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Property Management Mastermind Show

#149: Eviction Notices Ft. Larry Bellack

Aug 15, 2022 by Brad Larsen

To evict or not to evict, that is the question! In this episode, Brad Larsen and guest Larry Bellack of Possession Partner dive into the world of eviction notices. As the owner, when should you evict, what are the steps leading up and through evictions, and what can you expect if a case goes to court. From fickle judges to moratoriums, this episode of the PMM podcast covers the eviction spectrum.

Connect with Brad's team at www.rentwerx.com!

BRAD: Hey, everybody. On today's episode, I'll be talking to Larry Ballack and we're going to be talking about the eviction services that his company offers. It's going to be a fantastic conversation with a funny few war stories in there. Listen in.

ANNCR: Welcome to the Property Management Mastermind Show with your host, Brad Larson. Brad owns one of the fastest growing property management companies in San Antonio, Texas. This podcast is for property managers. By property managers, you'll hear from industry leading professionals on best practices, new ideas, success stories and lessons learned. This is your opportunity to learn about the latest industry buzz surrounding property management, as well as tips and strategies to improve your business.

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BRAD: Welcome everybody to another edition of the Property Management Mastermind podcast. I'm your host, Brad Larson. Now today's guest is Mr. Larry Ballack, and we're going to be talking about evictions and the processes of those that have to take place. Now we all have to deal with them. You may have an eviction rate that's fairly low. You may have an eviction rate fairly high. But this is going to be a really good conversation. Talking through those processes and how this company can come in and actually take some of that off of your plate and make sure it's done correctly. So without further ado, I want to introduce Larry and let him give give him a few minutes to introduce himself. So we get to know you a little bit. We can talk about all our good looking hair products that were working today, especially mine with this glare and just kind of get down to it and have a good conversation. So, Larry, how are you today?

LARRY: I'm wonderful. And Brad, thank you so much for the invitation. It's absolutely delightful to be here and to be on the podcast and to share some information about evictions and what we do.

BRAD: Yeah, they're never a fun topic, right? Let's be real frank about this. It's not really fun to talk about, but it's it's part of our gig. I mean, we are first money managers and second we are property managers making sure that, one, the tenant has to pay rent. And two, if they don't pay rent, what do we do? We all I'm sure people are screaming at the radio right now saying, well, of course, you know what to do. You post notice and then you go file the eviction at the courthouse. And then you're you know, they're screaming at me saying, we already know what to do, but things change. And justice of the peace judges don't follow laws. And so this is where we need the experts to come in to guide us. And this is a service that you guys offer. So I want you to kind of talk through more of that because it's really something that is of interest for us, because we see more and more outsourcing of certain things. We see outsourcing of maintenance, we see outsourcing, scheduling for appointments, we see outsourcing of leasing, we see outsourcing of business development. And this is an opportunity to have somebody help your company do evictions from A to Z. Perfectly, perfectly perfect. And so I want you to go more from there.

LARRY: Yeah, that's a that's there's a lot to unpack in that statement. But first of all, I would say that the one thing that the entire industry agrees on is that evictions are not fun. And they're they're they're a necessary part of our business. A lot of people have really shied away from even talking about them. But the reality of it is, as soon as you lease your first apartment, there's a good possibility at some point you're going to have to evict somebody for non-payment. So let's let's start with what the last couple of years has looked like. As many of you know, there has been a huge shift from the eviction moratoriums where the entire country sort of put a stop to evicting anyone to now where eviction moratoriums in most states and most counties and most jurisdictions have been lifted, albeit there is one large county still in California that we are aware still has a eviction moratorium. So as it started to unfold and the moratoriums were lifted, it put owners, managers, anybody dealing with multifamily properties into one heck of a predicament. The first one was, how do I now deal with this massive number of folks that haven't been paying for a long period of time? So our company built an eviction management software platform.

LARRY: And basically what it does is it takes it's integrated with all of the property management systems. So think about all the property management systems that are out there that handle the the rent and the information from a resident. All of that information is integrated into our platform. So the information of when a resident paid or has not paid is directly filtered and pushed right into our system. The manager has the ability to then pull up the EMS or eviction management software platform and see all the residents that have been paid that are now ready to receive a notice. And we provide a fully vetted group of attorneys in each state that become the property's attorney to represent them, give them legal advice, and take the eviction all the way through from start to finish. So all that's wrapped up into one platform. So what we've done is we've sped up the time to possession, hence the name possession partner. We partner with the properties to take possession of that unit back faster, quicker. And as you mentioned earlier in the call here to get that done flawlessly done from start to.

BRAD: Finish because that's where people start to screw up and things go wrong because you get into court, for example, we've got so much to talk about in this stuff and we always have to do evictions. But we had one judge kick out one of my property managers because she was not an attorney. Right. We've had judges that will we'll throw things out because an I wasn't. Dotted or a T wasn't crossed or just some technicality or for whatever reason, like the tenant and just throw things out. So there's there's some frustrations there. Now, going back a little bit, the eviction moratorium. One of our fellow ARPA members actually spearheaded that where they got it removed. His name was Robert Gilstrap out of Atlanta, and he actually filed a federal lawsuit, went to the Supreme Court and got the eviction moratorium lifted. And so that's a friend of mine. He's he's in our in our little group of property management company owners that is part of NORTHAM. And he did that. And it was just obviously the grass roots level now that's here under there as far as ancient history. But going forward, I just want to bring that up. The big part that we want to talk about, of course, is the flawless effort, right? So let's go through this kind of in a granular detail because the first thing property managers want to know is, okay, great, how do you understand or how do you know when it's time to file an eviction? Are you setting up a trigger with those property management company owners? So day five, day seven, day three. I mean how do you know when to kind of batch process non payments for rent?

