Tenant Law... any ideas?

[motion]

I leased my Laguna Niguel home out when we moved to Montana. The renters were local and had good credit. They also claimed to have excellent income, which I did not verify. 12 month lease at $4350 per month.

They have not paid rent since Oct 1 and filed Chapter 7 BK on Oct 17. I hired an attorney to file for a Relief of Stay, which was granted by the judge. Now, we are proceeding with a 3 Day Pay or Quit, then an Unlawful Detainer lawsuit.

The attorney has told me that if the UD is uncontested, I can take possession of my home on Dec 10. If contested, there's another 2 weeks added, with probable possession on Dec 24. I say probable, because who knows what these knuckleheads can come up with.

My issue is that my attorney admitted to me that he screwed up the 3 Day, with the wrong figures for back rent owed (he added the late fee into the demand amount, which you cannot do). So now, the 3 Day is deficient, and we had to file the 3 Day again. Delay will be 5 days, which is another grand out of my pocket.

At first, I didn't think too much about it. I guess even attorneys can make mistakes. But thinking about it more... I believe there's something else going on here. I think he intentionally screwed the first 3 Day up, because he, the other attorney and my tenants don't want to be bothered with the stuff going down on Christmas Eve. This buys them another week and allows them to have a Merry Christmas in my house, on my dime. So basically, I don't have any confidence in the attorney.

I'm probably going to can him tomorrow and hire a new attorney, but am brainstorming on what I can do to put some pressure on my tenant to get his ass out of my home on December 14. In other words, to not contest the UD.

A couple of notes:

The lease was obtained by fraud. The tenant misstated his income severely. I know this after reviewing the numbers in his BK declaration.

The tenant is in violation of the lease due to operation of his business out of the home. Not allowed, according to the lease.

So, what I'm trying to do here is get these clowns out of my home as soon as possible, and probably more importantly, make sure I can chase after him with a judgement for the back rent, attorney fees and lost rent while I find another tenant. He owns another home in Laguna Niguel, which I am guessing they will be moving back into. I'd like to slam a lien on the house, but am leary about homestead claims or BK protection.

Sorry for the long-winded description, but its a complex situation. I want to try and make sure I'm doing everything right so this guy doesn't have an advantage over me. Any ideas? Thoughts? Encouragement?

[Hugh R]

After its all done, take your attorney to small claims for the damages, meaning the extra time the tenants got out of you. 1099 the tenant for the money he didn't pay you. Let the IRS eff with him for a while.

[motion]

Interesting, Hugh... are these things really do-able? They sound delicious!

[wrecktech]

Originally Posted by Hugh R

After its all done, take your attorney to small claims for the damages, meaning the extra time the tenants got out of you.

This should be covered by errors and omissions insurance, isn't it?

[Christien]

There's no doubt you can sue the lawyer if you have grounds to prove he filed the 3 day incorrectly, deliberately, but that's going to be hard to prove. Is this guy a real, bona fide lawyer, or some pencil pushing paralegal? My experience with paralegals is that they're wannabes, and often talk bigger than they can think. If he's a real lawyer, he will likely know if he's going to win or lose in SCC, so if it goes to trial, look to settle.

I work in subprime and have come across a million different way of dealing with deadbeats. I don't know these people that have leased your place, and at that kind of monthly payment, even with a gross exaggeration of his income, I'm assuming they're not quite the deadbeats I deal with at work, but I'll tell you one thing I've learned: shoot first and ask questions later. Right now you're on a day-to-day to cut your losses with these people, which means you need to get them out as fast as possible and get paying tenants in. How you do this I'll leave up to you, but my suggestion would be to flex as much muscle as possible while staying within the law. You might not have to evict them through the court system, which is painfully slow and set up to protect the defendant, even if he's a lowlife deadbeat.

An example from my end: we do a fair number of car repossessions. If we want to do everything by the absolute letter of the law and make sure everything stands up to a judge should it ever be fought by the lessee, we should hire a bailiff, have the lessee sign off on the repo, allow them to collect personal possessions and license plate from the car, then tow it to auction, then provide them written two weeks notice to reclaim the vehicle, then sell it through auction. Do we do this? Of course not. We'd be out of business in a matter of months, after bailiff fees, storage fees, auction costs, not to mention the write-down on each lease from having to dispose wholesale. Someone from the dealership takes the extra set of keys, goes to their house, takes the plates off, slaps on a dealer plate, then drives it back to the dealership. If we don't hear from them in a couple days, the car's back on the lot and the personal effects are in a box, lost somewhere in storage.

The contract gives us full legal right to do this, and in 99.5% of cases nothing comes of it. If someone did want to fight it all the way, a judge would likely find we acted too fast, didn't give proper notice, etc. and at least award the deadbeat a reprieve from any late fees, repo costs, admin charges, etc. In those .5% where someone wants to fight, we'll agree to drop the late charges from the collection agency and they go away happy, with their tail between their legs.

