What Lawyers Want Landlords to Know

Dave:

So imagine that you have a rental property, everything’s going well. Then you have a vacancy for a month only to find someone who didn’t actually lease out your property is living in it. Today we’re going to talk about this situation, which is otherwise known as squatters and squatters rights.

Dave:

Hey

Dave:

Everyone, welcome to On the Market. I’m your host Dave Meyer, and with me today is James Dainard. James being an investor in Seattle. Imagine you’ve run across squatters a time or two.

James:

This is just part of the nature of the beast. In Seattle, we deal with squatters on the regular. We always at least have one or two going on at any given time. Not fun, but it’s just a new thing. You got to dodge round as an investor.

Dave:

It seems crazy. I don’t know if you noticed this, but I’ve been hearing about it at least more on the news. Have you seen an uptick in instances of squatting in your portfolio?

James:

Yeah, we see it in the news, but we’ve also seen it in our portfolio for sure. A lot of the properties that we purchase and how we get a good buy are actually a lot of times filled with squatters or they’re very problematic, and so we have to deal with it regularly. Anything, and we’re also developers. Developers are really targeted by squatters because they’re vacant homes, they’re waiting for permits, they can check to see the permits pulled, and so we deal with especially a lot in our development, even when we board ’em up, they get inside and then we have to deal with this eviction.

Dave:

Yeah. Well, I’m sorry to hear that. It sounds like a huge pain. And I do think that at least in the media, this is coming up more and more and we wanted to help real estate investors understand what squatters are, what squatters’ rights are, and what landlord’s rights are in these types of instances. And to help us all understand this, we’re bringing on not one but two attorneys to discuss the legalities around squatters rights and what legal action investors and homeowners have to evict or to reclaim their properties. The attorneys joining us are Denise Medina, who is from Detroit, and Patrick McQueen from Phoenix. Let’s bring on these two attorneys and learn more about the situation. Denise Patrick, welcome to the show. Thank you both for being here. Thank you for having me.

Patrick:

Yeah, thanks so much.

Dave:

Patrick, let’s start with you. Can you help our audience understand exactly just what a squatter is to help us frame this conversation?

Patrick:

Well, certainly, and I would say that to preface that the answer to this question as lawyers do we preface everything. I would preface this by saying it depends on what the law in the state says a squatter is. So under original law, which is where I’m at, we basically as real estate attorneys define a squatter as anybody in a home or on land that should not be there, that has no legal right to be there. And I would say that the media right now are portraying squatters as these people who go in and sort of take over, maybe a seasonal home or somebody who’s not there. That happens a lot or more than it should. But I see squatters as a broader category of people who are overstaying their rent or their lease. They’re occupying somebody else’s land when they shouldn’t be. They’ve stayed too long on a short-term rental. Frankly, we get one where it’s family members and cousins stayed too long and you won’t leave. So to me, all of these are squatting situations, but state laws are going to be very specific as to what constitutes a squatter.

Dave:

And Denise, is that a similar definition that you use in Michigan?

Denise:

A squatter essentially is just going to be someone who doesn’t have permission by the owner to either be there or to remain there. So I would agree with everything Patrick said because I think you see when it comes to the news, you’re going to see a lot of it’s people who are like, oh, they broke in and now they’re there. They’re just someone that I have no clue who they are. They’re in my house now. Yeah, it’s actually a lot more common for a squatter to be someone who lease expired and is just there. I think you have more of the common issues of people letting other people live with them, whether it’s the tenor or whether it’s the owner of the home. You let someone live with you and then they were like, oh, I’m only going to be here two weeks, and then they just didn’t leave. So common issues like that. So it’s even like me if I’m not a landlord and I don’t own and I don’t own a home, but if I owned a home, if I let my sister live there and then she won’t leave now she’s a squatter. Yeah,

Dave:

Okay. Interesting. And so it sounds like this is a much broader definition than what has recently been in the news. So it sounds like it could just be overstaying, your lease, refusing to leave a property in addition to the people who are occupying a property without a lease and weren’t necessarily invited.

