Barry R. Goldman
Enforcement Of Judgments
About Eviction Judgments
EVICTION JUDGMENTS: TURNING PASSIVE INTO ACTIVE INVESTMENTS
Being a landlord can be one of the most profitable businesses a person or entity can get into. It also takes a special talent to screen tenants and effectively manage cash flow. Sometimes, when either the screening process or the tenant’s life goes awry, a landlord will have to protect his/her interests by removing the tenant from the property (eviction) and securing it for another renter. During the course of the eviction, there are several steps which must be taken, including serving a Notice to Pay Rent or Quit on the tenant, drafting the Complaint to be filed with the court, having the Summons issued by the court, and serving the Summons & Complaint on the Defendant (tenant to be evicted). The pleadings and appearances in court may be handled by an attorney representing the landlord, or, if the landlord qualifies (i.e.: a natural person) to represent themselves in propia persona. After service, usually on an expedited basis, the court holds a hearing to determine the issues and render a verdict (Judgment). Only upon the forcible eviction or abandonment of the property by the tenant does the property revert to the possession of the landlord.
The Diversion of Cash Flow. Consequently, the eviction process contributes, in no small part, from the highest and best use of the property, and efficient cash flow system in the ownership or management of investment property, to a diversion in rental revenue and lag in earnings. Property management companies, dependent on tenants as sources of commissions or fees on the monthly rent, see interruptions in their income with vacancies. Investors, likewise feeling the negative effect of vacancies, are unable to produce rental income and thus support monthly mortgage payments. Maintaining high occupancy and low expense ratios is critical to the effort to sustain profitability on the property, or unit income. Consequently, the inability to rent the unit contributes to waste in the efficiency of the cash flow model due to such lost revenue.
Holding Tenants Liable for Continued Economic Loss. In some instances (defined contractually and by applicable statute), the defaulting tenant may be liable for damages the landlord has suffered from the post-eviction economic loss of the property. Securing a court ordered eviction provides for the return of the premises, but until the landlord enters the premises, the actual condition remains a mystery. The landlord entering recovered premises may discover the tenant left the premises in livable and rentable condition, or may find the tenant vandalized the premises and removed the appliances.
Therefore, the tenant may be held further liable for damages only discoverable on inspection after the eviction including costs of rehabilitation of the property and/or vacancy during the remaining term of the broken lease. Accordingly, the landlord (property owner) may wish to pursue their claim for post-eviction economic damages against the defaulting (evicted) former tenant by securing a second judgment.
Eviction (and Other) Judgments – A Long Term Plan. As a judgment is a long term securitization of money owed (damages), the enforcement of the judgment is likewise a long term process. The judgment creditor (party awarded damages) should not to expect any quick results in enforcement of the judgment. After all, if the tenant had the money to pay the rent, they wouldn’t have been evicted in the first place. While seeking to obtain a quick resolution in effecting enforcement of the judgment, unfortunately, most of the time, it is found the judgment debtor has few assets which may be immediately levied. Enforcement of judgment laws vary from state to state. However, because the universal constant in enforcement of judgments include the availability of involuntary and compulsory tools for enforcement, the judgment creditor (or Assignee) may, with a plan of action, recover a substantial portion of what is due.
Assignment of the Judgment. Assigning a judgment to a professional judgment enforcer is a long term prospect for results. For the judgment creditor, any assignment made should be secured by applicable language within the purchase agreement. The judgment creditor should feel an adequate level of comfort to establish and maintain the business relationship, as the proper purchase agreement will be an actual purchase, rather than a bailment (temporary agreement).
The proper purchase of a judgment is a final purchase; there is no bailment (i.e.: "rent a judgment" for a specific term, or work to recover the judgment while acting on another's interests). The assignment (sale and purchase) of the judgment requires two documents: the Acknowledgment of Assignment of Judgment (CA) (in other states the document may be titled, Assignment of Judgment), and the Purchase Agreement. Depending on the jurisdiction and circumstance of the purchase, the terms and conditions of the Purchase Agreement will vary. The assignment transaction may be compared to the purchase of an automobile from a dealer -- much like the title to an automobile, the Acknowledgment of Assignment of Judgment is a public document declaring the sale and transfer of interest in the personal property, wherein the Purchase Agreement is a private document which details the terms of the purchase.
Benefits of Assignment to the Property Manager. A property manager representing their client acts in a fiduciary capacity. Accordingly, assigning a judgment must necessarily incorporate the interests of the property owner or investor. A property manager may wish to establish a blanket consent to assign the judgment within their management contract, or a specific consent based on the individual judgment. Some property managers have reassigned their judgments to the investor for them to make the final decision on the enforcement, which aside from leaving the property manager without any resolution as to their fees and commissions due, places their client in the unenviable position of enforcing the judgment. In circumstances where the Assignee negotiates the purchase of the judgment from the property manager, rather than the property investor, there still may be the open door for recovery of fees and commissions due, and retain the good will of the property investor, who may be a source of continued referrals.
For the property manager and investor, having the proper recovery apparatus and resource will contribute significantly over the long term to increasing and growing profits. Working toward a common goal of recovering damages awarded by the court against an evicted tenant is something the property manager, investor, and Assignee have in common.
For further information, call Barry R. Goldman at (866) 648-6537.