LARRY: Yeah, that's a great question. And so the first thing everybody I think really has to take a deep breath and understand is that in years past we've asked managers to not only play an attorney on TV, but we've asked them to play an attorney. They're on property. It's just a bad situation for everybody. It puts them at the the most the most difficult part of a manager's job is having to convey bad messages or bad information on to a resident and letting somebody know that we're going to free up that that particular unit is very difficult. And so we think they should be out of it completely. We also know then, as you mentioned, is that the number one reason why most of these eviction suits are being thrown out of court is what we call the construct of the of the filing, meaning the name is misspelled. There isn't an eye dotted, there isn't a T crossed. The unit number is incorrect. The information is incorrect. And what happens is very much like playing Monopoly. You do not get to Pasco, you do not get to collect $200. You go back to the start of the game. So our system, since it's tied into the property management system, it's going to pull all the information, it's going to populate all of these fields and it's going to do it correctly.

LARRY: So then we're back to the original question. How do I know when to file? Well, we we've made a few jokes about in this industry is that we know that eviction laws only change on days ending in Y. So it's a joke, but it's really that difficult to stay on top of this. So our system is built so that we know that if rent is due on the first of the month and in your particular state or county or city or municipality, the jurisdiction says three days after that date, you need to send a notice. If they do not pay. That information is built into our software. So it triggers on day three. After the first, it will pull up a notice into the property management system that pushes into our eviction management platform that says these residents are now three days past due. That would receive a notice. And because we don't want the managers to have to remember this, it's built in automatically. So triggers, as you mentioned, are built in, whether it's a three day notice, a five day notice, whether it's a courtesy letter, whether it's a notice to evict every city, every state, every county has a different name as well. So we build all of those into the platform.

LARRY: So when they access it, it literally pulls up a list of all of the residents that have hit all of the criteria. And a little known fact is that some owners will decide we're not going to take someone to court if they owe less than $250 or less than 500, whatever that number is, we build into the system so that it only pulls residents that check the box on all of the criteria so that you can then file eviction and our system will do all of it. Also, the way notices are sent or posted differs in states, differs in counties, differs in cities and differs in municipalities. So we build all of that and our system is built so that, for instance, in Texas, where you have to post a notice on the inside of the door, think about the time that is wasted for a manager or a system manager to walk the property, gain access to the unit, and then have to post the door in the inside. And most of those residents are going to say when they go to court, I didn't receive it. So our system has alternate ways of sending those same notices that are recognized by the court as they legal posting of the notice. We can do all of that for you as well.

BRAD: That was a big question when I was coming up, as we're talking, is how do you show proof? Right, because you know, you're going to get into court and you're going to say no. We posted the notice correctly and and the tenant will say what? I mean, we could all my listeners are screaming at me. I say, I didn't get it. You know, the dog ate my homework or whatever they're going to claim and the judge will look at them. Oh, really? Okay. Well, let me give you a six week stay for free. You know, the craziest things are happening in this time. And the judges, again, I lament a little bit because I'm a I'm an old bitter property manager is they just don't follow the law. Right. And so a couple of things, too. You only evict or should only evict or try to evict through the service for nonpayment of rent if they have a pet that you don't like or if they have a resident a non that's not on the lease agreement. I wouldn't recommend this service. You're gonna have to lawyer up. You're just going to have to get a local attorney and try to evict them that way. The non-payment of rent in a state like Texas is cut or dry. I mean, even if if you go into a courtroom, the first thing the judge is going to ask the tenant in most scenarios is do your rent. And it's a yes or no question. And if they say yes, the hardened judge is meaning that the ones that have been around will stop the tenant right there. They'll put their hand up and say, stop, stop, stop. We only have one question in here. Either you paid rent or you didn't. If you didn't, you know, we have to evict and you have to appeal if you want to go anywhere else. And so in saying that, you guys are typically only focusing on the non-payment of rent type of evictions, am I correct?

LARRY: Yes and no. The majority, as you mentioned, the majority of of evictions are for non-payment of rent suits. And we're I think anecdotally, we're up around 90%. I think we've fluctuated as low as 85%. We've gone as high as 95% on non-payment of rent suits. But because we have vetted attorneys in all of these states that become the attorney for the property, the property can also use that same law firm to evict for other types. The the bad pet, the bad resident bad resident. The resident likes to barbecue on the outdoor patio and an all wood building, all of those things. So our attorney the attorney that they that they get will be able to do all of those as well. But the vast majority is that. And, you know, it's interesting that the the judges will ask those questions. And I do think that the as we know, the majority of residents are going to say, I didn't receive that. And what's interesting is the amount of time that it is taking managers now to walk those properties, to post those notices on the inside, all of that can go away. If you use alternate service, which the mail certified mail return receipt requested is a perfectly acceptable type of service. And it's also done in the platform with the click of a button. So for, for me, and I think for most of our clients that are using this, the fact of not having to deal with a resident when the door is opened or yelling at them, and that conflict that happens when you're doing, they're posting the note, all of that goes away. And also it is indisputable when it is sent and the notice comes back, the judge doesn't have to ask about the notice because it is proof positive that it was sent, it was received or it was refused, which is also non defensible so that it moves forward. And again, we're trying to simplify this process so that the managers of an apartment community can get back to the business of managing the apartment community.

