May 08 2007
The situation with the squatters
Several readers have emailed me, Ken has stated it and my mom has shown concern.
The squatters.
Yesterday I spent roughly 30 minutes on the phone with the RealEstate Agent and his attorney. I wanted to thoroughly understand the law and how it pertains to the eviction of non-paying, non-tenant tenants.
The law is on my side.
It is my pleasure to state I do have a copy of the termination notice served to the squatters. With the close of escrow scheduled for May 21st, the last day of occupancy is the 20th.
The question I posed: Let’s say the people are still there on the 22nd. What can I do?
At that point a 7-day "get-out" notice is filed. If they are still there as of the 29th, I file eviction papers ($850) and the sheriff’s departments comes and forcibly removes them. I asked three times if it was truly this easy to remove someone. The lawyer stated "These people are not the tenants, they have not signed a lease nor are they paying rent. Yes it can go that quickly."
There is concern that the tenants may trash the house upon their exit.
During the housing inspection, the RealEstate Agent brought his digital camera and took nearly 20 photos of the house. He said it was for "legal reasons" and now I understand why. We want the house in the same condition as when I put in the offer.
I really don’t want the situation to get that bad.
First off, I don’t believe these tenants want a confrontation with the police. If you subscribe to the theory of "birds of a feather" then the police is the last thing these tenants want. With that being said, I may be able to employ a tactic I used on the first two houses.
Since the eviction cost $850, it would make more sense if I paid the tenants to vacate the premises voluntarily within 5 days. At the end of the five days, the people would call me and I would come to the house. Upon receipt of the keys, I would pay them $500 in cash. After wards, I would change all the locks on all the doors of the house.
From a business standpoint, I would rather pay $500 for a voluntary leave than $850 for an eviction. The last time I employed this tactic, it worked very nicely. Those tenants even cleaned the house before they left!
Plus, if this somehow wound up in court it plays to my favor to show I offered the "poor defenseless squatters" money to vacate the premises even after they over-stayed their welcome. And with no lease and no standing, this all would work in my favor.
For some reason, this situation does not frighten me nor does it really concern me. Probably due to one of two things. (1) I don’t believe the situation will get that bad or (2) I am still naive regarding people. I would like to believe I have learned something about people during these past 18 months to warrant some measure of trust in my own judgment.
If you liked that post, then try these...
Crystal Ball on Mortgage Companies on November 14th, 2007
A stock market analyst I am not.
Making it happen on March 28th, 2005
I figured out how much I qualify for.
I had a problem with squatters in one of my properties. A call to the police took care of it quickly. Read about it here: http://shaunsre.blogspot.com/2006/06/house-3-squatters-begone.html
Why are you automatically assuming responsibility for removing the squatters? This is the SELLER’S responsibility. Insist that the eviction occur before the COE and that the premises be delivered to you clean with everything as it was when you made the offer (per the pictures). If this problem ends up in court, it could take you weeks to resolve it. Perhaps your agent can educate the seller’s agent on how to remove tenants.
In addition, the change in ownership could implicitly alter the landlord-tenant relationship. I would consult my own attorney (one that represents me, not the agent) if I contemplated letting the squatters remain.
Hold firm on the eviction prior to COE, and you will be much better off.
I agree with another investor. Somewhere I missed where you bought a new property?
Did you get any communication from them that they understand when to move out? Has the sellers agent told you what they plan on doing? Find out whats going on before calling the cops in early and possibly causing you issues in the future. Just my two cents.
My situation is precarious. Normally, I would resolutely insist the tenants be removed prior to COE. For the four-plex in Texas, for example, this would be a simple exercise.
I have in front of me a great deal: a house really under-valued in the market. On paper, the numbers look encouraging. The rent between the two could pay for the mortgage, insurance, and taxes which in SoCal is no easy feat with 10% down.
And with an extremely motivated seller, and two other interested buyers, I very well could find myself out of this deal.
The question I have to ask myself: Is it worth passing on a great deal just because a few squatters are present? I cannot justify losing this deal just for that.
I do appreciate the support and the advice. And if this blows up in my face, every one of you has earned the right claim the “I told you so” trophy.
Moom, oh yeah you missed it. Last Monday: http://www.changingmydirection.com/maison/2007/05/who_knew.html
Mottz, in the package that I received was a copy of the mail-certification slip showing the signature of the tenant. And I agree. I would rather resolve this without the police involvement.