We know that just the words ‘small claims court’ make your heart rate jump and your nerves tinge with anxiety. And, while we can’t take that feeling completely away, we can at least clarify some of the details to ease your mind. Let’s take a look at some of the most common court scenarios for real estate owners and the likely steps involved.
Small Claims Court Case 1: Eviction
Your Tenant hasn’t paid their rent and is ignoring all requests to do so. Or maybe they’re refusing to honor the terms of their lease – like moving out at the end of the term. In either case, non-payment of money owed IS grounds for taking legal action in the form of eviction. Unfortunately, it’s a complex, lengthy and costly process. Think anywhere between 25 – 45 days, and a range of $400 – $700. It comes with a confusing set of steps that can easily go awry and set you back at square one again. Not to mention, the loss of income for all the months that this drags out, and the potential that your property is being abused by your disgruntled Tenant in the meantime.
We know; this isn’t sounding too promising, right? Well, sadly, it’s really not. And so our best advice to you is to try and settle this with your Tenant yourself, without having to go to small claims court to force an eviction. That’s right – if there is any way you can reach an agreement or compromise with your Tenant, you’re going to save yourself valuable time, money and hassle, AND you’re going to have your property back on the market for a new tenant as soon as possible. Lastly, (and this is the final kicker), these cases rarely work out in the favor of the Owner. Frankly, you are not likely to ever collect on those missing payments and/or related expenses. All in all, an eviction case is NOT an easy ride!
Small Claims Court Case 2: Poor Condition of Property at End of Lease
This scenario involves both the condition of your property, and the related Tenant’s deposit. Maybe your Tenant is unhappy that you’ve held back some of their deposit, because in their assessment, they left your property in tip-top shape. Or, the state of your property is so poor that you’ve kept the full amount AND believe that your Tenant actually owes YOU in damages. Obviously, the major difference in these two cases is which party is taking which to small claims court.
Tenant Pursues the Case: For an Owner to defend their position in keeping a Tenant deposit, they must have detailed before-and-after pictures of the condition of their property, and complete documentation of related expenses. These cases tend to fly through the court very quickly, and the more-prepared party comes out the winner here. Think of this scenario as the real estate version of ‘innocent until proven guilty,’ and you’ll understand why the Tenant often comes out on top. In some cases, the Owner is even charged with compensation for the Tenant, over and above the deposit amount, if it is deemed that the Owner wrongly withheld funds from the Tenant.
Owner Pursues the Case: This scenario is more rare, and that’s because it really only makes sense in a situation where the amount spent on damages is significant enough, and where there is a good chance of actually collecting the funds if the case does go in the Owner’s favor. The preparation, legwork and court costs simply don’t make sense in most scenarios. Again, our advice is to try and avoid small claims court altogether here, by attempting to reach a settlement with your Tenant yourself.
So, that covers two common real estate court scenarios, and their significant challenges. While we cannot say that it’s our favorite part of our work, we do have experience in evictions and small claims court cases, and can help you navigate these treacherous waters. If you find yourself in this unfortunate situation, please reach out to us before you take a step further – call us today at 480-270-5355. We’re happy to help! Now, learn more about managing a rental property in our article, Who is Responsible? Tenants Vs. Landlord.