BRAD: All right. Let's talk through this. So they get the notice, right? And this is after a phone call, an email, a text message. I mean, all the stuff that we as managers try to do to follow up in that notice, are they directed to contact the property manager to make themselves whole or are they contacting your team?

LARRY: They are contacting the property. It depends on one of the things that the attorney will do is they will go through and review all of the notices in advance and some of those rules have changed as well. So the attorney is going to advise them as to what the proper language should be. The the single biggest press for us is we want the resident to pay the rent and not be evicted. Make no mistake, our goal is to keep every resident in that apartment community as a paid resident.

BRAD: If we want the same thing, too. And that's really what I was going at, is if the notice says, Hey, contact rent works and try to pay your rent, they get a notice from a third party attorney and all of a sudden the pucker factor hits and they're like, Oh crap, I better actually pay the rent now because I'm going to I'm getting evicted. And so they can call our team and we can work out a payment, come by, certified check today, that type of stuff, you know. And then, of course, you get the folks that will try to make electronic payments. So there's best practices that we could talk through. I mean, a certain point, you want to turn off your electronic payment system to where if they're going to pay at. Are being late for ten days or 15 days. They got to bring a certified check, a money order, etc. And that's going to be internal policy to you because be aware that tenants will say they're going to pay, they're going to pay electronically by themselves a couple of three days that electronic payment will bounce. And next to you, you have to go through the process all over again of sending another notice to vacate. And so there's all kinds of stall tactics that we've seen out there, and I just want to be aware of that. So this way, you know, the first notice hits, the property manager can work with that tenant because we want them to pay as well. We don't want to evict. We just want good paying tenants. Sometimes they need a good punch in the face to remind them, Hey, we're serious, we have a zero tolerance policy. If you're not going to pay rent, you know it's go time. We're going to we're going to go through the law to make sure you get out of there.

LARRY: Yeah, and we could not agree more. I do think that there are there are folks that have really perfected the system in how to stay as long as possible without paying. And the attorney will go through with the individual property manager and the and the regional managers as to what it needs to say. But the goal is that we want to try to facilitate the payment of rent as quickly as possible. And sometimes it does take a little bit of a cattle prod to say, hey, you're way past due. And the property management system is one of the nice parts about the integration is that if they do pay right before they go to court, the system will update immediately and the attorney will also has access to that so that when they go right before they go into court, they check to make sure that there has been payment made. If there's been payment made, they are able to withdraw the eviction suit or they're able to continue it based on making sure that the funds were applied and that they cleared. But there are some specific laws that the attorney will follow for that property to make sure that they don't get duped or don't get sent back to square one. The most important part is to try to get possession as quickly as possible or make sure that resident pays. And so they're very well versed on the tactics and the stall techniques that happen, and we'll advise the properties on what to do and what not to do.

BRAD: Another one is where they try to make a partial payment and in some municipalities courts they're going to say, Oh, you accepted a partial payment, you got to start the eviction all over again. And so your attorney, as you mentioned, would advise the property manager say, hey, they want to make a partial payment of half. You know, they'll tell you what your best case scenario is. Either you accept it, don't accept it. Continue on with the suit. Let me kind of get your take on the whole entire process from start to finish. So we're talking notices to vacate and that's the trickiest part because there's a lot of legality there of showing proof that notice was actually delivered. We got that down. We have a potential attorney that could show up to court on our behalf if the eviction, the evicted, soon to be evicted tenant does show up. They're there. So we go to court, we get granted the eviction. Tell us kind of walk us through that process from next steps from there.

LARRY: Yes. So the so there's a there's a lot during all of those steps, as you mentioned. But we try to really make that smooth. And I think that the the attorney representing the property is going to go to court. I think one of the misconceptions is that a lot of properties think, well, if I get a company to just do the notices, I'm good, I'm covered. And the reality of it is that a lot of stuff happens when you get to the courthouse. And one of the nice parts is that the the judges, as you mentioned, some judges go a little rogue. But the one nice thing is that their attorney that that they use that we have vetted in advance is usually have a pretty nice rapport with the clerks of the courts and they're going to get that all of that stuff handled.

BRAD: And that's huge.

LARRY: That handling.

