Lessons from Court: Potential Pitfalls in Managing Your Own Investment Real Estate

I was in Court this morning representing a Property Management Company in an eviction proceeding. It is always unfortunate when a landlord/tenant relationship breaks down and results in legal action. unfortunate, but necessary at times.

Some private investors in the real estate business think it is more cost-effective to evict tenants themselves – this is one reason why they fail to hold their property in a limited liability company – so they don’t need an attorney to represent them in Court – (an LLC, like a corporation is a distinct legal entity – just because you are the owner of the company, does not entitle you to file a lawsuit on behalf of the company – since it is technically practicing law on behalf of someone else = illegal.)
However, while waiting for my case to be called by the Judge, I got to witness just this morning several cases where the landlord was representing him/herself – to their detriment.  Some of the most obvious pitfalls:

1. When multiple parties are being sued and one party is contesting, failing to obtain a default judgment against the non-appearing party.

2. Failing to attempt to resolve the issue with the tenant prior to the judge calling the case.

3. Failing to Request a Money Judgment, as opposed to simply a possession judgment.

4. Failing to request all damages they are legally entitled to. 

There are others, but that most stuck out to me. The result of the owners that I watched just this morning evicting their own tenant likely resulted in extra unnecessary time and money expended.

I would always advise that anyone who is going into a legal proceeding should have legal counsel. The old saying is: “anyone who has himself as a lawyer, has a fool as a client.”

However, in the alternative, for those investment property owners who don’t want an attorney to appear on their behalf, they should develop a relationship with an attorney to review pleadings, advise about the law, and if the case becomes contested, to step in and assist when needed.