James:

And I feel like it’s definitely changed and evolved since the pandemic of what people call a squatter or not. We’ve seen a ton of stuff in the news about people renting out their house and then all of a sudden they’re trying to get their keys back or possession back, they can’t get back in. It’s all over the news and it’s in every state too. You’re seeing it. I saw it in New York where someone inherited a house and she couldn’t get it in her own property. And then I’m in Seattle, which we see a lot of occupied homes and what we see a lot too, we just saw something in the news come out saying a man with a $2 million house got barred from even getting on his own driveway because someone had broken. And I feel like it’s just been changed. And really it’s more the burden on the investor now to prove that they’re not a tenant, and then that’s kind of when it becomes a squatter. But as we see this all over the news, we’re also seeing some politicians start to change things around. What do you think the impact of all these news stories and do you guys see any kind of changes going on moving forward?

Patrick:

You mentioned the sort of evolving definition coming out of the pandemic. I think that the pandemic and the eviction moratoriums, perhaps they embolden some people into thinking that this is an okay practice. I think there’s these unique property sharing situations, unique sharing platforms out there, and there are more ways to tell people how to squat. There’s more information about what squatting constitutes and how to get away with it. But I think you’re right that this definition has evolved and squatting has been around for a very, very long time, but I think that the eviction moratorium and that sort of time around there really was what spurred on a deeper look into this stuff. And as you mentioned, there are some state governors who are starting to take action. Maybe it’s because it’s a political year, I don’t know, but we’re starting to see a little bit of movement there. We saw what Governor DeSantis did in Florida. Our governor here in Arizona had an opportunity. There was a jointly signed bill to allow for the quicker removal of squatters, but she vetoed that. So we’re seeing at least some discussion on the topic, and I suspect that that’ll continue to evolve as well. I think state governments are going to start getting a little bit stronger in terms of allowing perhaps law enforcement to make a decision and not have to require that somebody goes through an eviction lawsuit or files a quiet title action.

James:

I’ve dealt with some very weird experiences with people breaking into our homes and claiming that their tenants, there’s actually in Seattle, there’s a corner where there’s people that sell maps to vacant homes with a copy of a lease to other people and they go, Hey, here’s good prospects. What kind of weird, you guys have probably seen some weird things. We hear about all the weird things. What kind of weird cases have you guys worked on dealing with squatters over the last 12 to 24 months? It’s gotten weirder and weirder. I’ve dealt with some extremely like, this can’t be real what I’m dealing with.

Denise:

Well, interestingly enough, if you’re on the west coast, you’re dealing with a very unique situation. I mean, these stories are crazy about Seattle, a lot in California where it’s very wealthy people and very, I guess we’ll use the word poor, very poor people. And yeah, I hear very wealthy people aren’t in their house a lot of the time, so people will just go in there and I guess they’ll start squatting and they’ll be there. But I would say we’ll have to leave that to California and Seattle attorneys. But I think when it comes to Detroit, so I guess, I don’t know if I said this, I’m an attorney out of the Detroit area and squatting is actually very, it’s an interesting topic here because I’m not sure if you’re familiar if any of you have ever been to Detroit. You’re familiar actually. I know Patrick, you went to school in Michigan or are from Michigan, so you’re familiar with Detroit where there’s just a lot of abandoned property where there was just people up and abandoned their homes.

Denise:

So you had a huge, there’s a lot of tax foreclosure going on in these abandoned homes. There’s a lot of people going into these abandoned homes. So a lot of the time people come to me and say, Hey, yeah, I’ve got this house in Detroit. I can’t rent it because it’s in a poor neighborhood or it’s in a bad neighborhood, whatever it is. So now I’ve got a squatter in there. So that’s a true, if you want to talk about mainstream squatter, it’s this abandoned home where somebody just started living there and moved in. You come up with that a lot and unfortunately that kind of squatting is super dangerous. You have just a lot of crime going on. Just whatever crime can happen in an abandoned home that no one’s watching, you don’t even know who the owner is. You’re just there. You took off the boards, you went in, you’re living in this house now. So I think that’s definitely a lot more common. Detroit, I know in Seattle, I know on the West coast you probably don’t have a lot of issue of just abandoned literally blocks of abandoned neighborhoods. So that issue just comes up a lot here, especially in Detroit

Dave:

Now that we’ve learned what a squatter is, what rights do squatters have and how can investors protect themselves this and more after the break.

James:

Welcome back to On the Market podcast.

