Eviction courts in many states are closed right now. Here in Tennessee the State Supreme Court has halted evictions until the end of May. This hold was deemed necessary because so many have lost their jobs or been otherwise impacted by the great supression. However, the closing eviction courts has also provided an incentive for some to simply not pay the rent and forced landlords into a bit of a corner.
But without the courts behind you, what can you do?
You do have options. You cannot use force, but you can certainly try to persuade. Evictions are costly and confrontational anyway. They create animosity and leave a potentially very angry person in control of a vary valuable and easily damaged asset. In over 15 years in the landlording business we have only been to eviction court three times. Instead, we prefer to use the power of persuasion and the power of cash. Sure, force may feel better at the moment the judge rules in your favor, but trust me, the hidden costs are always there and will make themselves known before you actually do get that tenant out.
The persuasive method I am referring to here is of course cash for keys and since I have written about that before I will not get into too much detail about it here. Suffice it to say that instead of using force, you pay your deadbeat tenant cash to leave and hand you the keys. We have successfully used this technique many times over the years and it is a very good option to use in these evictionless times.
Yes, I understand that it hurts the pride a bit to actually pay a deadbeat tenant, but that hit to the pride is a lot less painful in my experience than the expense and stress of an eviction and setout. Plus, what other option do you have right now? None.
How much cash should you pay for the keys? Depends on your situation, market and circumstances. You need to ask yourself how valuable it is to you to get the tenant out. How much rent are you losing? How behind are they? What will they take to leave? How stressful is it to you? There are many factors to consider but a few hundred dollars often does the trick.
Make your tenant an offer and see where it goes. Start low. Consider making an all cash offer or perhaps including a moving van or something else they want. It is up to you to be creative in these interesting times.
When pursuing the cash for keys option there are two “should haves” and one absolute “must have” for the landlord.
First, there has to be a certain date when the tenant agrees that they will be out. Of course you can always give a day or two leeway if you see that effort is being made but you have to have a set date. If they do not move by that date, they do not get paid.
Second, we insist that every piece of furniture, belonging and trash, down to the wire hangers in the closet and the Taco Bell sauce packets in the kitchen drawers, are removed and the place is broom swept clean. The last thing you want is to pay a tenant to leave and then have to pay someone else to remove their unwanted, stained sleeper sofa and other garbage.
On the “must have” side, you must get a signed release of the rights of possession form. Download one here. This form is a must because your tenant has to return legal possession of the property to you. You need something to show a judge, if it ever comes to that, that you have received legal possession from the tenant and that they have removed all of their belongings. DO NOT hand them the cash or take the keys until you have that signed form in your hands. If they will not sign, then no deal.
The courts will reopen someday. In fact, as I write this, Texas already has. You can make that known to your tenant and tell them that your offer will be much better than the one the receive in eviction court. Cash for keys might just therefore solve your problem.
Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors. Subscribe to Smarterlandlording here. Contact Kevin here.