Being a landlord can be one of the most profitable businesses a person or entity can get into. It also takes a special talent to screen tenants and effectively manage cash flow. Sometimes, when either the screening process or the tenant’s life goes awry, a landlord will have to protect his/her interests by removing the tenant from the property (eviction) and securing it for another renter. During the course of the eviction, there are several steps which must be taken, including serving a Notice to Pay Rent or Quit on the tenant, drafting the Complaint to be filed with the court, having the Summons issued by the court, and serving the Summons & Complaint on the Defendant (tenant to be evicted). The pleadings and appearances in court may be handled by an attorney representing the landlord, or, if the landlord qualifies (i.e.: a natural person) to represent themselves in propia persona. After service, usually on an expedited basis, the court holds a hearing to determine the issues and render a verdict (Judgment). Only upon the forcible eviction or abandonment of the property by the tenant does the property revert to the possession of the landlord.
The Diversion of Cash Flow. Consequently, the eviction process contributes, in no small part, from the highest and best use of the property, and efficient cash flow system in the ownership or management of investment property, to a diversion in rental revenue and lag in earnings. Property management companies, dependent on tenants as sources of commissions or fees on the monthly rent, see interruptions in their income with vacancies. Investors, likewise feeling the negative effect of vacancies, are unable to produce rental income and thus support monthly mortgage payments. Maintaining high occupancy and low expense ratios is critical to the effort to sustain profitability on the property, or unit income. Consequently, the inability to rent the unit contributes to waste in the efficiency of the cash flow model due to such lost revenue.
Holding Tenants Liable for Continued Economic Loss. In some instances (defined contractually and by applicable statute), the defaulting tenant may be liable for damages the landlord has suffered from the post-eviction economic loss of the property. Securing a court ordered eviction provides for the return of the premises, but until the landlord enters the premises, the actual condition remains a mystery. The landlord entering recovered premises may discover the tenant left the premises in livable and rentable condition, or may find the tenant vandalized the premises and removed the appliances.
Therefore, the tenant may be held further liable for damages only discoverable on inspection after the eviction including costs of rehabilitation of the property and/or vacancy during the remaining term of the broken lease. Accordingly, the landlord (property owner) may wish to pursue their claim for post-eviction economic damages against the defaulting (evicted) former tenant by securing a second judgment.
Eviction (and Other) Judgments – A Long Term Plan. As a judgment is a long term securitization of money owed (damages), the enforcement of the judgment is likewise a long term process. The judgment creditor (party awarded damages) should not to expect any quick results in enforcement of the judgment. After all, if the tenant had the money to pay the rent, they wouldn’t have been evicted in the first place. While seeking to obtain a quick resolution in effecting enforcement of the judgment, unfortunately, most of the time, it is found the judgment debtor has few assets which may be immediately levied. Enforcement of judgment laws vary from state to state. However, because the universal constant in enforcement of judgments include the availability of involuntary and compulsory tools for enforcement, the judgment creditor (or Assignee) may, with a plan of action, recover a substantial portion of what is due.
Assignment of the Judgment. Assigning a judgment to a professional judgment enforcer is a long term prospect for results. For the judgment creditor, any assignment made should be secured by applicable language within the purchase agreement. The judgment creditor should feel an adequate level of comfort to establish and maintain the business relationship, as the proper purchase agreement will be an actual purchase, rather than a bailment (temporary agreement).
The proper purchase of a judgment is a final purchase; there is no bailment (i.e.: "rent a judgment" for a specific term, or work to recover the judgment while acting on another's interests). The assignment (sale and purchase) of the judgment requires two documents: the Acknowledgment of Assignment of Judgment (CA) (in other states the document may be titled, Assignment of Judgment), and the Purchase Agreement. Depending on the jurisdiction and circumstance of the purchase, the terms and conditions of the Purchase Agreement will vary. The assignment transaction may be compared to the purchase of an automobile from a dealer -- much like the title to an automobile, the Acknowledgment of Assignment of Judgment is a public document declaring the sale and transfer of interest in the personal property, wherein the Purchase Agreement is a private document which details the terms of the purchase.
Benefits of Assignment to the Property Manager. A property manager representing their client acts in a fiduciary capacity. Accordingly, assigning a judgment must necessarily incorporate the interests of the property owner or investor. A property manager may wish to establish a blanket consent to assign the judgment within their management contract, or a specific consent based on the individual judgment. Some property managers have reassigned their judgments to the investor for them to make the final decision on the enforcement, which aside from leaving the property manager without any resolution as to their fees and commissions due, places their client in the unenviable position of enforcing the judgment. In circumstances where the Assignee negotiates the purchase of the judgment from the property manager, rather than the property investor, there still may be the open door for recovery of fees and commissions due, and retain the good will of the property investor, who may be a source of continued referrals.
For the property manager and investor, having the proper recovery apparatus and resource will contribute significantly over the long term to increasing and growing profits. Working toward a common goal of recovering damages awarded by the court against an evicted tenant is something the property manager, investor, and Assignee have in common.
For further information, call Barry R. Goldman at (866) 648-6537.
BARRY R. GOLDMAN
Member: California Association of Judgment Professionals
Voice: (866) 648-6537
Fax: (866) 648-6536
"By way of deception, thou shalt do war."
office@brgoldman.com
Arizona: 500 N. Estrella Pkwy #B2-441, Goodyear, AZ 85338
California: 25108-B Marguerite Pkwy #161, Mission Viejo, CA 92692
Disclaimer: Barry R. Goldman is not an attorney and does not render legal advice. Nothing here should be considered legal advice. If you are in need of legal advice, consult with your own attorney.