Dave:

I do want to learn a little bit more about what rights squatters have and how investors can protect themselves in the future. But I’m sort of just fascinated by the idea of squatters’ rights in the first place because it just seems from an outsider perspective, I don’t know a lot about the law that it’s kind of cut and dry. Someone owns this property, aren’t you trespassing? So can you just tell us, Denise, let’s start with you. Can you just tell us the history of squatters’ rights? What are they and who are they designed to protect?

Denise:

I don’t know if I could go way back to where squatter’s rights are coming from, but they all stem from constitutional, they’re all constitutional rights. They’re all stemming from the constitution. Your right. It’s either to your property or it’s even especially your right to due process, which means that, hey, if I am in this property, I’m making a claim, I have a right to due process. That means I have a right to be judicially evicted. I have a right to my day in court. So that’s where that’s coming from. At least that’s where you’re going to hear the biggest argument. It’s in the constitution that I’m telling you I live here, therefore you have to take me to court. Give me due process. Patrick, if you have another take of please.

Patrick:

I do. I actually, I did a bunch of research on this. I was fascinated actually during the pandemic, I wrote a book and it included the history of squatting and we actually get our squatting laws from the ancient Roman times where it was said that if one man left his field to go maybe fight a war and somebody else came and took care of the land and they tended to the crops, et cetera, then after a certain amount of time, that new guy, that new person, that new user, that sort of squatter actually has the right to make a claim to that property actually has the right to keep that. And so over time, those laws have evolved. So the original intent behind squatters’ rights, sort of this concept of adverse possession that you may have heard about was actually to protect the property so that it was getting the sort of highest and best use. People were paying the taxes on it. But now we’ve sort of turned this into something where these people aren’t there to give this property the highest and best use. They’ve completely changed this adverse possession thing on its head and said, I’m going to do this intentionally because I’m just going to do this intentionally, not that I really want to take care of this property.

Denise:

Yeah, I was going to say that if you think of the word landlord, I’m like, I have to go that far back. Property law is so old, it’s the oldest law out there. When you go to law school, your property cases are from the 18 hundreds. You’re not going to find that in the majority of other areas of law. So even the word landlord, you’re going way back, right? Landlord comes from Europe where we’re getting all of our law from. So I think that’s interesting that now we’re coming up this far.

Dave:

So somehow in 2024 in the United States, we’re using Roman and Futile law from generations ago, which sort of explains maybe why there is all this conflict because maybe the law hasn’t been updated in a very long time. But Patrick, tell us a little bit, what are sort of the basic rights that squatters have in, let’s just take one of these more publicized types of squatting where someone takes over an unoccupied building. What rights do squatters have in Arizona and what rights do landlords have?

Patrick:

Yeah, fair question. And Denise kind of hit on this. Each party basically has the right to prove their ownership. So let’s imagine you have somebody who’s squatting, but maybe they have a text message from the landowner, from the homeowner that says, Hey, just don’t worry about paying rent, or there’s some claim that they have. So they have to have at least some form of basis to say, Hey, I’m entitled to be here. And so James mentioned the fake lease. So if they can produce something showing that they’re allowed to be there, then they’re entitled to be heard on that. And so you usually will have to, in Arizona anyways, either try to evict them or you file a quiet title action to say that that document or whatever, their claim is invalid. And so what’s happening during that process, guess what? The squatters are still staying there because a court won’t evict them because they have some basis to make this claim.

Patrick:

Now, if you want to prevail and you want to actually take over somebody’s property, there is this concept of adverse possession and you basically have to act as if you own this property, you’re paying taxes on it, et cetera, for a very long period of time. So you’ve got to show something that you’re doing, and then you get a day in court and that can drag things out even longer, and you can stay there even longer. So that’s largely what squatters are doing. To have true squatters rights means that you actually, if you are more than just a squatter, then you have some sort of real estate right to be there. So I would caution any owner, anybody from having a very loose agreement when it comes to your tenants. On the other hand, as an owner, you have to be pretty vigilant in defending your property.