BRAD: Yeah, Larry, that is absolutely huge that they got to know the clerks because they'll actually help them out. And these attorneys, you know, we have several like here in the San Antonio region, for example, and they all know the clerks by first name. And it's it's just kind of how it works in today's world. The other side of that I just thought of it is if you do a third party service that does post notices, for example, and you get into court, one of the judges may ask the attorney, Did you post notice? No. Well, how do you know it's posted correctly? Well, I'm looking at proof, but did you post it? Did your company post notice? No. And so. Well, throw the case out, you know what I mean? To where? I believe firmly that you have to have one, one particular entity handle it from start to finish. If you start having hand-offs, you know, even a defense attorney, sometimes these these tenants will lawyer up. They'll bring in a brother in law or something in the Justice of the Peace Court, or they want to try to escalate it to county court. I mean, there's all kinds of tactics out there, which is why, again, I highly advise the service like this and we do something like this. We're getting into working with you guys even further because we feel it's a it's a valid service because we don't want to get caught up with the gotchas, you know, and then have egg in your face.

BRAD: Now, the other thing, Larry, the other. The thing is, we have eviction assurance, right? And so a lot of the management companies now are offering something like this to you can call it an eviction guarantee. You can call it a leasing guarantee. There's there's ten different names out there for it. But essentially, we are on the hook for potentially paying for those costs associated with that tenant. And there's lots of good reasons to do that. There's arguably very few reasons not to do that, because if you're doing a good job in screening, you should be able to at least a little bit help with these eviction processes at the end to cover some of your fees, which is why I'm saying we want it done correctly. We don't want to go down the road of posting notice, showing up to court, and then some sort of snafu happens and we've got to start over again. Meantime, the owner is not collecting rent. They're super ticked off. They're going to fire you as soon as they get an opportunity and it goes back to retention. So this is a good retention technique for a lot of managers, is to have a a solid eviction process to where you guys can take it from start to finish. Now, I interrupted you because I was I had to throw that in there with the one part. But I want you to keep going about getting in the court and then trying to get that tinted out.

LARRY: Yeah. And I want to I want to jump to the end. I want to come back and touch on something, too, because you brought up a really, really good point. So so once the final the final judgment and they say, okay, we've we've we now have a writ of possession, our attorney is going to make sure that that then goes to a a constable, sheriff, whomever, and they're going to schedule that for possession. And that is the last step in it. And again, because they have they will have an attorney that is representing them, that process is sped up dramatically. If you imagine an individual property trying to find all of the the correct folks to do this, to file it, to send it in, to represent it, it just becomes incredibly cumbersome. And I wanted to go back to something that you brought up, is that, you know, we joke in this industry, there are three things and three things. Only once you lose, you can never get back in an apartment. And they are vacancy, loss, vacancy, loss, vacancy, loss. That is our equivalent of location, location, location. And the speed in which all of this is processed is critical to running a profitable business and running an apartment community that becomes profitable. And a lot of these courts, whether they're county courts or city municipality courts, whatever they are, there are many of them that are only taking these or hearing these eviction cases on a certain day of the week. The first client that we heard how this really affected them is this particular property.

LARRY: The manager was off on Wednesday. Well, she happened to be working in a property where that particular county heard eviction cases on Wednesdays. So they kept trying to find somebody to to have them go down to the court and do it. And we were like, this is a complete waste of your time. Every week you miss is another week of rent. If you're managing 1000 units and your average rent is 1000 or $100, it doesn't take a rocket scientist to figure out you're talking about a lot of dollars that is lost. So the speed in which this is done are average. Eviction cases are 30 to 45 days from start to finish. When someone from the property is trying to do this, the average days goes up astronomical. And so somebody had asked us the other day about, well, how much does it cost? It costs about the same as you're spending now on evictions, but using a full service start to finish with an attorney who's going to handle this for you from start to finish so that if questions come up at court, there's an attorney representing you that handle it. If the defendant or resident comes up with some crazy excuse, you have an attorney that is handling this for you. It's the kind of things that people just don't think about. But the reality of it is, is we have streamlined this entire process from start to finish to make you smarter, faster and better than anyone else out there. And that's why it's key.

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BRAD: Yeah. We started lowering up a long time ago for evictions. I mean, I made that policy change, I think three or four or five years ago where we just don't go into court without an attorney any longer. And that's the stemmed from where one of my property managers that I mentioned in the podcast earlier was got kicked out of court because she wasn't an attorney and a judge, you know, super uppity and brand new to the courts said, I'm only talking to attorneys, good bye. Yeah. And so you just lawyer up from here on.

LARRY: Yeah. And Brad, another thing that's interesting is that we we will ask companies, when you get into if you're managing one property, a lot of the information can be handled manual on a spreadsheet. But when you start talking about multiple properties, the question we ask everyone is if I asked you today, do you know where every resident is in the eviction process by property, by region or company wide? Usually, unfortunately, the answer is they either laugh at us or say no. In order for me to do that, I have to call all the local councils that I've employed, whether it be in Florida, Georgia, Texas, wherever it is. And we said, Does that sound a little bizarre to you in the state of technology that we are in, in this country right now? Don't you think the technology should answer a lot of those questions for you? We believe wholeheartedly it should. But again, in order for that to happen, all of the information from all those different things, the manager, the lawyer and the software system all has to be talking together. And I think that's the piece that we don't focus on.

BRAD: Enough agreed and to close the loop on the full blown eviction just to kind of talk through this. So get rid of possession and then just turn back over to the manager, correct?

