Metro Apartment Manager, July 2006

Q: I gave my tenants a 30-day no-cause termination notice but they say they’re going to fight it. So it looks like I will have to evict them. Can you tell me what to expect?

A: Yikes. Isn’t this the same question we dealt with last month? Well, yes it is. And we said we’d talk a bit about negotiated settlements.

Oregon courts (and others around the country) are pushing litigants (that is people suing one another) to work things out without using the court process. After all, judges are quick to point out, a judgment by the court will be viewed as arbitrary; it’s sort of a zero-sum game where one person wins only because another person loses. Settlements that are not imposed, but agreed to — however reluctantly — by the parties are the opposite. Neither gets everything desired, but both get something, so it is a non-zero-summed game.

Courts push the litigants in several ways. First, they might force the parties to talk to each other. Multnomah does the best job of this. If both parties are present, the judge will ask them (”order” might be a more realistic verb) to step into the hall to see if they can work things out. In some other counties, the judges offer or suggest such informal discussions.

It can benefit both parties to settle at this point. If your eviction action is well founded (i.e., the rent didn’t get paid, or the second cousin and his girlfriend and three kids still haven’t moved out), you can still benefit from talking and trying to agree to something. The “something” may only be another couple of days before they move out. The potential benefit is two-fold. First, if your tenants feel like they got something, they are more likely to comply and less likely to be angry and do damage. Second, a trial is always a gamble. If the judge feels you’re being unreasonable, he will look for ways to find for the tenant and, given the dotting-the-i’s requirements of landlord tenant law, the judge is likely to find a way.

Remember that before you can physically reclaim your property, you need to get a Writ of Execution and you can’t get that until four days after you have a Notice of Restitution served on the tenant. If your court date is on a Monday or Tuesday, you will also have a weekend to contend with. So giving a few days may not cost you anything, and if it results in a voluntary move-out, it will save you both money and aggravation.

Oregon is unique among the states in having a process that allows a plan for future action to become part of the judgment. A landlord and tenant can devise, for example, a payment plan that includes both past due rent and future rent (though not more than three months’ worth) and have that plan become part of the court order. It’s commonly called a stipulated order, though technically it as a judgment by stipulation.

Here’s an example. Say you are in court on July 15 for nonpayment of July rent of $500 plus some back rent of $300. And say your tenant can come up with $400 today and $600 every month (rent of $500 plus $100 for back rent) until paid. Your agreement could say, “Tenant will pay $400 today, then $600 on the first of August, September, October, and November. Regular rent of $500 will resume on December 1.” This agreement works because a payment schedule for back rent can be six months into the future and this schedule is four months.

The benefits to you of entering into such an agreement are: (1) you get money that you might not otherwise get; (2) you don’t have a turnover, with the costs that go with that; and (3) if the tenant fails, you haven’t fallen further behind.

The latter point is important. Say, for instance, That August 1 or 2 comes and goes with no payment, not even a call, from your tenant. You don’t need to start the termination process all over. You don’t have to wait until the eighth of the month; you don’t have to serve a 72-hour notice. Instead, you pick up exactly where you left off in court on July 15.

That day, if you had gotten a judgment in your favor, you would have got from the clerk a Notice of Restitution (paying $4), then had that served on the tenant and if the tenant didn’t move within the four days allowed in that Notice, you would have hired the sheriff to remove the tenants from the property.

You do exactly (well, almost) the same thing here. On August 2, you go to the clerk’s office and get a Notice of Restitution. This Notice of Restitution is a bit different, though. Instead of saying, “The court has ordered you to move out” it says, “You and your landlord made a court-approved agreement allowing you to stay in the property. Your landlord claims that you have not kept that agreement.” You have to attach to the Notice an affidavit of noncompliance. There is no form for that, but it would be a simple statement that the tenant did not comply with the agreement by, in this case, paying $600 on August 1. The Notice goes on to explain that the tenant can get a court hearing if the tenant feels he has a legal reason for not complying (or that he did comply). But the tenant has to get that court hearing scheduled for before the Writ of Execution is issued on day 4.

Assuming your tenant doesn’t have a valid defense, you can have the sheriff lock the tenant out after the four-day period has run. It cost you two weeks (from July 15 to August 2, but you got $400 for it.

So stipulated agreements can work for you under certain circumstances.

There is a third form of negotiated settlements that doesn’t usually get lumped with these two, and which I’ve talked about numerous times before. The court process is not fun to use, and is not very user-friendly for either party. There is a big benefit, to both parties, to settle such disputes without going to court. Remember that court costs, process server fees, sheriff fees, and the like will total $355, at a minimum, if you go all the way. The process also takes between 13 and 18 days if you do everything right. And even if you do this sort of thing regularly, it’s easy to make a mistake that will cost you more weeks and more money.

So before you go to court, give the tenant one more chance to comply or move out. Your argument to the tenant is that, while this landlord-tenant relationship has gone sour, it can remain between the two of you. But once you file the eviction, it becomes public record and stays there forever, making it harder for the tenant to find housing.

My usual reminder: each circumstance is unique, so your case will be different. Before you act, be certain about what you do. Don’t rely solely on this general advice; read the law and consult others as appropriate.

This entry was posted on Monday, July 31st, 2006 at 5:36 pm and is filed under notice of restitution, writ of execution, mediation, stipulated agreement, eviction. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.