Patrick:

If somebody is there and they shouldn’t be there, you actually have to go through the steps. Unless you’re in one of these states that’s recently passed the legislation, you actually have to go through the steps of evicting, filing a quiet title, action, going to court, proving your ownership. So it just becomes this big mess. And that’s why we’re hearing about it, because I’ve literally seen people spend a hundred thousand dollars to try to get rid of somebody because this squatter kept putting up, well, here’s a text message and here’s the lease, and it was all fake and all that stuff, but so there are rights. Ultimately the squatters will lose, but there are rights to remain in the property for so long as this proceeding is continuing. Before

Dave:

We move on, Patrick, what is a quiet title? Action?

Patrick:

So anytime there is an issue with title at a property, let’s say that we both receive deeds to a particular piece of property and we have to prove our ownership. Or let’s say that somebody’s been occupying my shed in the backyard for 10 years or whatever, they have to go and prove their ownership. And so it’s basically a lawsuit to prove ownership to quiet any dispute, to stop any dispute regarding title. So we’ll see it if somebody records a false lien against somebody else’s property. We’ll see it in lending situations where the lender has secured too much property and something that wasn’t included in the original loan agreement. So quiet title actually covers a number of different areas, but anytime there is an issue with title, you usually have to file what’s called a quiet title action to stop that issue, to get a judicial declaration as to who owns that piece of property.

James:

Yeah, the unfortunate thing about this, and nowadays, at least in the Pacific Northwest or West Coast, is it takes a long time to prove that they’re not a tenant. And if they have any form of document, it’s going, Hey, nope, they’re covered. They have to go through the formal process, even if it’s fraudulent. The kind of sad thing is you have to go through this whole process. It can take anywhere between six and 12 months to prove that they were never supposed to be there. And then as an investor, you really don’t have, they don’t have any money. It’s not like you can go get the money out of ’em and they just kind of move on. And the things that you hear around town now or over the last couple of years is, I mean, there’s lawyers right now that actually coach people through how to do this.

James:

Our good friend Laika, who has been on the podcast a couple times, I sold their building in Seattle. Someone had moved in, installed a stripper pole in there, was shooting videos to pay for their lifestyle, and they go, no, we have a lease. And they could not get her out. And finally, the police department, because it got put on the news, they came out and fixed it real quick, but when they were leaving, they’re going, no, my attorney said I had a right to be here, and they were actually getting legal advice on how to squat for longer. It just blows my mind. And

Dave:

For those of you who don’t know, Laika is an investor out of Seattle. She works a lot with James. She was on episode three 90 of the BiggerPockets podcast, and she’s actually also the instructor of BiggerPockets Small multifamily Bootcamp.

James:

As an investor, and I know it matters state by state, some states you can get your property back fairly quickly. What ramifications do investors or owners have when this happens to ’em? For us, we have to immediately file for eviction, go through the court, and we have to go through this process, but it’s a long waiting time. How can people protect themselves and what is the legal recourse to get themselves out of that situation? Sometimes this is really bad. They’re paying two 3000 a month for a property. It’s going a year. That’s 36,000 plus damage that’s happening to it. What ramifications do investors have if this happens to ’em? So

Denise:

Let’s see your claim for the property, you’re either going to be claiming that you own the building and this other person is fighting you saying that they own it, or you’re going to be fighting someone who says they have a right to possession. So if you’re fighting someone who’s like, I own this property, then you’re going to have to file quiet title action. But if you’re fighting someone who’s saying, I have a right to possess this property, just meaning, which is what a tenant is, right? They have a right to possession. They don’t have a right to ownership, you’re going to file your eviction action. It sounds like we’re all pretty familiar with the speed at which courts move, which is very slow. Unfortunately, if there is any system that it is very inefficient for whatever reason, it is the judicial system. So it’s going to take you a long time.

Denise:

Unfortunately, at the end of the day, if you prove that you really own this property or you prove that this person does not have your permission, is not a tenant, a lot of the time it’s an occupational hazard of landlords, of investors that sometimes this happens. And most of the time the people you’re going up against, the people who are fighting you regarding possession or ownership of your property, they’re going to be people that don’t have a lot of money. So even if you went back and you sued them for your legal fees or for the money you lost out on while they were possessing, and maybe you couldn’t go rent it, you couldn’t go sell it to somebody else. I know this sucks, but a lot of the time you winning is just you getting them out of the property and that’s it. You can pursue legal action against them, but most of the time you’re just going to be wasting your money because you’re going to pay an attorney to get a judgment that really at the end of the day is just going to be a piece of paper.

