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You are reading: How to Prevent Evictions For Property Managers

May 20, 2024

How to Prevent Evictions For Property Managers

Daniel Berlind
CEO

One of the biggest challenges property managers face today is handling evictions. Evictions can be time-consuming, expensive, and exhausting for both parties. On top of that, you can suffer from lost rental income and a damaged reputation.

Preventing evictions is possible with the right strategies in place. In this blog post, we will discuss relevant eviction data and the costs associated with an eviction, and provide practical tips for tenant screening, fraud prevention, and other strategies to help property managers prevent evictions. If you’re looking for actionable ways to ensure that your tenants stay happy, pay rent on time, and stay in your property for the long haul, you’re in the right place!

Tenant Screening

The best way to prevent an eviction is to choose the right tenant. It helps you avoid potential problems and ensures that your investment is protected. Proper tenant screening can help you identify potential red flags before renting out a unit. It allows you to:

  • Choose tenants who have a good track record of paying rent on time
  • Ensure that the tenant has a stable income
  • Clarify any gaps in their rental history, employment status, or credit score
  • Evaluate the prospective tenants’ background to ensure they don’t have a history of evictions or criminal activities

Once you have an interested tenant, you’ll begin the screening process. Crucial elements of an effective screening process include the following.

Check Credit Score and History

Reviewing the credit score and history of the prospective tenant is one of the most important steps. Credit scores provide information on whether the tenant is financially responsible and a good risk. A low score may be an indication of missed payments, outstanding debts, or other financial issues. For more information on interpreting credit scores see credit bureau Experian’s article on “What Is A Good Credit Score?”

Verify Employment History

A tenant’s employment history gives insight into their ability to pay rent consistently. Ask for recent employment records or pay stubs to show proof of income. You should examine the duration of their current employment and other previous jobs. This will give you an idea of whether the prospective tenant is likely to stick around or be trustworthy when it comes to financial responsibility.

To be even more confident in an applicant’s employment history, consider implementing a document fraud detection software to filter out any altered bank statements or pay stubs. Snappt’s software is designed to catch fake documents and reduce bad debt and evictions by over 50%!

Review Rental History

Contacting the applicant’s previous landlords and property managers will give you an understanding of their behavior and whether they honor rental agreements and make timely rental payments. Ask if they’ve had any conflicts, evictions, or issues with the applicant.

Verify Identity

Never skip the process of identity verification during the screening process. You can ask for identification documents such as a driver’s license or passport to confirm the tenant’s identity. Anyone who applies should also complete a comprehensive background check.

Determine Whether They Meet Your Requirements

Based on the information you’ve gathered, make a decision about whether the tenant meets the requirements for renting your property. Avoid dispensing unfavorable information, and make sure it is compliant with fair housing laws.

Communicate Effectively with Your Tenants

Once you have selected your tenant, take the initiative to communicate in a professional and friendly manner with them as they become your valued client. Establish a set schedule, rent payment deadline, and communicate it well in advance so that tenants are aware of what is expected of them.

With these pointers, you can identify quality tenants and maintain a healthy relationship with your tenants while staying in compliance with the law.

Application Fraud Prevention

In recent years, applicants have found simple yet effective ways to game the system. Instead of risking a denied application, they alter their documents to make it look like they have a certain level of income or high bank account balances–when in actuality, they don’t.

There are a number of reasons why an applicant might forge their documents, including poor credit history, a criminal record, a lack of rental history, or financial limitations. Financial pressures which may lead to individuals altering documentation may be exacerbated during times of high unemployment. During the peak of COVID-19, over 20.5 million jobs were lost, and the unemployment rate increased to 14.7%. No matter where the unemployment peaks, economists predict that it will take years to get the jobless rate back near pre-covid levels. Unfortunately, some individuals resort to fraudulently altering financial documentation to gain access to apartments they otherwise would not qualify for.

Whatever their reason may be, prospective renters using fraudulent documents on rental applications is both illegal and unethical. This type of fraud carries with it the risk of significant problems for both the tenant and the property manager unless it is detected. However, detection can be challenging, time-consuming, and expensive.

