Dealing with unlawful occupancy in rental properties can happen, even with preventative measures in place. It is a challenging and time-consuming task that every property manager and landlord may have to deal with at some point in time.
In this post, we will explore the definitions of squatter and resident eviction, highlight preventive measures Arrived has implemented to protect investors, and outline ways to reduce your exposure to adverse outcomes from an eviction process.
Finding the Right Property Management Partners
Maintaining a high occupancy rate and maximizing returns for investors starts with finding the right property management partner. Arrived works with experienced third-party property managers to operate in each market, and these professionals have the expertise and knowledge to handle all aspects of property management, from tenant screening and lease agreements to maintenance and repairs.
In the case of an unlawful occupant or lease violation for non-payment, Arrived works closely with these partners to ensure they execute the proper steps to resolve the situation per our established playbook.
Preventative Measures
Before a problem can even present itself, property managers proactively implement various measures to prevent unauthorized individuals from occupying properties, such as installing digital locks with one-time access codes to ensure only authorized individuals can enter the premises. Managers also perform regular wellness checks at vacant properties to identify unauthorized occupants before they become a significant issue. So, even if a trespasser can gain entry and occupy a property, these routine checks ensure they are detected early, and the property manager can move to resolve the situation.
Resident Evictions
Resident evictions occur when a tenant violates the lease terms, fails to pay rent, or does not vacate the property at the end of their lease. Property managers typically terminate the lease and file for eviction if a resident is two months behind on rent payments (60 days plus a buffer period for late fees).
Eviction Process Overview
The eviction process involves several steps, varying in duration depending on the jurisdiction and type of eviction. Here is a general overview:
- Rent demand: If it is a resident eviction, a legal demand for payment or vacancy is issued, providing a specified date for compliance. The demand period typically ranges from 3 to 30 days, depending on the jurisdiction.
- Filing: Once the demand period expires, an eviction case is filed with the court. The filing process takes 1 to 10 days, and the resident usually has 5 to 14 days to respond.
- Summons: The court serves a summons to the resident, typically taking 5 to 21 days. The speed of service depends on the case volume and the backlog of the sheriff or the court’s process server.
- Answer & hearing: A hearing is scheduled if the resident answers the summons. The hearing date can range from 7 to 120 days and is affected by case volume, court backlog, and any actions requested by the judge.
- Judgement & writ of possession: The court awards possession to the landlord following the hearing. A default judgment may be requested if the resident fails to answer the summons. The judgment and waiting period for the Writ of Possession typically takes 1 to 7 days for default judgments and 7 to 30 days for regular judgments.
- Set out: Once the court issues the Writ of Possession, it is forwarded to the sheriff or magistrate for execution. The set-out process can take 10 to 120 days, depending on the availability and backlog of the Writs.
Additional Considerations
It’s important to note that eviction timelines are largely uncontrollable and can vary significantly depending on the jurisdiction and type of eviction. However, our property managers’ proactive steps ensuring immediate issuance of demand/notice and promptly submitting the filing request to the attorney after the demand period expires help expedite the process.
Squatter Evictions
Rarely, an individual may occupy uninhabited property. Dealing with squatters can be a challenging experience, but property managers have a set protocol to follow. If an unauthorized individual is found occupying a property, managers promptly alert the local authorities and follow the standard procedures based on local laws. It’s important to note that the process of removing squatters can vary significantly from state to state.
Addressing Market Challenges with Enhanced Protective Measures
In today's real estate landscape, certain markets present unique challenges that require tailored strategies. At Arrived, we continually monitor our rental markets, and if a market shows a higher rate of evictions or unlawful occupancy, we implement additional tenant screening criteria to protect our investments and ensure stable rental income.
Our enhanced screening measures include:
- Higher income-to-rent ratio: We require a higher-than-industry income-to-rent ratio and monthly household income to ensure that residents can comfortably afford their rent.
- Stricter credit score standards: We enforce a higher-than-industry standard credit score to select financially responsible residents.
- Increased security deposits: To mitigate potential risks, we mandate increased security deposits for conditional applicants—those who fall below our pre-approval thresholds.
- Co-signer requirements: Conditional applicants must provide cosigners to guarantee lease obligations.
These proactive measures help us navigate the challenges of markets with higher eviction rates while maintaining our commitment to providing quality housing and delivering value to our investors.
Final Thoughts
The rental home business can be messy and complicated. With a portfolio of hundreds of homes, there will be challenging situations with individual properties, including squatters, evictions, vandalism, theft, properties that take a long time to lease, renovations that go over budget and over time, etc.
Our team has many years of experience dealing with these issues, and we work hard to minimize the financial impact as much as possible. As much as we try, it’s impossible to completely prevent these issues from occurring, which is one of the many reasons we recommend investors diversify across multiple homes and markets to minimize risk across properties.
On the rare occasion that an Arrived property experiences an unlawful occupancy situation, Arrived keeps investors updated regularly on the status of the property and actions taken.
Overall, the Arrived portfolio performs exceptionally well, with an occupancy rate of 95%. By investing on Arrived and diversifying across multiple homes and markets, you are minimizing your exposure and ensuring that your portfolio is resilient in the face of any unforeseen circumstances that could arise.
