Crazy AirBNB Squatters & Eviction Need to Know Rules

Dan Austin: [0:00] Hey there, welcome to another episode of the Collecting Keys Friday Focus. You have me here today, Dan Austin, as your host, and I'm going to answer a listener question today. These are some of our favorite things to do on the Friday focuses, and our listener messaged in and said, hey, can you do a Friday focus on evictions? He had been seeing some of the crazy headlines that we tend to see here from time to time, they seem to be kind of becoming more and more common lately about these tenants just staying out in these properties and not leaving. Know there was one recently down in LA, in Los Angeles, where a lady reportedly stayed for five and seventy days without ever paying rent, which is just crazy, and like a mansion too, like she was saying super luxurious. So listener said that he wanted to know more about this, and so that's what I'll do, I'm gonna dive into to some of this stuff today, we'll talk about evictions, and we'll talk about like some of our processes that we follow for evictions, and just some of the generic information you'll need to know, because it is very state and local authority dependent. Sometimes cities have their own codes around evictions, not just the state codes. And as we've come out of COVID, remember there was a lot of temporary eviction moratoriums and different things, especially in states like where I live in Washington, that made things crazy, but most of those have actually just rolled off this last year, so you should be back to normal, or whatever new normal looks like, so don't be scared off by some old eviction moratorium type policies. Anyhow, before I dive in, I wanna share this other story about this tenant, because this one is in my home state of Washington. There's this guy, he decides he's gonna move out of his apartment, he's gonna rent it to this dirtbag, Kareem Hunter for $4,300 a month.

Dan Austin: [1:36] I'm assuming he was furnished. So Kareem moves in, and then according to this article I read, he only paid part of one month's rent and then stopped paying. This dirtbag, Kareem Hunter, basically took over residence here, stopped paying, and then the owner obviously tried to negotiate with him, nothing happened. And then this dirtbag, Kareem Hunter, decides he's going to start doing Airbnb short term renting out rooms, like subletting rooms in this house. So he's generating income, this dirtbag Kareem Hunter is generating income off of this poor landlord's property, and then not paying the guy rent. Like I could get it if the dude's like, hey man, I lost my job, can't pay you this month, but he starts Airbnb ing it out, and then starts paying the landlord, like, landlord's probably not super happy about that, but hey, at least he's getting paid. No, this Kareem Hunter, this guy's a real dirtbag, he's a real like, you know, bottom of the barrel, low life, that he knew what he was doing. He was getting in there, and he was gonna take advantage of this guy, he probably gave him as little money as possible, just to get into that property, knowing what he was gonna do. Now, while we're talking about this, it's a great This is a great example of where, just reading between the lines of this news article, I think this landlord, the owner of the property, did a lot of things wrong, and created his own problem, when it could have all actually been probably resolved, or dealt with in a lot better way. So, the guy only paid part of a month's, one month's rent, that to me already screams like, did he even have a proper lease in place?

Dan Austin: [2:59] Why did he only collect part of one month's rent? Because I know how it goes, I list properties for rent all the time, and you get a lot of sob stories out there, of like, hey, don't have enough money now, or my credit's bad because of these reasons, and I honestly wish I could help all these people, but I'm running a for profit business, you know, I do donate to charities and those sorts of things, and I do always try to do right by my tenants, but again, I am not a charity, I am running a for profit business, so I have to make the right decisions based on local laws, and what's right for my business. This guy I think got taken advantage by this dirt bug, dirt, dirt bug, dirtbag, Kareem Hunter. And so, when I lease up a property, I always collect first month's rent in full, and I always collect a deposit upfront as well, a damage deposit or security deposit, just which is usually equal to one month's rent. Which I think is fair, I think that's a lot of money for people to have to come out of pocket, and they are at least somewhat like financially indebted to this house now, because they've committed quite a bit of money to stay here, they're probably not going to be a dirtbag if they do that.

