2/05/2014

Small Claims Court

Well I thought for sure that someone out there had questions for the Circuit Court. I had an opportunity to sit and talk to Laura. She was very nice and did her best, with much experience, to answer my questions. My one problem is that I have taken for granted that all Property Managers or Landlords care as much as I do about making nice homes for people to live in and following the Indiana Laws as far as Tenants Rights. I as a Licensed Real Estate Broker have making Laws and requirements that I maintain but I guess we are not all alike. I'm sure that we all care that if we lease a property to a Tenant we expect them to take care of it and pay their rent when it is due. Is this any different than where I live? I do my best to keep my house nice mainly because I live there but I also make a payment every month. Why is it that I will get calls saying I'm sorry I didn't pay the rent this month but it snowed and I couldn't get to you. What if I gave every new Tenant 12 self addressed envelopes with forever stamps on them and said, as it states in my lease, you may mail the rent to me but it has to be to me by the 5th because on the 6th there is a 10% late fee added. So people would know on the last day or first day of the month walk across the street and mail their rent to me. I ask my Tenants to please call me if you have a problem and know there is no way you will have the rent to me by the 5th. Common Courtesy! On the 6th when I'm calling to find out why I have no rent for that person I will be told that it snowed and they thought I knew it. Now have have a lot of properties and most of them will have paid and I put my payment in the mail also but they feel there is no reason for them to say anything to me.
I kind of got off course a little here. The problem I am having is that I have upgraded almost all of my properties. My rent is not cheap. I know that someone I am renting to expects more and so do I. Now I had a problem with one of these Tenants this is what happens:

1. My lease says the rent is due on the 1st and they have until the 5th and on the 6th there is a 10% late fee.
$1000 a month rent + $100 late fee = $1100 Normally these Tenants have a really good reason for being late even though I have to chase them to get it so they ask for me to be patient till the end of the month and they will be able to pay the month they missed plus the next month at the same time and on time. Now we have another $1000 due total so far is $2100. I did not get it or a call.

2. I send a certified eviction notice and I also take one to the house. My lease states that on the 7th it is an automatic eviction notice. I spoke with a judge Sat evening and he said the Circuit court judge will go by the wording of my lease. I am changing that to the 10th and as long as they initial and sign the lease stating that they have read and understand everything in my lease I am fine but let's say it is done the way we have been doing it. On the 7th I have sent them the eviction notice by certified mail $6.10 giving them 10 days. It is the 18th and I am the Justice Center filing for the eviction. It cost $94 if it is one person and $10 more for someone else on the lease each. Our total now is $2110.10. When I turn my paperwork back in they set the date for me to go to court. The last one took me 33 days. Laura said it should never take more than 3 weeks and shouldn't take that long.

3. Now we are into the next months rent $1000 + late fee because they are not going to pay it. Our total is $3110.10.

4. When our court date comes we are called into a small room at the end of the hall. I have only had one time when a Tenant showed up. This time I am using as an example he did not but they still gave him another 10days to be out.

5. If at the end of the 10 days they are still there it is my obligation to go back to court to have a Judge sign another notice of eviction to have them removed from the property. The last time I got this far it took almost a week but I learned I don't have to wait for them to mail it to me, I can go up and pick it up.

6. Now I am on my way to the Sheriff's office. I give them my paperwork and they set a date and time to meet me at the house so that I can change the locks. They are not moving them out. They are allowing me to change the locks and if they have personal items in the the house it is my responsibility to put them in storage for 30 days. I will admit that I have only had to go through this once. It took the Sheriff's office 2 weeks to do their paperwork and serve the Tenant. We are now real close to another month but I am not going to add it on just in case it is a few and I mean a few days short of another month. I am now paying to have their stuff moved to storage and paying a storage bill. $100 to move it and $40 to store it for a month. At the end of the month what am I doing? Selling it? Giving it away? Throwing it away? Letting the Storage Facility have it to sell then what does that do for me the next time I need a unit? Total to date $3250.10.

7. Back to the house. What a mess. Have you ever had a house that you had to evict the Tenants ever be ready to move into? I haven't. Now I have a lady who does a wonderful job of cleaning. If the rent is $1000 a month then it is not a 700 square foot house. It is probably 1600 square feet or larger. To clean this property will take her 3 ten hour days at $15 an hours. $450. Hopefully I can have carpets cleaned. $250.
Painting and repair of walls. $750. Now we have just spent $1450 to put this property back in the condition it was in when they moved in. They had a $1000 damage deposit. I subtract it from the work that was done and I'm still owed $450. Total now is $3700.10. Through this whole process I have not been made a penny.

8. 45 days have passed and I am now going back to court for the rent and damage hearing. I prove all that I have stated above plus receipts and picture. I have an LLC. I am a sole proprietorship. I am only allowed a $1500 judgement. I have never heard that before. Now we are out $2200.10. Ok because I was a sap and thought I was being told the truth, and they wonder why we are becoming so hard hearted, I could have cut a month off of this. We would have only lost $1100.10. Now Judge Speece told me that if I would have had an attorney with me we had a $6000 maximum. He also said that I could not get the money for the attorney back either. I can get the filing fee and 8% interest for as long as it takes up to 10 years to collect. Should we as the Rental Property Association try to get an attorney to work with us? I was told I can still do the paperwork and all he or she needs to do is be there. At this point I am wondering if this is something you would be interested in looking into as an Association or as an LLC I should look into it for my business.

I know that I am not the only Property Manager or Landlord that has this problem. Maybe there is some way that we can change things. As a Real Estate Broker we have to agree to go to Arbitration. Would something like this work for us?

Our next meeting is February 20th in the small room at the MCL. We get together at 6:00 for dinnner and lot of conversation then the meeting starts at 7:00 and last till the MCL closes at 8:30. We have been known to stand in the hall of the Mall and talk till they kick us out and then weather permitting we move to the parking lot. I have invited Judge Feick to come and speak to us. He is running for office again so I thought that we might interest him also. If we are going to have to have an attorney to work with us then let's find one that is interested in us enough to come and talk to us also.

I understand that there are many Investment Property Owners that bought their properties many years ago with the idea of this being their retirement. With the changes that have been made in mortgage regulations, taxes and Landlord rights as far a Tenants are concerned it is harder and harder for these Owners to keep their properties. Muncie wants their neighborhoods to become nicer or the rental properties to be kept up but do not seem to want to help the Owners. Now the other question I have is why is it always the low income Owners that are able to get grants or tax credits? Oh please don't get me started.

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