My (admittedly long winded) point is that there are many ways to skin a cat, and by the book is usually the slowest, most inefficient and costly method. But not going strictly by the book doesn't mean it's illegal.

[red-beard]

Motion: Show up in person or hire someone to show up in person and demand they leave. It may work, it may not. If you can get an off duty sheriff to do it, even better. If the people "know their rights" they will know it's a bluff, otherwise it may work.

Sorry you're being f'd on this. Fortunately I only had one bad renter in the years I ran an apartment building. He was a fireman and worked with code enforcement. The guy f'd me good, even though he was a deadbeat. I found out later I was landlord #5 in 2 years time. He was reccomended by a friend, in the fire department. We didn't have a lease, so I simply gave him 30 days to vacate. No bluff would have worked with him.

Best of luck. Just hope they haven't trashed the place.

[Dantilla]

I am very familiar with Landlord/Tenant law in Washington State, not California.

In Washington, there are several ways to evict a tenant, but the fastest is due to non-payment of rent. I wouldn't put effort into anything but the non-payment issue. Get them out as soon as legally possible- Don't do ANYTHING that is not allowed under California Landlord/Tenant, or you could be on the hook for way more than back rent.

I learned long ago that the best way to get rid of a lousy tenant is to not rent to therm in the first place.
Screen them a bit more thoroughly next time. That means verifying income.

And check Photo ID. Every now and then, somebody will try to rent using somebody else's SSN to hide their bad credit.

[Rick Lee]

Oh man, this sucks. BTW, how do you verify someone's income other than pay stubs and W2's? Will tenants come up with tax returns for a lease application?

[Dantilla]

Being that there is a BK, you may try this-

When lower end people have gotten behind, I've sent a letter saying if they can be out by the end of the month, leave the apartment clean, and return the keys, I will call it even. Just go.
If they are not out, they are liable for back rent, late fees, attorney fees, yada yada.

Every time, they have left the apartment spotless, and thanked me profusely- They get a fresh start, and I can get somebody in who can afford to pay the rent.

No sense spending energy chasing money that isn't there.

[Dantilla]

Originally Posted by Rick Lee

Oh man, this sucks. BTW, how do you verify someone's income other than pay stubs and W2's? Will tenants come up with tax returns for a lease application?

There are plenty of screening companies that will send a complete credit/criminal/rental history report.

If it takes a tax return to verify income, I want to see the tax return. Bottom line is this: Before I give a stranger the keys to my building, I WILL verify everything on the application. If they give me stories about why information is not available, I tell them I'm sorry that they will have to find someplace else, but they have to find someplace else.

[Danny_Ocean]

Originally Posted by motion

The lease was obtained by fraud. The tenant misstated his income severely. I know this after reviewing the numbers in his BK declaration.

He's either lying to you or the BK court about his income. I'm sure the BK judge would be very interested to see conflicting information from a recent application stating income different than what's on the BK petition. He might have some 'splainin to do...

[the]

You could sue the lawyer for doing the 3 day wrong, whether he did it intentionally or not. It's malpractice and it caused you damages.

Of course, the damages are likely not huge. And your attorney fee agreement likely does not have an attorney's fee provision (attorneys don't usually like to put those in their agreements, because there is more downside than upside to them on that). So you'd have to hire an attorney, pay him to sue the other guy, and the fees would not be recoverable, so even if you "win" you lose.

And your atty fee agreement also probably has a mandatory arbitration provision, so you'd have to submit to arbitration, not a suit in court. That would include not being able to take him to small claims court.

I highly doubt your attorney did it on purpose. No sane attorney commits malpractice on purpose. He just screwed it up, like most attorneys screw up UD matters (the UD statutes are always very technical, and have to be complied with to the letter. Most low end attys like you probably have are not detail oriented and don't give much of a damn).

That the tenant obtained the lease by fraud or is running a biz out of the house is basically irrelevant. He has already breached the lease by non-payment, and you have your grounds for eviction right there. You aren't going to need more.

You can't put a lien on their house, unless you get a bky court order saying you can. If you do, you will be in violation of the bky automatic stay, which can be a serious matter.

Your situation isn't that complex. You have relief from the stay to proceed with your UD already. Now that that is done, you have only 2 choices: (1) Properly do the UD and get them evicted, or (2) work out a deal with them to get them to voluntarily move out.

You should send a letter to your current lawyer that memorializes that he screwed up the first 3 day notice. This letter needs to be SUBTLE! He knows what he did, what he doesn't know is what YOU know and how you are going to react. If you come on too strong, you will make him defensive, with nothing left to lose, you are the enemy. Do not make it an obvious "set up" letter, don't say you are going to sue him. But the letter should have in it a reference to the facts, and to the screwup.