Dave:

We do have to take one more quick break, but more from Denise and Patrick, when we return while we’re away, make sure to hit the follow button so you never miss an episode of On the Market.

Dave:

Welcome back to the show.

Dave:

I guess this is part of something I just don’t understand about the law, but I guess this is a civil case or a criminal case. It seems like the people who do this are squatting in these extreme circumstances. Do you seem to do it repeatedly? Is there not a situation where these people are held criminally responsible for trespassing?

Denise:

So trespass is a very different, that’s its own count, okay? You’re talking about things like if somebody’s going to break into my home or come onto my home without permission, let’s use examples here. So if somebody goes into an abandoned property in Detroit and they just start living there, they’re not doing anything bad. No one’s looking, no one’s watching the owner, we have no idea where they are, and they start living there. They start acting like they are the owner or that they are permitted to be there. So if that’s your squatter, that person has now, they’ve been living there, they’re taking care of it. No one has said no. So now if the owner came out and said, oh, police come get rid of these people of trespassing, the police is going to come over and say, no, they have been living there. They’ve been acting like they have a right to possession or to own it, whatever it is. So they’re going to say, okay, you have to go to court and prove what they’re saying is wrong. When you talk about trespass, you’re talking about I’m in my home and somebody just comes in. So at that point, I am there. I never gave you permission. I can easily prove I didn’t give you permission to come in. So the police will come and take them away.

Dave:

Got it. But I guess, Patrick, I’m curious your thoughts on this too, do people get arrested If you’re breaking into someone’s house, why is it that they just get kicked out and there’s no other ramifications for someone who may break into someone else’s property?

Patrick:

The answer is sort of what Denise said is because they are making some claim. So if they’re a pure break in, they have no basis to be there. In most instances, law enforcement’s going to take them and have them removed. But what’s happening in some of these instances is people are putting together some sort of argument that says, I have the right to be here, and here’s a lease and here’s a text message, or here’s who you need to contact and whatever it is. So they’re putting forward at least something to sort of distract the law enforcement to say that they have a right to be here. So it’s this short-term rental agreement that’s kind of, it doesn’t really make sense. There’s this weird lease arrangement that we had. There’s this relationship that we had and he said, or she said, I could continue to stay here.

Patrick:

And so that’s really the distinction. They have something that they’re making an argument on because if they have nothing, then in most instances, law enforcement is going to take care of that. And so what some states, so this transitions into what some states are doing. As we mentioned earlier, some states are making it easier for a law enforcement officer to see through the BS argument that this tenant or possessor is making and to arrest them and to get them out of there quicker. So they’re basically strengthening some of these trespass laws and to allow for law enforcement to make decisions and not just say, well, this is a civil matter. I can’t do anything. Some

James:

Of this just comes down to prevention too, just making sure they don’t get inside the property. And that’s really looking after it, doing checks on your property all the way around, making sure it’s really secure because it is kind of crazy. You can have a unit, someone kicks in the door, the door’s, evidently the jam’s been kicked in, but then they go, I have a lease. And they go, okay, well, they could have just locked themselves out, so you got to go prove it now. And the steps that people are having to take to keep people away is been, we’ve had to do some pretty weird things. I mean, we just bought an apartment building, and this building was overtaken. The owner lived in it. The people had been overtaken by squatters. They were burrowing through each unit, drywall by drywall, ripping all the electrical out, all the heat went away.

James:

And so then they started a fire to keep the building warm. But the problem is this building became this huge issue, and not only was the owner dealing with it, they were getting fined by the city every day and she’s like, I can’t get these people out, and now they’re getting fines. And so we ended up closing on this property, getting everybody out, and now what we’ve had to do to keep them from coming back is we had to hire someone. We got him an rv, he lives in the parking lot and he does checks, and as long as you have bodies on site, it really does kind of keep him away. But you’ve had to come up with all these different things to make sure that your home doesn’t get broken into and taken over. Or sometimes people are putting light timers instead of keeping criminals away. They just don’t want that new tenant. What other steps, Patrick, do you think investors could be taking or homeowners could be taking to really keep their home protected? So this doesn’t happen outside of just having to get stuck in a six to 12 month eviction?