Dan Austin: [3:58] I also get a lease that's been locked in, reviewed by our lawyer, know, we know exactly what's in there, it's benefiting us and the tenant in the right ways. And then I also get a move in checklist, right, they go in, they go through and look at anything damaged, we both agree on it, both sign it, okay, we're good to go, everything's baseline from there. This Kareem Hunter dirtbag obviously got away with probably not doing that, because had he moved in and done the proper channels, and paid his first month's rent, he could've lived there for thirty days, come the fifth day of the month, or when the rent is actually due, according to the lease, he did not pay, then the eviction process could start immediately in Washington State, and a fourteen day pay or vacate could have been issued, and then if he still chose not to pay or respond, then it could go through the courts, do it's whole process. Within a month, the guy's actually likely going to get removed by the sheriff. None of that happened, so none of that was probably possible, meaning that all the proper channels weren't followed. And what I do know of anything from landlording, is if you do not follow the proper tenant laws, landlord tenant laws, follow the proper channels to the tee, you're probably not gonna win, because you are going to look like a landlord out there who's just wild wild west, trying to take advantage of people, because there are some of those slumlords out there that do do that, they do take advantage, and don't enter into, they don't enter into, you know, these contracts for rent with good faith, right? And so, we don't wanna be those kind of people, you're listening to this podcast, hopefully you're not that kind of person, so just cross your t's, dot your i's on all this sort of stuff. So that's a good example that'll set us up, but before I talk any more details, I want to maybe dispel some myths, or I don't even know if that's the case, but like, there's some terminology that gets used, like squatter for example, and trespassing and all these sorts of things that I think gets used interchangeably when really, when it comes down to the legal senses, it doesn't really matter. So when you have, like let's start with the most basic stuff that most of us are used to.

Dan Austin: [5:51] So when you have a tenant that is paying and their lease is up, and then they start paying you after, even if your lease ends, say you don't have a month to month clause where it's supposed to end, but they keep paying you and you keep accepting your payments, that's a tenancy at will, those people are legally allowed to be there, and you're collecting rent, they're paying rent, they can stay there, even if you don't want them to, that you're actually engaging in this tenancy at will process. Obviously there are channels, depending on your state, you can basically have them move out, not for non payment, but other reasons. In Washington State, when this happens, when we convert basically to just a tenancy at will like that, we have to give the tenant a hundred and twenty day notice of move out. Unless we're going to try to sell the property, and I think that's like a ninety day, or if there's like major construction we're gonna do, it's like a sixty day. There's all these different notices very specific to Washington, and so we have to issue those when this happens, so we try to not let our leases roll month to month. However, if the lease is up, or at any point in time, they just stop not paying, basically that's like tenant and sufferance, So they're basically just kind of holding your property hostage, and at that point, because if you, well I should say, if you follow the proper lease channels, you should be set up to go through an eviction for non payment, all that sort of stuff, tenant and sufferance, and you have a story to tell that makes sense to the judge when you go to eviction court. If you're putting undue pressure on them, or you're doing things that are legal, it's not going to end in your favor. But, they are considered a long term tenant, typically all states that would be considered, well I should say not a long term tenant, but a tenant in general, happens after thirty days of stay. So if you sign a lease, like a long term rental, six months, twelve months, whatever, you know they're a tenant. So then they fall into the landlord tenant laws.

Dan Austin: [7:32] Where it gets tricky is, where you hear a lot of this confusion is around short term rentals, because guests are not tenants, so they do not fall under landlord tenant laws. So the key there is to ensure if you want to have an expeditious removal of people when they're in Airbnb or your short term rental, you need to make sure they don't become tenants. So if your booking stays longer than thirty days, you should definitely be signing leases with those people to protect yourself, and you should treat it just like any other long term property, or long term rental you have, and recognizing that if they all of a sudden stop paying, or the lease is up and they don't move out, you need to follow the proper channels, and if you do that, you will be able to evict them on a reasonable timeline. Where it becomes tricky is, what do you do if they say stay for fourteen days, maybe you don't allow thirty day or longer stays, which is fine, and then they don't leave, right? That's where it gets tricky. Can you walk up there and pull them out? No, you can't do that, but that's when you need to go and call the authorities, and you need to do everything you can to get them out of the property before they become a tenant. And typically in that situation, I haven't heard of anybody overstaying their time, but I have heard of other investors really getting down to the wire, like hey, they're there on the twenty ninth day, they've been trying for like a week and a half to get them out, and they don't want them to roll over in that tenancy. Now, don't know the exact rules, you're gonna have to go look this up, that if you try to get them out on the fifteenth day, but they just, they're just battling you until the thirtieth day, do they become a tenant? I don't know, look that up to be sure, I don't want to give you false information or let you think that I know that that's the fact.