The rise of online applications makes it easy to scan, alter and submit fraudulent documentation. Even if applicants don’t have the technical skills to modify their documents, a simple web search for ‘fake pay stubs’ supplies a disturbing number of websites offering these fraudulent documents for a small fee. While these factors may be new to the industry, they are now quite prevalent and here to stay.

But how can you tell when an applicant is attempting to defraud you? That’s where we come in. Snappt has the technology to detect falsified financial documents and prevent costly evictions with a simple addition to your current screening process. To learn more, visit our website.

Eviction Stats

According to the most recent survey conducted by the Princeton Eviction Lab, the national eviction rate was 6.1% in 2016. Keep in mind that eviction rates vary significantly from state to state. States that have a lot of tenant protections typically see fewer evictions per year (e.g. California and New York) than states that are more landlord-friendly.

Tenants have several rights regarding evictions:

  • Notice of Eviction: Landlords are required to provide tenants with written notice of eviction before starting eviction proceedings against them. The notice period and requirements vary from state to state and may depend on the reason for the eviction
  • Just Cause Requirement: Some states have laws requiring that landlords have what’s known as a “just cause” for eviction. This means that landlords must have a legitimate reason for the eviction, such as nonpayment of rent or violating the terms of the lease.
  • Retaliation Protection: Tenants are protected from retaliatory eviction in response to asserting their legal rights. For example, a landlord may not evict a tenant for filing a complaint against the landlord
  • Right to Privacy: Landlords must provide notice before entering the rental property and can only enter for specific reasons such as repairs, safety checks, or emergencies
  • Uniform Residential Landlord and Tenant Act (URLTA): The URLTA establishes basic standards for the rights and responsibilities of both landlords and tenants. This includes responsibilities for repair and maintenance, rental payments, and eviction procedures
  • Legal Representation: Tenants have the right to legal representation during eviction proceedings to help protect their rights

States and local governments provide additional tenant protections that give more extensive rights to tenants. These tenant protection laws commonly regulate rental increases, landlord access to the rental property, tenant privacy, and eviction procedures. For example, San Diego has a just cause eviction ordinance that prevents landlords from evicting a tenant after one year of tenancy, unless they meet very specific criteria.

The eviction process often takes anywhere from 2-5 months, depending on the state and tenant protections in place. In some cities, it can take even longer due to the post-pandemic restrictions. You can try to speed up the process by having a great lawyer and all documents prepared and ready to go.

Eviction Costs

Evicting a tenant is not only a difficult and stressful process, but it’s a costly one, too. From hiring lawyers to court fees and lost rental income, the cost of an eviction can add up quickly, leaving landlords feeling financially stressed and emotionally drained.

There are numerous costs associated with evicting your tenant. The exact cost per item will depend on the city and state, but you’ll find a rough estimate below.

  • 2-4 months lost rent (based on California average rents): $3,000-$5,000
  • Lost leasing commission: $900
  • Court costs (filing fees): $90-$400
  • Sheriff fees for serving a notice: $50-$400
  • Additional filing service fees: $50-$700
  • Cleaning fees once the unit is vacant: $200-$400
  • Marketing fees to relist: $100/unit
  • Attorney fees: $700-$2,000

Total estimated cost: $5,090-$9,900

In addition to these costs, there are additional “soft” costs that aren’t as easily measured. They include time taken away from leasing other units, from the sales team, and from efforts to retain current tenants.

Being a good landlord is tough even during the best of times. Fighting legal battles and evictions makes business even tougher. Having the most sophisticated screening tools and retention tactics can aid property managers in protecting their business from the risk of evictions and bad debt.

To Sum Up

Preventing evictions is essential to ensure that your properties remain profitable and successful in the long term. While eviction costs can be daunting, taking the time to develop effective tenant screening processes, implementing fraud prevention measures, and maintaining open communication with tenants can help prevent many eviction cases. By prioritizing tenant screening and retention, you can reduce the risk of losing revenue and reputation due to evictions.

Remember, a proactive approach to property management is key to success, and we hope that the strategies outlined in this blog post will help you achieve your goals. If you have any additional tips or strategies for preventing evictions, we would love to hear from you!

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