True Stories: The Cost of Eviction
When someone says, “evicted”, do you picture notices posted on doors, courtrooms with stern judges, and piles of your tenant's abandoned junk? Those are realistic features of what can be a very unpleasant experience.
But have you ever thought about eviction in terms of the actual price tag? The legal fees, the court costs, lost rental income, and other damages that turn an unpleasant experience into a landlord's horror story? At a minimum, you could spend $2,500 on one eviction.
Let's break it down:
- Legal Fees: The median hourly rate for attorneys in the U.S. in 2013-14 was $350.* The average legal bill for an uncontested eviction starts at $500 and can climb to $5,000 or more for one that is contested by a tenant with his or her own attorney.**
- Court fees: The cost to file court actions varies from state to state, but all charge for filing. In Florida, for example, fees for filing, issuing a summons and serving two defendants start at $275. Filing subsequent actions, such as a summons or a demand for a jury trial, brings additional fees.
- Property damages: The cost to haul away trash and abandoned possessions, with surcharges for handling electronics and hazardous materials, can start at $100 a load. Sadly, some evicted tenants have turned vicious and left expensive messes in their wake, boosting clean-up costs into the thousands of dollars.
- Financial damages: Landlords who win eviction cases still have to collect. Many claim there's little hope of collecting back rent and/or damages from a tenant who couldn't manage to meet regular rent obligations.
- Lost rent: Eviction can take between five weeks and three months. With rents in the U.S. averaging $1,350 a month (they run at an average of $939 a month in Canada) lost rent in the U.S could be between $1,570 and $4,050 (between $1,092 and $2,817 in Canada).
Authors Brandon R. Turner and Heather C. Turner summarize the cost of eviction in their, “The Book on Managing Rental Properties.” The Turners write, “The state-required legal fees involved with an eviction are fairly light, usually no more than a few hundred dollars. However, the attorney fees and the lost rent are the big cash killers. You'll likely spend between $1,500 and $3,000 on attorney's costs, plus several months lost rent and damages done to the property. The eviction process can be complicated, and in most areas, the courts are not as friendly to the landlord as they are to the tenant.”
Best way to deal with evictions? Avoid them!
Alfred Hitchcock, the master of horror and suspense, once described his own aversion to the unknown. “I'm full of fears and I do my best to avoid difficulties and any kind of complications. I like everything around me to be clear as crystal and completely calm,” Hitchcock said.
He could have been talking about landlords! The easiest and best way for a landlord to avoid difficulties and complications is to have a good, written lease and to thoroughly screen tenants.
In fact, many landlords say that screening is the best insurance they can have on their investment property. California attorney David Piotrowski asks this thought-provoking question in describing the risk involved in neglecting background checks. “Think about it – do you really want to hand over the keys to one of your most valuable assets without doing any kind of background check on the person who will be living in your home?” Piotrowski asks in his book, “California Landlord Best Practices and Eviction Overview.”
A credit check and criminal background report is vital in order to decide whether to lease property to an applicant. Landlords must know whether a court has ruled against an applicant in previous eviction cases, and whether that applicant's credit is good or in ruins. Otherwise, it's a roll of the dice.
Is eviction the only way to regain possession of your rental?
Some landlords, when faced with tenants who have broken the lease agreement, find success with the so-called cash-for-keys alternative to filing for eviction. In this scenario, the landlord offers the tenant a sum to immediately move out of the unit. The rationale for some landlords is that the tenant who's behind on rent is unlikely to have the money to pay a judgment against him of her. Eviction isn't likely to help the landlord recover losses, and the tenant may remain in the unit throughout the sometimes lengthy eviction process. However, cash-for-keys isn't a measure you want to try without an attorney's advice and guidance.
The worst thing any landlord can do is dither. Too often, an inexperienced landlord will delay launching the eviction process because the tenant promises to get caught up on rent or remedy other lease violations. Then, the deadline to catch up passes and the tenant makes yet another promise that the landlord hopes will be honored. Sound familiar?
Well, instead of hoping, savvy landlords and property managers immediately send tenants a notice of violation that warns of the potential for eviction. This way, when the deadline arrives, the landlord can go right to the next step. If the tenant responds positively – that is, pays back rent and fees or cures other lease violations – then the landlord doesn't need to take the next step.
Eviction isn't pretty and even the most careful landlords must occasionally evict tenants. But doing all that you can in advance is still the best precaution against finding yourself in that difficult and complicated – and costly – process.
* Most recent available salary data from the National Consumer Law Center