LARRY: No, they actually the constable comes to the property. It's the attorney sends the information back into the system which alerts the manager as to what day it's going to happen and what time usually the constable or sheriff will give a courtesy call to the manager and say, Hey, I'm going to be out there at 10:00 in the morning, blah, blah, blah. And then the then the the officers of the peace, however they're referred to in that particular area, they come out and actually set out the resident out of their property. Now, there are companies, we don't have one, but there are companies that will physically take the furniture and stuff like that and set it outside. We don't get into that part of it. We make sure that the legal process is handled from start to finish up until where the constable says, yeah.

BRAD: There's, there's very few legal things after that. I mean the executing the possession is all going to be locality specific. For example, some of the councils have told us they want two movers per bedroom, right? So if you have a three bedroom unit you've got to show up with six guys and it's a little bit challenging for the manager. Of course, they look at the weather. If the weather is going to have a slight chance of rain, they'll delay it. And, you know, the Sidewalk Party is never fun. But you got to have you got to make sure the constables there because people get weird. You know, people get a little aggravated, they might get a little violent. So you just got to be real careful with it and make sure you have plenty of guys around and guys to help because you don't want to show up with a property manager and high heels on a three bedroom unit with the constable and the constables looking like you're not going to be moving this stuff, you know, and I'm not going to sit here for 10 hours to watch you move this stuff. You need to get a crew here. And so I'm trying to give everyone a bit of advice. Make sure you ask the constable, Who do I need to show up with? What do you expect me to have? So you show up with a proper number of people and because honestly, if it's a three bedroom unit, you show up with two people. Constable could get ticked off and say, I'm not sitting here all day watching you clowns do this. Reschedule. Contact my office. Bye. And they just they're out. And so it's, it's it's an interesting game at the end. We've seen all kinds of different things and I'm only given some experience out there so people can get in touch with the constable to really kind of hone in on that. So they're not showing up and having sad face and have to walk away and explain that to their owner how they screwed up again.

LARRY: Yeah, we agree. And I think that and that's part of I think the learning curve that providing a lawyer that that is going to represent them from start to finish. They walk through all the what ifs. What if this happens? What if this happens? What if the constable shows up and you don't have movers? What happened? And and I think it's you know, it's we always joke about I don't call my plumber to ask him how to build wooden shelves in my house. And and we think that for this particular piece of it, think about the conflict that could happen if the manager shows up in high heels at the very end. The same conflict happens when they're posting notices. So so I think setting the tone, as you said, you've been through this, you've walked in their shoes, you've seen it happen. You've seen good ones, you've seen bad ones. Our goal is to try to make sure, first and foremost, that it is done legally. Perfect. And that is what their lawyer is going to help them with. Number two is we want to remove the conflict as quickly as possible from this entire process from start to finish. And number three is to try to motivate those particular residents to pay their rent, to become a paying resident, to make everything happy because it is difficult moving. It's an emotional time and you want to be able to try to do stuff as quickly as possible with those residents to make it as amicable as possible. And having an attorney to represent them is also means that when it comes time to negotiating or coming up with a payment plan or a settlement plan, whatever that be, they're going to work on behalf of the landlord to make sure that they do something that works for both parties, gets them paid, and keeps the resident in the unit. So we couldn't we couldn't agree more.

BRAD: There's a safety thing here that I want to bring up, too. So, I mean, if you are aware that you're putting your team or yourself in somewhat of a little bit of a peril situation by asking a young lady in your office, a young man in your office to go buy this property, stick your hand inside the front door in Texas or someplace where everyone's got guns. It's a little nerve wracking. And some of the neighborhoods that you may force them to go to or ask them to go to, maybe a little bit sketchy. Right. Let's be real frank about this. These attorneys hire professional process servers and these are guys that are used to doing this all the time. They know how to protect themselves. They know they know the neighborhoods. They know what's going on in the world. They're professional with that. They do it all the time. That's what they sign up for. My staff didn't sign up to go to some sketchy neighborhood to stick their hand inside of a door on a Tuesday morning at 10 a.m.. And I don't want to put them in that sort of peril. And so any comments on that?

LARRY: Yeah, we could not agree more. I mean, if you think about it, I'll tell you, a real life instance is we had a manager call us and said, I have 40 filings to do and it has to be done on certain date. Well, this particular property is upwards of 2000 units. And she said to us it literally would take me three days to walk the property to post all of these. And we said, listen, first of all, from a safety standpoint, it's 100 plus degrees out. It's difficult to do that on a good day and to spend multiple days of doing that. And there's a very good chance that out of 40 notices, you're going to have four or five of those residents are going to be home. And you're going to have to explain to them why you're posting something on the inside of the door that they're that they're going to file eviction. Everything about it is a is a bad situation. It puts you in peril. It puts you in in a possible confrontational situation. And we just believe that a manager's job is to manage the property. Doing things like this are legal process can be dangerous and we just don't think that it's it's good to put our employees in in a position like that. So we keep let the trained professionals do what they're supposed to do. In this particular instance, we have other ways of doing the same thing, which is legally accepted of posting those notices by sending it. So nobody gets put into that situation and it is legally acceptable. And it turned in to be a great, great alternative for this particular manager who was profusely happy with us that they no longer had to do this.