Dan Austin: [9:07] The key point I'm making is short term rentals, longer than thirty day stays, you are risking them becoming a tenant, which means you're risking them going through the eviction process, which could be easy, it might not be a problem for you while you're at, so you don't have to worry about it, or you may wanna protect yourself by either not doing thirty day stays or making sure that those leases are signed. Though that's perfectly up to you to balance out your risk. Some other things we hear about, the term squatter I mentioned earlier, so squatter is just like somebody that just shows up, right? Like they roll up into your property, and they're like, yeah, can just sit here and squat. And now there's different states that have like, you'll hear squatters rights, and all these sorts of things that, it's very variable from state to state. Trespassing and squatters are different. Trespassing is when somebody essentially just like breaks into your property, and just starts taking over, and now they're there. Now that is a criminal act, you can get rid of that. Squatters come with all sorts of other things, like squatters rights, where like, oh they can, you know, adversely, they can take like adverse whatever, adverse possession of your property, take title, that's if they're paying like your property taxes, and they've lived there for like seven years, or ten years, depending on your state. There's all these rules about that, that you probably shouldn't have to worry about if you don't own just vacant random properties all over the place, where people can just live in them, and you not know about it.

Dan Austin: [10:20] But even in those cases, when you have like squatters and trespassers, obviously trespassers, criminal stuff, you can get police remove them, that's not really an issue. Obviously, determining whether they're squatters or trespassers is always going to be the issue, so you wanna make sure you can verify that. So that means like, if you have a property that's gonna be vacant for a while, set up some cameras, you can go to Home Depot and buy that like, little orange ring kit for like $500, just throw those up there, they're pretty awesome, they're pretty visible, it'll keep people away, but you also can like show, hey, this dude just broke into my house and is staying there, he's definitely a trespasser. But with the squatter stuff, is when that gets a little tricky, but then basically, do they become a tenant via the squatters rights, and that's where you just again, just have to follow those rules of whatever your state specific is. And really the moral of the story of what I wanna share here today is like, all the stories and headlines you see out there where it's just this crazy, and you're like, crazy situation, you're like, how the hell did that happen? That's all just because the people that were renting it, or the people that owned the properties weren't doing the right things, they weren't following the rules and the laws, they weren't properly taking into account all the risk factors of owning a property when you're going to rent it, or have it sitting there, which is people breaking in, or people just not paying you rent. Most states, again I rent in a very blue state, we've had some which are known for having really tenant friendly laws, and we've evicted people even through, even through like eviction moratoriums, and those sorts of things, we were able to manage our properties and get tenants out legally, we were able to go through all the different like mediation sessions we had to go through in Washington State to evict people, tons of laws, and we're able to do it in a way that our business is still profitable, and we price that in. We don't expect people to get evicted, but we understand that's a cost of doing business, and we know in our state what that's going to take, and I implore you, just go to your local RIAS, go to your local landlord associations, call up a landlord tenant type lawyer, somebody that basically represents landlords and evictions, even if you have to pay them $500, just say, hey, how exactly do I learn, how exactly do I evict something?

Dan Austin: [12:22] What are the exact steps I need to take? When and how? Because what happens is people try to negotiate on their own with a tenant, they try to be the nice person, or they're just a little lackadaisical, they don't actually take advantage of the timeline and the schedule that's laid out in front of them, next thing you know, things have rolled over, month to month, and now you have a person that it's gonna take four months, five months, six months because you just weren't on top of your shit. That's your fault, not the tenant's fault. So then, a couple other things that I would note here is, what do you do, like how can you avoid evictions? Because yeah, they can be expensive and sometimes you do need to hire a lawyer. My favorite way to do this, just treat them as humans, walk up to their, walk up to the house and just say, hey, I would like to pay you money to leave. You're not paying me rent right now, and you may have even damaged the interior of this property. I'm okay with all of that. I'm not gonna sue you, I'm not gonna take you to court, I'm not gonna put an eviction on your records, you're gonna be able to go and find a new landlord, a new place to stay with a clean record, all these sorts of things, I'm going to pay you.