Patrick:

Yeah, no, that’s a great question. So the first thing I always tell people is to get to know your neighbors, particularly if you’re from out of state and you’ve got an investment in another state. Try to get to know your neighbors because, and give ’em your contact information, make sure they know how to get ahold of you if there’s anything that’s odd that’s going on with the property. Second is to monitor your investment property, and that may mean different things for different people depending on the nature of the building, depending on the location, et cetera. But even with land, if you’re a land investor, you should go out and see if anybody’s putting a shed on your land, moving dirt on your land, that sort of stuff. So you need to conduct regular inspections or at least have the third party, like you mentioned, James coming out there, particularly if it’s a seasonal rental or whatever, and it’s in your off season, well, let’s have somebody go out there and make sure nothing is amiss.

Patrick:

The other thing too is to the extent you should always have something in writing with the person in your home or on your land, whether it’s a license to be there, whether it’s a rental agreement, even if it’s just a friend, even if it’s just a roommate, have something in writing that you can at least point to and say, this says I have the right to ask you to leave and you would leave within five days, or whatever it is. So I would say those three things again, get to know your neighbors, conduct regular inspections, and then have something in writing.

James:

So even if you have a buddy surfing on the couch, get it in writing that he’s only there for a short amount of

Patrick:

Time. Some of the couch surfers are some of the biggest ones that don’t like to leave. I would mean it’s an uncomfortable conversation, but I think it makes sense.

Dave:

Denise, I’m curious, in your experience in Detroit, has the situation changed over the last few years? We talked a little bit about how the eviction moratoriums may have made this more popular as well as some social media stuff, but does the municipality or law enforcement’s response to squatters, is it changing or do you think there’s anything that might be changing in the future? So

Denise:

Just in general, the law has not changed. So everybody’s still going to have the right to ownership to possession if they can prove it. So I wouldn’t say that things have changed drastically. I do think the culture in the city, and just related to here in Detroit, I think homes are, we got a mayor, we got a governor. They’re trying to make housing more affordable. They’re trying to make sure that everybody has homes so that this isn’t happening. Obviously you can’t always be 100%. So I think just the culture of people buying homes or living in their homes, houses being occupied, property being occupied has definitely changed. So I’ve been here for the last 10 years I’ve been here. Let’s see, I moved to Detroit in 2013, and then just from then until now, you could see a huge difference in the city and just what’s happening. And you’ve got younger people coming in, more affordable housing. So I’ll add that without all the caveat in that I like to leave it up to our politicians, our elected officials here to make housing more affordable so that this isn’t happening. And I think that that’s happening here in Michigan at least.

Dave:

And I’m just curious, so do you think the lack of affordable housing is the issue? Because bringing that up, because Detroit specifically is one of the least expensive housing markets in the country, so I’m just curious if there’s a correlation there.

Denise:

I have not conducted a scientific study of whether there is some correlation here, but myself, I am a millennial. I don’t own a home. Thankfully, I have a job and I can afford to rent. But I would say that, yeah, I think this is happening a lot. I’m originally from Los Angeles and I’m sure Seattle is the same way. It’s so expensive to buy a house. So I think there’s just a larger homeless population who needs a place to stay. I think that happened a lot here in Detroit where there was also a large homeless population at one point, and there was a lot of abandoned buildings in the city of Detroit. So I think it’s a huge contributing factor that there’s not a lot of affordable housing, and it’s just so expensive to rent. It’s expensive to buy, but obviously that’s just one contributing factor of the many because I’ve never squatted, so I can’t speak for somebody who’s felt a need to squat in a house or who’s been so desperate that they need to be in this situation where they’re starting fires inside of someone else’s house to keep warm. Yeah.

Dave:

Patrick, it sounds like there was some legislation in Arizona that was vetoed. Do you see anything else shifting in terms of how squatters are handled by the judicial system in Phoenix?

