The LandLord Advocate Feb 2015

A common question among landlords, it often defies easy explanation due to factors specific to not only the landlord-tenant relationship, but also to the law and operation of the courts.

As always, the key document – and first point of reference – is the lease. What does it say about any grace period, default, notice, or remedy concepts that would help address the issue at hand? Remember, landlords can (and often unwittingly do) contract away their summary process (eviction) statutory rights by what’s written in the lease. For example, on the residential side, a lease that states rent is due by the 10th of the month – usually, an attempt to simplify the 1st of the month deadline plus the 9-day statutory grace period – in reality means that the tenant has until the 19th of the month to pay. The statutory grace period applies from the lease rent payment deadline as extended by any grace period(s) included in the lease. On the commercial side, a lease that requires a default notice for nonpayment of rent eliminates the landlord’s statutory right to move directly to a notice to quit on the day after the rent is due.

Another factor is whether the rental situation in any way benefits from government or private-source funding (this includes Section 8, HOME, tax credits, and municipal bond programs as examples). If so, there are routinely operating agreements or laws / regulations that may affect whether and how you can evict a tenant. Be sure to consider this often-overlooked, yet critical, component if you are contemplating whether to acquire a multi-unit complex – particularly on the residential side. To avoid additional expense, landlords looking to expand their property portfolio should be sure to put the contractual burden of identifying these agreements, laws, and regulations on the seller, not the buyer.

Properties or tenants that participate in rent-subsidy programs like Project-Based Section 8 or Section 8 Vouchers add yet another factor as there are usually contracts between the landlord and the Section 8 administrator (or other government agency) that will impact the situation (see our past article “Section 8 – So many contracts – so little time” for more on this subject).

Luckily, the law is much more straightforward when defining an eviction timeline. For example, when using nonpayment of rent in a market transaction (i.e. no government program involved) – regardless of whether it’s residential or commercial – your landlord attorney, in most instances, should be able to get you a tenant deadline to file an appearance in court and a responsive pleading to the complaint within approximately twenty-three (23) days.

From there, if the tenant fails to file an appearance, your landlord attorney can file a motion for default against the tenant, which – by law – the court should grant within one (1) business day. If the tenant files an appearance but does not plead, your attorney can file a different motion for default against the tenant, which obligates the tenant to file a pleading within three (3) business days or the court will grant default judgment. Of course, one can never account for the potential backlog of work in the Housing Clerk’s Office which can delay the court’s response to these motions (see the original release of this article and our March 2009 edition for more on dealing with Housing Clerks). Although landlords cannot control how quickly the court responds to such a motion, with the right landlord attorney, they can control the timeliness of the document filings.

If the tenant files an appearance and responsive pleading (and the landlord responds, as necessary), the court will schedule the case for trial or a hearing on the tenant’s pleading. Depending on the court, this can take anywhere from a few days to four (4) or more weeks (the courts with housing sessions are usually quicker than those without in scheduling the trials/hearings). How quickly the landlord obtains judgment in this situation is usually a function of how well the landlord and its attorney structured the case, handle the (usually) mandatory mediation and potential stipulated agreement (commonly referred to as a “stip”), and are prepared for and can handle the trial or hearing.

Lastly, after the landlord receives judgment for possession, a statutory five (5) day stay of execution automatically applies, and marshals are required to give at least one (1) calendar day notice to the tenant of the eviction date, which is often defined by when the town/city is available to schedule the eviction. Again, landlords cannot control the timeliness of the court’s response, but can significantly influence the execution filing (for court processing) and marshal selection (and performance) by working with a landlord attorney well versed in landlord-tenant law and with established relationships with similarly knowledgeable marshals who have good working relationships with the cities and towns in their county.

Quick Tip:

New acquisition? Be sure you know what you’re getting yourself into.
Whether you’re buying a new property, or simply taking over the management of one, part of your preparation should consist of a thorough analysis of what you are truly getting yourself into. Commonly referred to as Due Diligence, you are already looking at financials, checking out the physical structures, and likely analyzing what the future potential is for the property. Unfortunately, there are limitations that you will face with such an analysis. The first and most obvious is grasping a perfectly accurate picture of the current residents in the community and what could very well be their disruptive and distasteful habits.

While we are not recommending that you assume the former owner or manager is being dishonest in their presentation, you must be diligent in verifying that the information you have been offered is being presented in its most accurate light. If for no other reason, the inherent value of the property is largely dependent upon a tenant base that pays in full, on time, and requires little management at all. So, acquiring this information from the former owner or manager makes a lot of sense.

Another limitation, over which you have a bit more control, is the analysis of past documentary information about the residents. You have absolute control over the review of all tenant files and you should take the time to examine them. If you are unable or unwilling to review them all, at a very minimum, take a look at the rent payment histories for every tenant and flag those files belonging to the problem payers. Payment issues often reflect other underlying problems, and so knowing more about those tenants will make you better prepared once you take over the community. You may also take a quick look at the courthouse for files where your predecessor was the plaintiff in an eviction case. This will give you a sense of how often the prior management addressed problem tenants, and may also give you a sense of who they are.

Lastly, be sure you have an accurate account of the various leases distributed among the tenants, review them all closely, and ensure that you clearly recognize what your rights and obligations are under each of those leases. Combined with your review of the tenant files for potential challenges, the knowledge gained by this lease analysis will put you in the best possible position to address any future troublesome situation aggressively and efficiently. And, where you find inconsistencies among leases, make reconciling those differences a high priority for your newly acquired asset.

DISCLAIMER:
The reading of this newsletter does not form an attorney-client relationship. The contents of this newsletter are for informational purposes only and do not constitute legal advice. Nothing in this newsletter is intended to imply or predict the outcome of any legal matter that you may be considering or be involved in. The Landlord Law Firm makes no warranties of any kind regarding the information contained in this newsletter.