Dan Austin: [13:21] And start out with a reasonable amount, $1,500, what's one month's worth of rent? $1,500, $2, $4, $5, we've paid people several thousand dollars to move out. And we'll do that when we're taking on tenants, which is a great way to like, get properties from wholesalers that other people don't want, is just say you'll take the tenants in place of their bad tenants, and be willing to take on that risk, and understand how to get them out. You can get really good deals doing that, Mike and I have built our business doing stuff like that. But, being willing to do this cash for keys is going to help you when it's your tenant, when you're buying a property, whatever the situation is, just to help move people along. In that same vein, help them get out, sometimes they're just kind of in a bind, and so if you can kinda link them up with another landlord, maybe you can pay their deposit on a new apartment, or new house, whatever it is, anything to get them out, but you're signing documents showing that, hey, I'm paying you this much, you agree to move out, all these sorts of things. We've taken on properties and bought properties where the tenants didn't have leases, anything like that, and we followed the process, we basically talked to our lawyer about the exact things we need to do to make this thing go fast, and we've gotten people out of houses within seventy two hours of talking to them. So the cashing for keys is always a good way to do things. And then just secondly, like I had mentioned, like, just be human with them. Obviously you're gonna run into bad actors out there, and that is definitely a possibility, but as long as you treat them as humans, and you try to solve the problem with them, you can give it your best shot, and stay on top of it, and keep putting pressure on them to do the right thing.

Dan Austin: [14:47] Eventually, following the processes, you'll get the property vacant, but you have to follow the process, and I always like to just say one thing is, when you're actually going to go through this, don't just like try to be the nice guy. Talk to them, say hey, I wanna do cash for keys with you, I'd like to negotiate a price for you move out, but just to protect me in case something crazy happens, and to protect you, I need you to sign these documents, or I need to issue you this notice of eviction. But don't worry, I'm not gonna go through with it, as long as we can negotiate, but I have to protect myself. So being open and honest with them, but also like filing the right paperwork when it's due. Because what happens oftentimes is people will try and negotiate with a tenant, they'll try and be the nice guy and say, you know what, they're a week late, that's okay, they're a week late every month, but then this month they're two weeks late, they're three weeks late, and then they're a month behind, and then you're like, I'll give them two more weeks instead of issuing the eviction notice, and next thing you know, you're six, eight weeks in the process, or for some people, months. We buy houses from landlords that are months behind in rent, because they're just being too nice, they let the sob stories get to them, and I get it, people really do have rough patches in their life, and we should try and help them out wherever we can, but just giving them a free place to stay isn't always the right thing to do when you're a for profit enterprise. So I'll stop rambling there, I'll get off my soapbox here. I hope this was valuable, and my main point here, just wanted to drive home is, make sure you know how to be a landlord before you start renting properties. Make sure you know the details of the local laws. I assure you, they're not always tenant friendly, one-sided, where you're gonna get screwed and have to let somebody live in your property for five seventy days.

Dan Austin: [16:22] Often times those things happen due to lawsuits, and other crazy things outside of your control, if you did all the right steps. And then secondly, just focus on how to be creative in working with the people in the properties, so that you can help benefit them, and that you can get the property back and vacant, in whatever condition that's best, that you can get it in, that's the best case scenario for you. Other than that, sometimes, sucks to suck, being a landlord's tough, that's why you get paid to own these properties, and that's why real estate is also still a badass investment, and we all choose to invest in it, regardless of the risks of these evictions, or bad actors that are out there. They're such a small group of people, don't let it deter you from being a landlord. Alright, if you found this at all entertaining, or valuable, please let me know at InvestorManDan on Instagram, or any platform you social on. You can also hit up my partner, who also is the co host at Mike underscore Invest, same thing on all platforms. If you wanna learn more about any of our groups, or any of our coaching programs, we do have a new Facebook group, free to anybody that wants to sign up, it's the Collecting Keys Podcast Community on Facebook, I will also have it in my bio on Instagram, hit my Linktree link there, take you there, it's free, no obligation, just sign up, and we're pumping content into there, and we're trying to create a really awesome community, where it's user driven, and you all can really grow together as a group. We'll provide content, but also just networking with like minded individuals. Other than that, have a great weekend.