Patrick:

I’ve seen a trend, I’ll put it this way, of maybe a softening attitude towards people who are there improperly or illegally. So I would say when I first started practicing, this is 20 years ago in eviction action would take two weeks and the person would spend $1,500 to get rid of somebody in their property. That was sort of the going rate 15 or 20 years ago. And again, it would take no time at all. And over time though, I’ve seen judges being more lenient to people wanting to stay, judges not ordering an immediate eviction and allowing for people to stay a little bit longer or not awarding a full award of past due rent and attorney’s fees to the landlord. So fortunately, or unfortunately, depending on which side of this you’re on, if there is multiple sides, I’ve seen a softening and I’ve seen being able to get rid of these folks more difficult over the past 10, 15 years, much more expensive. And some judges seeming to have a little bit, I don’t know if it’s a heart or how you describe it, but when I first moved out here 25 years ago or so, we had Sheriff Joe and maybe some of your listeners, remember Sheriff Joe out here? He was kind of a big wild cowboy. He was out here. There was no games to be played. And over the years, we’ve had a little bit of a softening of some attitudes, I think.

James:

And as these attitudes softened up, it takes a lot of time and money to get someone out of property. And one thing that we’ve done pretty regularly the last three years is even if they get in and they have a lease, we even will just offer cash for keys, even though they had no ground for being there, because it is just such a quicker, you’re kind of like, oh, I just got stung. I got to try to offer some money to move ’em out. You have to get creative. I’d rather give someone $5,000 to move out now, then wait a year. And it’s really unfortunate. It’s a hard pill to swallow, but it has worked for us quite a bit, especially during the pandemic. I had to give out a lot of different checks and cash to people. Patrick, I see a lot of investors, they get desperate. They do the same offer and then they’ll give them cash and then they don’t leave anyways. And there’s a specific way you really need to structure this with a structured move out agreement, with a release as a tactical thing for investors to try to move this down the line. If they have to pay someone to move out of this property, what kind of paperwork and how can an investor protect themselves to where they’re giving over the funds that the people are actually giving and surrendering the property?

Patrick:

Yeah, no, I mean, I would almost have some third party property manager witness the move out and the exchange, so you can show exactly what was happening here, but you certainly certainly need something in writing. Otherwise you may be getting tricked here. So you need something in writing indicating that they are no longer making a claim to this real estate that they had no rights to begin with, et cetera, just to sort of foreclose any possibility that they’re going to try to come up with something that says, well, this agreement is a little iffy in these sort of areas. I’m going to test it again and I’m going to test this owner again even though they just paid me the 5,000. So you really need a specific agreement outlining your claims, and it needs to be in writing. And I would videotape, frankly, as much of the process as you can just in case you ever need it to show it to law enforcement officer or the court.

James:

Yeah, because what our attorneys have had us do is sign a full release and it motivates them to also sign it saying, Hey, we’re releasing you from any damage you did any possible back rent that you owe us. In addition to that, they’re releasing themselves that they have no claim to live at this property anymore. Exactly right. And that’s been really important for us to have that document because we have had times where we actually did pay, everyone moved out. They had multiple different tenant renters in there as well. The head squatter, I guess. He delegated out some money, he kept more for himself. And then the people came back the next day, they came right back in, and my property manager had on video, he’s like, you’re not supposed to be here. He already paid. And they’re like, see you. And they just walked right back in the house. And so luckily we had every person in that house sign that agreement, and then by doing that, then the police actually just removed them from the house at that point. But it’s really important you structure it in the right way because if that money gets released and you do too quickly because you just want ’em out, you could just be really giving them money to fight your legal case and they’ll be in there longer.

Patrick:

That is certainly a fear. I mean, get the locksmith over there immediately, get everything changed as well, just so it’s not as easy to get in there. But you’re right. I mean, if you’re not structuring it properly, if you’re not getting it signed again, I probably have it videotaped just to show that this was signed and this was what was supposed to happen. You’re in a little bit better shape if you can do those things.

Dave:

Alright, well, Denise and Patrick, thank you so much for sharing your knowledge on this interesting topic with us. We really appreciate it. We will, as usual put Denise and Patrick’s contact information in the show notes if you want to learn anything more about them and their work or connect with them. Appreciate your time.

Patrick:

Thanks guys.

Dave:

Yeah, thank you so much for having me. Thank you all so much for listening to this episode of On The Market for BiggerPockets. I am Dave Meyer. He is James Dainard, and we’ll see you next time for another episode. On The Market was created by me, Dave Meyer and Kaylin Bennett. The show is produced by Kaylin Bennett, with editing by Exodus Media. Copywriting is by Calico content, and we want to extend a big thank you to everyone at BiggerPockets for making this show possible.