Unless he is a really bad atty, you may want to reconsider hiring another. Your letter will get his attention, and if he has any sense, he will be VERY careful and pay a lot of attention to getting your matter resolved. Because now YOUR problem is also HIS problem. If you hire another UD atty, you may get someone even worse than the guy you have now (UD attys are not usually "top drawer" level attys, if you know what I mean).

It's dealing with stuff like this that makes even decent looking rentals numbers look "not as attractive" to people like Jurgen (and me, to some extent).

[GDSOB]

Originally Posted by Dantilla

Being that there is a BK, you may try this-

When lower end people have gotten behind, I've sent a letter saying if they can be out by the end of the month, leave the apartment clean, and return the keys, I will call it even. Just go.
If they are not out, they are liable for back rent, late fees, attorney fees, yada yada.

Every time, they have left the apartment spotless, and thanked me profusely- They get a fresh start, and I can get somebody in who can afford to pay the rent.

No sense spending energy chasing money that isn't there.

Great advice. I've even rented trucks and PAID them to get out. You can get it re-rented quicker and avoid the legal fees. There's better things to do than chasing down judgements from broke people.

[Christien]

Originally Posted by Rick Lee

Oh man, this sucks. BTW, how do you verify someone's income other than pay stubs and W2's? Will tenants come up with tax returns for a lease application?

Call the employer to verify - you might also get some off the record info that helps with your decision. Certainly self-employed people will caugh up a tax return for a car loan, so I wouldn't see it being any different for property rent/lease. Though I've never understood why people would trust a tax return or Notice of Assessment (not sure if it has the same name in the states - it's the notice from the gov't that they assessed your tax return and either accept it, or here's how much we're refunding or here's how much you owe). What's to say the applicant stated their taxes correctly? Sure the gov't may catch up to them after a few years, but that's not going to help you assess their current ability to meet obligations.

[ed martin]

You screwed up by not doing a proper background check on the tenants. I think chasing all of these parties in court will be one exercise in futility. My landlord friend just skips all of expensive legal stuff and actually pays deadbeat/problem tenants to move out! I realize this may seem outrageously offensive to your sense of fairness but it may just be more pragmatic. Chalk it up to another life experience and you'll not repeat the mistake.

[red-beard]

Originally Posted by Christien

Call the employer to verify - you might also get some off the record info that helps with your decision. Certainly self-employed people will caugh up a tax return for a car loan, so I wouldn't see it being any different for property rent/lease. Though I've never understood why people would trust a tax return or Notice of Assessment (not sure if it has the same name in the states - it's the notice from the gov't that they assessed your tax return and either accept it, or here's how much we're refunding or here's how much you owe). What's to say the applicant stated their taxes correctly? Sure the gov't may catch up to them after a few years, but that's not going to help you assess their current ability to meet obligations.

What is to stop someone from giving you a fake tax return? Employer verification, and don't use the phone number they supply.

[Christien]

Absolutely, though a Notice of Assessment would be difficult to forge - again, may be different from the US, but what we get here would be hard to match the paper, print, etc. Not impossible, just not easy. Good point about not using the employer # they provide.

[911Rob]

Hey Motion,
Been there, done that, got the T-shirt, you know the B.S.
I'm down with Dantilla and Garth, but been screwed every way possible by low life tenants.
I could write a book.
Commercial real estate is a lot less hassles.

Wish I could help more.... but a little encouragement from your BC Buddy.
Good Luck!

[Evans, Marv]

Motion,
First, you don't need an attorney to proceed with the UD process. So I'd reconsider getting another one.
When I had rental property, I normally filed an unlawful detainer as normal course of business when getting a tenant out. It cost more than the small claims process, but was faster and more sure.
What I did was deal with a law firm that specialized in landlord law. They had a part of the firm that did UD's, and it was all done by legal assistants. They did all of the paperwork on time, filed it on time, had the tenant served on time, and arranged for the Sherriff on time if necessary. I just FAXed in the info a day or so beforehand with a note I would call them with any changes or cancellations, but otherwise go ahead on a certain date.
The only time I got the attorneys involved was if the UD was contested. This only happened twice in 25 years, and it was resolved quickly and didn't cost that much.

[Evans, Marv]

Motion,
Wayne had good ideas, but the fastest, lowest cost isn't the way to go. It is only if you are lucky. Once you file, don't communicate with them unless they call you. If they do that, document the conversation.
When I was going to get a tenant out, I would explain the process to them beforehand, including the information that the UD resulted in a court judgement in my favor including a monetary judgement. If the judgement wasn't settled, it stayed on their record for a decade and was a big negative for their credit record. I also told them I would be taking them to small claims court to recover money for any damages or conditions that required correction should that be necessary. That would also stay on their credit record if they didn't settle it. Most of the time that was their motivation to leave with the unit in good shape.
No need to become emotionally involved. They screwed you, but the best you can do is just solve the problem.