Monthly Archives: November 2012

California Eviction: Nice Landlords Finish Last

By Stephen K. Shiu, Esq.

I see it happen all the time. Landlords who are sympathetic to tenants and who fail to wake up and smell the coffee can easily be deprived of rental income for 6 months or more! I’m currently trying to convince a family member to commence eviction proceedings against a tenant that has not paid rent for 3 months. I’ll call this family member Joe. Joe, being a nice guy, erroneously, believed every single excuse of the tenant as to why rent was not paid and every single promise by the tenant of future rental payment. The tenant is now trying to negotiate a move out day after the lease term and approximately 4 months after rent was last paid, which is really another stall tactic. Had Joe commenced eviction proceedings immediately after the tenant failed to pay rent, Joe may have only been deprived of 1 month of rental income. This article encourages similarly sympathetic landlords to take immediate action against nonpaying tenants.

Tenants will make all kinds of excuses for failing to pay rent and make you think missed rent will be forthcoming. Why? Tenants don’t want to move, the economy is bad and many people are unemployed, housing is not cheap, and when desperate, a tenant will say anything to squat. Property managers and most experienced landlords are no strangers to tenant excuses and commence eviction actions shortly after a tenant fails to pay rent. However, many inexperienced landlords are sympathetic to a tenant’s excuses for not paying rent. And, like clockwork, after the tenant fails to pay the current month’s rent, the tenant will make other excuses for not pay the following months’ rent. This will repeat until the landlord realizes that the tenant has no intention or ability to pay rent.

Failing to commence eviction proceedings sooner rather than later can easily deprive a landlord of rental income for six months in the case of a crafty tenant. Here is how it can happen:

  • Months 1-3: The tenant asserts numerous temporary hardships preventing the payment of rent. It takes a sympathetic landlord about 3 months to realize that the tenant has no intention or ability to pay rent.
  • Months 4-5: It takes at least 1 month to evict a tenant. Crafty and counseled tenants will delay this process by fabricating challenges to the eviction or even enlisting the help of others to fabricate a claim of a right to possession of the leased premises pursuant to a made up sublease or assignment of lease (add approximately 15+ days for this). And after you finally get a judgment in your favor and finally arrange for the sheriff to force the tenant out of the leased premises (remember that there is no right to self-help eviction in California), the tenant or one of the occupants, all of a sudden, declares bankruptcy (add approximately 1 month or more, plus additional attorney fees to get this resolved and out of bankruptcy court).
  • Month 6: The tenant, having nothing left to lose and angry at the landlord, has damaged or destroyed the premises (e.g., removing fixtures, appliances and/or copper). Be prepared to incur costs repairing and restoring the premises and factor in the time to lease the premises to a new tenant. The landlord cannot effectively enforce a money judgment for unpaid rent and damages because the former tenant has no assets.

While many tenants find themselves out of a job in today’s economy, landlords also have mortgages and other expenses to pay. Few landlords can afford to be out of rental income for even a few months, let alone 6 months or longer. Also, there are tenant attorneys skilled at delaying and defending eviction actions. One attorney claims to have kept a tenant in a home for 14 months! To avoid a situation like this, landlords should properly screen tenants by verifying income, and adding all occupants to the lease as tenants to increase the chances of recovery, and checking credit, an unlawful detainer registry to see if a prospective tenant has been evicted before, and references.

Nice landlords, please wake up and smell the coffee and consult an attorney familiar with eviction and landlord-tenant matters when your tenant fails to pay rent. Failing to properly notice a tenant for failure to pay rent or failing to adhere to eviction procedures will delay or jeopardize the eviction.

The author, Stephen K. Shiu, Esq., is a real estate attorney and broker (CA DRE # 1921212) who offers clients a broad range of real estate services, which include eviction assistance. For more information about these services, please visit Stephen can be reached at (213) 359-8389 or via email at:


Does the president drive the economy?

Jim Paulsen, chief investment strategist at Wells Capital Management, says that the economy will improve despite the election.  He believes that the president does not drive the economy and economic growth is correlated with the existence of gridlock and a split power base in Washington.

“In the last four years, the first two under Obama were a lot worse than the second two — in the second two there was more gridlock and split power and the economy came back and the markets went to new highs,” he says. “I don’t think that’s just a coincidence. I really think the private sector is the driver going forward and the government’s along for the ride.”


Mortgage Interest Rates Moved Slightly Lower This Week

Mortgage interest rates moved slightly lower this week according to Freddie Mac. Despite a slight rise in interest rates last week to an average of 3.41% for a 30-year fixed-rate home loan for a strong borrower, the rate lowered to 3.39% this week.   The 15-year fixed-rate also dropped from an average of 2.72% last week to 2.7%.  To get these rates, borrowers paid an average of 0.7% of the loan balance in upfront fees to the lender.  The rates are hovering near the all-time lows of 3.36% for the 30-year and 2.66% for the 15-year, which were set last month.   (And I thought that my mortgage interest rate of 5.875% when I bought my home back in 2006 was an amazing rate!)

For a home buyer, continued low interest rates only increase the competition for homes that are in short supply in the Los Angeles area.  Therefore, a home buyer will need to make a more competitive offer – either by offering a higher price and/or making an offer that is less dependent on financing.  On the flip side, these low interests rates greatly benefit a homeowner seeking to refinance his or her property.  A down payment in the case of a home buyer or equity in the case of a refinancing homeowner of 20% of the home’s value is typically required to get these rates.