BRAD: Yeah, people are outsourcing their maintenance calls. People are outsourcing their leasing calls. I mean, it's a smart thing to outsource this, to let professionals do it that way. It's done correctly. And again, the property manager doesn't have to do everything. They manage all of the processes that manage the property. And so that's always something to take into consideration. Now switching gears on a tangent type of deal, give me a little bit of information if you have any, about what's going on in the National Front on the evictions. Obviously, they went up in COVID or went down wherever you want to call it. They went up at nonpayment and then down in evictions because the moratorium but kind of what have you seen? And so one of the things I was going to bring up to and you can comment on this is when they they lifted the eviction moratorium, the world thought, oh, my God, it's going to be a flood of evictions and foreclosures and all this other crazy stuff. So just give me a few minutes and talked about some of the national stuff you're seeing and kind of what the trends are right now.

LARRY: Sure. I think the first thing to for everybody, just to take a deep breath and realize that we are getting back to quote unquote, normal, although normal is a new normal for us now. So I think some things are different. There is still a massive amount of demand for the apartment communities. We still have heard on a national basis there are some management companies that are very reluctant still to file evictions, although we did just hear last week that there was a large management company, National, that has just finally told their managers, okay, it's time to start getting caught up. I will tell you, the residual effect is that it has put the courts into a very shorthanded position. So some cases that were being that were being heard in a normal 30 day period are now at 45 and 60 days. And some of the courts have instituted, you know, no more than X amount of cases are going to be heard on a particular day. So if you don't make the docket in the first group again, why it's good to have an attorney do it because they get heard first. That's the reality of it has delayed further some of these cases. But we are seeing a a sort of an uptick in the number of cases that are being heard. The national trend is still that we are trying to work out these deals with the residents so that they stay in their apartment community. I think that is the one nice thing is that it feels to us as if nationally everybody has the same sentiment. The goal is to keep the resident there if they can become an active paying resident on that particular property.

LARRY: I will tell you that California is still the unknown entity. There is a very large county which will remain unnamed that is still on a rent moratorium. We have our attorneys are updating us constantly on how the situation is going in California. But it is a very large county with a large population in the rental housing industry that is still on a no file. They also have a law on the books in California that you can't go back, I believe. And I and I would check with your local attorney. I can remember it's March or April. They won't go back beyond that last year. So there's a there's a whole different way of filing. If somebody has been in there for a long period of time, you actually have to file two cases. It's a long, convoluted way of of trying to recoup some of the rent. The other thing we didn't touch about on is the CARES Act. And there are some folks that have filed for rental assistance. And one of the things that that people can be assured or comforted with us is that part of our system is going to pull if there is a resident that has filed for rental assistance, that we are not going to file on that person because they fall under a certain jurisdiction. And again, the local attorney will tell them who they can and cannot file on. But for those that have legitimately filed and are legitimately getting rental assistance, you want to do everything possible to make sure that they stay in the system, stay in the unit, and our system also pulls that as well.

BRAD: That's good stuff. So you mentioned earlier about being seen first. So as far as getting the court to actually hear or see the case, I've been in court and I've seen the judge look for the attorney in the courtroom and pointed him bring him up to the front, pull three or four files from the bottom of the stack and say, okay, these cases we're going to hear first just to get that attorney again, who's his buddy out of that courtroom quicker. And you're smiling because you know it's true, right? You see it all the time. And it's so if you're a property manager on your own, you're going to be the last one in court. So, yeah, show up at court at 8 a.m.. Right. And they hear you at 945. The very last five cases.

LARRY: Well, you know, and I laugh about it, because one of the questions that always comes up whenever we're showing this is they're like, well, how do you guys get it done in 30 to 45 days? We're on like a six week backlog in Atlanta or Gwinnett County or Fulton County in Atlanta or Dallas or Bexar County. I always mispronounce it.

BRAD: It's yeah, it's Bear County, Baby.

LARRY: Bear Bear Bear County. And the same thing happens is that the judge says, look, I know if I call up Mr. Smith, who's an attorney, he's going to have 65 cases for me. I can clear two thirds of my docket today by having one attorney come up or it's going to take me the rest of the day to hear the other 20 cases. Bottom line is know the judges can be a little fickle, but they're smart enough to realize that they're going to go through the attorney because all the I's are going to be dotted, the T's are going to be crossed, the names are going to be correct. The unit number, they make sure that they've looked at those filings in advance to make sure that there's no there's nothing wrong with the construction of the filing. So they don't get kicked back and they clear them out there in ten, 15 minutes and it moves on. And so that is also one of the byproducts of using a service like ours is you're going to get hurt first and it's going to push you to the front of the line. It's like it's like I bought VIP tickets to see the Doobie Brothers the other day because I didn't want to wait in the long line, and it turned out to be terrific. I got an extra few minutes with Michael McDonald that no one else got, so it paid off.

BRAD: Yeah. Another funny thing about the judges is you can always tell the rookies that just got elected in because they'll actually take the time to listen to the tenants. Again, this is a nonpayment of rent scenario. And the judge will look at the tenor and say, well, did you pay rent? Well, Judge, you know, and they actually sit there. They put their their their shoulder excuse me, their chin on their their hand, and they start to listen to the tenant and intently nod yes and no. And the tenants going on about the dog eat the homework and their kids were sick and this, that and the other and the lost her job or whatever. And. And then you get a hardened judge. I know I said it earlier. You get one of those hardened veteran judges and they just put their hand up, stop right there. That's yes or no. And they try to get through those docket cases because they're sitting on a stack of 50 or 60 or 70. Now, another fun thing I want you to comment on this is what time of year do we see the most eviction filings?

