be flooded. The landlord feared for the worst when he heard the news but did not call the tenant until he was past the grace period set in the lease for rent payment.
The tenant assured the landlord that he was pulling money from his 401 K to cover the next couple of month’s rent. When the landlord hadn’t heard back from the tenant by the 10th of the following month he called again. Unfortunately, it became clear that the tenant was not going to be able to handle the current lease structure and rent payment and it was time to be creative and begin to negotiate out of the lease in a way that would be best for both the tenant and the landlord.
Stay on top of your business with communication with the tenant
There come times that it is just best to face the fact that the current tenant will not be able to meet their obligations and find a way to move on.
In the case where a tenant just cannot afford the rent it is best to negotiate other options. The two parties decided that it would be best for the tenant to clean the property, begin packing, and allow the landlord to market and show the property beginning immediately.
The tenant began to pay on a payment plan (that the landlord added as an amendment to his lease) and his deposit covered the cost of damages for finding a new tenant for the property. Because of the ongoing communication neither of the parties were harmed. The landlord was paid and the tenant’s credit was not harmed.
The worst thing a landlord with a problem can do is to bury his head in the sand and pretend it isn’t happening. It may be uncomfortable at times to continue to communicate, but it isn’t personal. It is business.
Throughout the negotiation process when working with a tenant, it is important to give the correct legal notices. There is a library of forms available to ARPOLA members on the association Web site, www.ARPOLA.org. Log in to the member area and click on the “Forms” link found in the member menu.
Keep everyone focused on the timelines by using the correct notices. Continue to provide great customer service by communicating directly with the tenant. Explain exactly what those notices mean and what the possible solutions might be. Work towards a win-win that not only boosts your reputation but protects your bottom line.