11/19/2023
Why Landlords Need a Receiver
Many landlords accept payments directly from tenants, either directly or through a deposit system such as deposits to the landlord’s bank account or by accepting payments through Zelle, CashApp, or similar payment systems. This can lead to multiple problems during the eviction process.
Tenants can falsely claim tender of payment.
If payment is to be made directly to the landlord, the tenant may claim the payment was offered but the landlord refused to accept the payment. Tenants will sometimes buy money orders, allegedly for rent payments, copy the money orders, and then return the money orders for a refund. This creates “evidence” indicating rent was offered. Tenants may also write checks to a landlord as “evidence” they tried to pay.
Tenants may also claim they tried to make payment, but the landlord was not available to take payment. One way tenants have done this is by simply going to the landlord’s house before rent is due and taking a picture to show they were present with cash in hand.
Similarly, tenants sometimes claim payment was made - personally to the landlord, to someone else at the landlord’s house, or using a rent drop box – but the landlord lost the payment.
Tenants can make payments after the eviction process has begun.
At first blush, receiving money from a tenant does not seem like a problem, but it can cause an unlawful detainer to be dismissed, with the landlord bearing the full cost of the suit.
This unfortunate situation arises when the landlord accepts payment through one of the many financial applications (Zelle, CashApp, Paypal, etc.) or when bank deposits are an accepted form of payment.
After receiving a notice to pay or quit, a tenant may make a small deposit to invalidate the notice. Even worse, the tenant can make a deposit after an unlawful detainer action has been filed. The landlord can, theoretically, immediately return or reject the payment, but such attempts are not always successful.
Tenants can be violent.
Sometimes tempers flair when a tenant is being evicted. A tenant often has personal problems that culminate in an eviction, such as drug addiction, loss of employment, divorce, or poor health. The stress of personal problems and a pending eviction can cause tenants to behave erratically, sometimes violently.
What type of receiver is best?
The most economical receiver is simply to have payments made at the landlord’s office. If a landlord has an office job with multiple people present, the landlord will have witnesses to any transactions, and the threat of violence is reduced as the number of people present increases.
At the high end of the cost spectrum is a property manager. A property management company will act as receiver and will handle most tenant matters. This may be a good option for hands-off landlords, but a good property manager may be expensive.
A low-cost solution is a mail processing service that accepts deliveries, such as PostNet.com, TheUPSStore.com, or TinyBusinessGroup.com. There are many similar services, but these three appear to be the only ones in Bakersfield that have physical locations and allow package drop-offs. There appear to be advantages and disadvantages to each of these three.
PostNet.com has Saturday hours and is generally open from 8:30 a.m. to 6:00 p.m. during the week. It was difficult to get pricing from them over the phone. They seemed more interested in selling their virtual mail services
TheUPSStore.com may be closed on Thursday or other weekdays. Hours vary by location, but most are open from 8:00 a.m. to 6:30 p.m. Be sure to choose a location that is able to receive packages (checks and money orders) on weekdays. Small size boxes from UPS appear to run between $15 and $30 a month, and medium size boxes run between $20 and $50 a month.
TinyBusinessGroup.com is only open 8:00 a.m. to 5:00 p.m. Monday through Friday; however, they are the only provider that takes cash payments and accepts service of process. When a payment or service of process attempt is made, the clerk at TinyBusinessGroup.com checks an instruction sheet and either accepts or rejects payment or delivery of service based on the client’s wishes. Cost is $25 per month.
Full disclosure: I am a partner with TinyBusinessGroup.com