LARRY: That's a great question. So most people move in the summertime before before school. We have. I don't know that I can give you an adequate answer, because.

BRAD: Let me let me just I thought you might have a great start for me, but I'll tell you, we know it's the first part of the year. So like five, six, seven January, you filed those notices to vacate because people spend their their rent money on Christmas and they can't pay in January. And so we're in there filing like crazy that first week of January. It never fails. It's almost like you can predict the courts to be double backlogged.

LARRY: Yeah, I would I would say that the piece for us that has really skewed all of our numbers that we used to in the apartment industry is, you know, there's lots of seasonality. People move at certain times of year, certain times years, they don't move. I think that when the moratorium was lifted, it skewed the numbers of cases that we were getting so bad. We I'll give you an instance. We had a particular company that filed, I think, 25 cases with us the first month we were doing it for them. The next month they gave us 450 cases and we joked with them. We said, Hey, have you guys been like saving this for Christmas or save it? And they go, Well, sort of. We are managers didn't know how to do it. We didn't know what to do. We were looking for a great alternative. So once we filed the first 25 cases, it was so easy. We sent a message out to our entire portfolio. It said, Send us all the cases, and we wound up as the recipient of 450 cases, which turned out to be great, but it totally skewed what we thought seasonality would be.

LARRY: It was literally just a byproduct of them opening up the eviction piece after COVID and after all of these things had opened up. And so we think over the next 12 months we'll have a pretty good seasonality. And I will tell you, one of the things in our system is it documents every piece of analytics so that for a management company or for a property, you can go back and look at which of my properties are filing timely, which ones are missing by a day, which regions are are getting these things through faster? Every sort of analytical thing you'd like to look at, you can say, you know, in January, out of my January filings, which are higher, what particular area, what zip code are filing even more so that all of that is in our system and all of it is exportable so that they can put it into a spreadsheet or they can pull it. You can use it for meetings, you can even incent individual managers or regions. I'm trying to collect a little bit faster and try to file quicker. So all of that is available as well.

BRAD: And that's a tangible that I don't want to skip over because that's really important stuff. I mean, you're going to be able to see which management company, which manager, which homes. I mean, we track notices to vacate, we track actual evictions, but not near as good as we could. If we use a service like yours, which we are, we are already engaging with you and going to start using you. I think it's a fantastic service. We're excited to be a part of it. We're going to get into it. As I told you in the beginning of this episode, we're going to make this like a secret shopper. So I'm going to ask you a few questions about, you know, what rent works is going to do to apply what you're doing with our team. And we're excited to be getting that ball rolling. So I want you to talk more about a little bit of pricing and then how we reach you to kind of talk through some of the stuff.

LARRY: Yeah, it's great. So one of the one of the things that I think people get really nervous of is they say, okay, so so you're going to you're going to give us this network of these approved attorneys that are going to handle this stuff for us. And and in most states, there's only one, and they become your attorney. But but what happens is in our agreements, it is a fixed cost. So in the state of Texas, for instance, at $120, they're going to see the non-payment of rent suit from start to finish. And it's a lawyer that's going to go and represent you. And then if there is more than one, that is a non-payment of rent suit for one single defendant. So if there's another defendant, it goes up a little bit. If there is a if there's a contested somebody contesting it, there is a fixed rate in there. So you're not going to get what everybody dreads about using an attorney. You're not going to get billable hours. I answered a phone call, I answered an email, I answered an a letter or whatever. All of that is a fixed rate. And so that's why we we go in with confidence and say, you're going to pay what you're paying now or less. And in many instances it is dramatically less. For instance, I'm going to pick on Maryland for a minute. Maryland, one of our clients said to us, we thought we were paying 50 to $100 a case, which was the filing fee, and they turned out they were spending upwards of 3000 because their attorney was charging them every time they called, every time they had a question, travel time to the court, all of that goes away using us.

LARRY: And it's pretty simple. When we sign an agreement, you're going to get an attorney representation. Which is from the attorney that's going to represent you. And they become your attorney from start to finish. You're going to get a eviction management software agreement, which allows you to license the software so that you have all that information at your fingertips. At the end of the month, you'll get a bill for any of the cases that you filed that the attorney has filed on your behalf. That is a fixed rate. It comes to you at the end of the month. You pay us immediately thereafter. We're going to front all of the costs to the courts so you don't have to come up with, which also can delay. Oh, you have to have a certified check or you have to pay in cash or it has to be a personal credit card, whatever those crazy rules are by city, by county, by municipality, or the attorney that represents you is going to handle all that. We become the administrative arm for you from start to finish, and it's literally that simple. So from the time you start with us, within the next 30 to 45 days, we're going to build all the rules into the software. Once we say Go, you're ready to start filing your your manager is going to pull the list of residents. They're going to click submit. That stuff comes to us. Our administrative team makes sure everything is filled out correctly. It then gets sent over. The attorney then takes it from that point on and sees it through to the very finish.

