Eviction and Debt Collection Process
My tenants currently have a signed lease with me from May 2010 to May 2012. Due to the fact that the house is in the foreclosure process and has an auction date of March 30th, (which they are aware of) the tenants have stopped paying their rent and want to stay in the house for free. I am working with the bank on a modification as to try and save the house. The tenants will be 2 months overdue with their rent as of Feb. 8th. How do I get the money they owe me, and evict them?
There is definitely a learning curve to understand the eviction and debt collection process. Luckily for you, the Arizona Justice Courts have a self help packet that contains forms for you to fill out and will walk you through the process. Some of the justice courts have information clerks and self-help centers also. The laws governing this issue are contained in the “Arizona Residential Landlord Tenant Act” which can be found here: http://www.azsos.gov/public_services/publicatio…
By reading through the Act, you will find your requirements to remove a tenant who is not paying rent. Your first requirement is to provide a written notice that you have not received the rent and that if the tenant does not pay within 5 days of the letter, you are terminating the lease. The rest of the process is to lengthy to explain here.
If you are unable to spend sufficient time to learn this process on your own, you can find an attorney either to do it for you, or to advise you on how to do it yourself. Not every attorney will offer this advisement service, but I know a few attorneys who do, myself included. I always tell tenants that no matter what happens with the house, they cannot live for free. They will be obligated to pay someone for the time they are living in the house, whether that is you, or the new owner after the foreclosure sale. Additionally, under Arizona and Federal law, in most situations the tenant has the right to have the lease honored after a foreclosure sale. However, the tenant also likely has the right to terminate the lease once a notice of foreclosure sale is recorded (based on a provision in most leases). Of course, even if a tenant chooses to terminate the lease, they still likely have an obligation to pay rent for the time they live in the house.
As far as the foreclosure sale and the loan modification, I imagine you may have other financial problems as well. I recommend scheduling an initial consultation with a debt/ residential real estate attorney. Even if you do not want to hire an attorney, obtaining an evaluation of your situation and advice for a strategy going forward can be invaluable.