5 Ways to Decrease Evictions
Published on: Tuesday, December 15th, 2015
by John M. Mione, Esq.
Evictions cost everyone: landlords, property managers, even tenants. Legal costs, time spent at court and, of course, lost rent while finding a new tenant all harm a landlord’s net operating income (NOI). Landlords need to understand that decreasing evictions, aside from the obvious benefit of strengthening relationships with existing tenants is vital to optimizing NOI.
Here are some helpful tips to get residents to pay more timely and consistently, and thus decrease evictions.
1. Effective Screening
Decreasing evictions starts right from the very first step in your relationship with your tenants: your screening process. It’s important to take your time and do your due diligence when you screen potential tenants. Thorough screening increases the likelihood that you will have a good paying resident.
Effective screening includes:
- Credit Check . This may seem obvious but I have seen enough cases where not doing a factual and thorough credit check has led to misunderstandings and potential difficulties in rent collections.
- Criminal Background Check . Often overlooked, criminal background checks provide vital information on a potential tenant.
- Speaking to the Applicant’s Prior Landlord(s) . Go beyond the numbers and get an actual account about the tenant from his/her prior landlord. I would recommend setting up a common set of criteria to ask, such as payment history, any sort of history of problems while residing at the property and how the tenant resolved any difficulties while living at the property.
2. Actual, Consistent Communication
Better communication improves your relationships with residents. Create a system and processes to increase communication with your residents. Whether it’s through mail, e-mail, conversations or meetings, follow up with your residents, listen to them and learn from their feedback.
Good communication leads to timelier paying and fewer evictions. It turns you into a proactive landlord who can solve potential difficulties rather than a reactive one who has to “put out fires”. Furthermore, if you have a good relationship with your residents, they are much more likely to refer future residents to you, a great bonus!
3. Accepting Rent from Assistance Organizations
Allowing for and even incorporating more rent from agencies (governmental or private) can help you decrease evictions in a number of ways. Remember that not only are individuals who get assistance generally protected under Fair Housing, but most courts will be hesitant to allow eviction if a resident is getting assistance. Understand these facts and incorporate them into your processes for finding quality residents and working with them on payment and other possible areas (especially since you will have created an open system for communication).
And while you do have to wait longer to get paid should you accept rent from agencies, you will decrease evictions and mitigate your Fair Housing exposure.
4. Creating Payment Plans
Payment plans can be tricky, but when done reasonably and applied correctly, working out payment plans with residents help avoid a spike in vacancies. Make sure that the terms are strict and that you adhere to them–namely proceeding with suit first, then doing a payment plan within a court judgment. The judgment should then allow eviction upon default on any term.
When creating your payment plan, avoid offering or accepting discounts on the rent owed. A payment plan already provides important support and relief to your residents. Also, remember the power of word of mouth and that once word spreads that you are willing to lower rent in order to receive payments that you are legally owed, you will find it very difficult to stop other renters from leveraging payment in order to receive similar discounts.
5. Strict Adherence to the Legal Process
Yes, the whole point of this article is to decrease evictions. So while it may seem paradoxical, strict and timely adherence to the legal process actually helps you achieve this goal. If non-payment notices are issued at the same time every month and suit follows as soon as the law permits it, residents are eventually conditioned to know they will be subject to suit and additional costs if rent remains unpaid. This in turn gives them greater incentive to pay on time.
Your NOI is Vital for Success
Increasing NOI is a foremost concern for all landlords and property managers. Evictions hurt your immediate NOI. Add in any potential delays for finding new tenants and you could find yourself in a difficult cash flow position that will hurt both you and your current residents. Following the five simple steps above, can help reduce your evictions and allow you to spend time on more important things–like filling your vacancies with new, good-paying residents!