BRAD: Me That's exciting stuff because I was just thinking one time one of my managers went to file an eviction and the court was closed that day. They didn't call ahead to find out. And so I'm just you add up those little one days, two days here because your team gets busy. You know, they go intentionally trying to do the right thing, but something happens and they can't get another day ticks by. That's leads to those tough conversations with owners say, sorry, Mr. Owner, we didn't get to file the eviction today because of other insert lame excuse here, right?

LARRY: Yeah. And one of the things that's really interesting to note, and it's it's a little disconcerting, but but it happened to us. We Austin, Texas, which, you know, and their motto is, keep it weird, Austin, keep it weird. Great city, one of my favorite places to eat my way through in Austin. But they have a propensity to change eviction laws fairly frequent and they were the ones that we came up with. The joke we're like in Austin, they only change their eviction laws on days ending and why. But I will tell you that there was a week not in the not too distant past where something was overturned on one day of the week. It was reinstated on another day of the week and it was overturned again later in the week. Those are the kind of situations that no buddy on property would ever be able to keep up with. Yet the attorney which which and they get notices every time this happens was able to keep up on it and making sure that those filings midweek on Tuesdays and Thursdays when those laws had changed, were filed correctly, according to the new law that that became the old law that that became the new law that would have set you back a minimum of a week, or if you had done it twice, it would have sent you back to additional weeks. No, no income coming in.

BRAD: Those are the yeah, this is this is all part of good management is using a service like this. And keep in mind managers that you may not be familiar with it, any of the costs that are incurred should be typically put right back onto the tenant. And so if they're going to make themselves whole with your company and catch up on the rent, well, they're also going to have to be paying all the fees that you may be having to spend to hire a service like this to do it again. That's state specific, at least for lease specific, of course. But in Texas, we would slap it right back onto the tenant and say, if you had paid rent, none of this would be incurred. But since you didn't pay rent, we had to go through the process of filing the eviction and actually potentially showing up to court. Then all of a sudden you magically have an inheritance and you pay us well, you're still going to pay for all the fees that it took us to collect rent. And that's part of any standard lease agreement in most states. Yeah. Now I want you to talk.

LARRY: And as you know better than most, you have to have the right language in the lease in order to charge back. And we have found out that companies that have been in business for long periods of time that you think, okay, well, they've gone through this and they've sometimes they just forget to update it or they forget to check to see if the language in their lease or the language in there in their notice is the correct language and is accepted by the state, the county, the city municipality in which you're filing. And so the attorneys have caught a few of those and said, hey, I would suggest you add this language, because if you're going to charge back, you need to make sure, because the judge can then say, well, yes, you can get your rent back, but you can't get your attorney's fees because you don't have the proper language. Again, one of those things that we should not expect a manager to be up on all that stuff, and yet we do very often.

BRAD: I totally agree. And so last thing I want to talk about, Larry, is I want you to tell us a little bit how we get in touch with you. So where's the best way to find you?

LARRY: Yeah, the best way to find us is just literally. Partner intercom you can get on your web browser and type that in. The company is owned by a very large company called Hunter Warfield. You can go into Hunter Warfield resident interface, but the name of our business is Possession Partner and you can literally just type in possession partner. It will come up, you can schedule a demo on the web, one of the sales reps can walk you through it. Very, very easy to get in touch with us. Very easy for us to do business. And I think there is a misconception that if you sign up your whole portfolio, we're suddenly going to start building your whole portfolio. You only get billed for the cases you file. So if you have 1000 properties or 1000 units, you can sign them up. And we hope that you never have to use this, but in the instance you do, we're going to speed up that process for you from start to finish, and we'd love to do business with you guys and just let us know. But more importantly, we want to be here as a resource to make sure that you're doing the right thing all the time. And we're trying to figure out ways to keep those residents in the property. And that's our main goal here at at at resident interface and possession partner.

BRAD: Perfect, man. I appreciate your time here. We're looking forward to working with you guys here. In the future, we're going to adopt what your what you're talking about. And it's been a fantastic episode. Just kind of learn what you're doing and talk through evictions and have a few giggles here and there about it. But yeah, I really appreciate you coming on and we'll stay in touch with you for sure. Thanks, Larry.

LARRY: We're so excited to be invited. We cannot thank you enough. And I think the more that we're able to help educate in our industry, the better off we all are. So thank you for doing this and thank you for having us.

BRAD: Appreciate it, man. Take care.

LARRY: Thank you.

ANNCR: Resident interface is a comprehensive delinquency management solution for property management companies that serve rental properties with over 500 units located in Florida, Georgia, Maryland and Texas. Resident Interface offers property owners and managers of financially transformative end to end delinquency management experience, where a single contact responsible for the entire process from late payment to eviction management and final debt collection. And we help increase net operating income through technological innovation, operational transparency and respectful recovery procedures. Learn more today at Resident Interface. This has been a podcast episode by Property Management Productions. Be sure to subscribe to our podcast. Leave us feedback and come back for our next episode.

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About The Host

The Host of this Podcast is Brad Larsen from San Antonio, Texas. Brad is the founder and owner of RentWerx, one of the fastest growing residential Property Management companies in Texas that currently manages over 700 single family homes.