Ward takes the stairs.

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Article of the Month for June/July 2002

Eviction After Foreclosure

8 Step Checklist

Question, asked by Kathy:

Hello Ward -

You replied to a question on 3/21/02 regarding eviction after foreclosure.

In this reply you mentioned an 8 step checklist you use. We would be curious to learn more about this checklist- is this available for purchase? download? email?

We just purchased a home at a trustee sale this week and the former owner refuses to move. We have offered cash as an incentive, however he states he will get his lawyer involved.

Do we need a 3 day notice or a 30 day? He is the trustor however his girlfriend, his four children, and mother in law live there as well. Would we need a 30 day notice for them since they are not the trustor??

Also he states he plans to remove attached items to the property, such as the water heater, fence, wood stove, light fixtures, etc. How would you recommend handling this matter?

He also refuses our request to see the inside of the property. How can we prove that the above items were taken?

We plan to talk to a local attorney to do an unlawful detainer Monday morning, but we would greatly value your expertise and vast experience, especially since you have been successful with this for so many years with no vandalism being done.

As always, we look forward to your informative and insightful responses.

Sincerely,

Kathy

===========================

Reply:

Kathy,

It seems that this pathetic fellow is trying to show somebody that he still has some sort of power and control over the property he's lost and he's not about to roll over and play dead. He's intent on demonstrating that he's still a power to be reckoned with.

My approach would be to attempt to reason with him. I would tell him that it would be foolhardy for him to unlawfully take attached items, such as those you described, because they aren't worth very much as used fixtures, appliances or in pieces as a disassembled fence. Nor are they worth the potential criminal hassle he'd be opening up himself for either.

Explain that as of yet he doesn't have an eviction against his credit record-a calamity he can avoid if he doesn't force you to take that step. Explain that he really has the power to avoid such a negative reference-if he cooperates and moves out peacefully.

By the way, the form you need is the 3 Day Notice to vacate. That's because the other inhabitants are just the trustor's immediate family, not tenants. I am attaching a 3 Day notice for you, just in case you don't have one. You need to serve it as a prerequisite to serving them with an unlawful detainer summons.

I'd go out to the property only after I've recorded my trustee's deed and have a conformed copy of it in my possession. That's because CA requires that you be the record owner of the property before initiating an unlawful detainer action against someone.

I go out with another person who acts as a witness (and scribe if I have to modify or append the 3 Day Notice). On a clipboard he carries a couple copies of the notice, some carbon paper, an 8 1/2 x 11 copy of this month's calendar, some business cards and a 35 MM camera that puts today's date on the pictures we take.

Finally, you must realize that in most cases you are going to be the bearer of bad news. You're the one that's going to inform them that they are no longer the owner of the property, that the foreclosure auction took place on such and such date.

For the following exercise, let's assume the owners-in-foreclosure are Ronald & Susan Crawford.

So now, here's the 8 Step process we employ to peacefully regain possession of the premises from the ex-owner. It's the reason why we've never experienced a single case of vandalism against any of the 300+ foreclosures we have bought in our 20 year career as foreclosure investors.

#1. I knock on the front door and introduce myself, and extend my business card. "Mr. Crawford, my name is Ward Hanigan and this is my son, Eric Hanigan. I'm in the real estate business and last Tuesday I participated in a foreclosure auction and when the dust settled I discovered I was the new owner of the property here at 123 Elm Street."

"At the moment I'm somewhat nervous and apprehensive because I don't know how you're going to react to this news, but if we can talk things over for 5 minutes or so I know I'll feel a lot better and I think you will too. May I come in please?"

#2. Once I enter the house I continue with, "Mr. Crawford, it's important to my peace of mind that you acknowledge that I'm not responsible in any way for causing your foreclosure. I guess what I'm saying is that if you have a list of people you're upset with concerning your foreclosure that I don't belong on that list, OK?"

#3. Then, with his agreement with #2, I continue: "Mr. Crawford, please feel free to call me Ward, OK?" (my hand is held outstretched for a handshake). If he just shakes my hand, but doesn't reciprocate with his first name then I ask him , "Mr. Crawford, what do your friends call you??" And he responds with "RJ". Then I'll ask, "May I call you RJ?" and he says "Sure". And I'll say, "Thanks, RJ".

Then I turn to his wife and say, "Mrs. Crawford, please feel free to call me Ward, OK?" (my hand is held outstretched for a handshake). Almost always she will shake my hand and say, "And feel free to call me Sue". To which I respond, "Thanks, Sue".

#4. Then I'll say, "RJ, the state of CA seems to think that at this juncture I only need to give you a 3 Day notice to vacate, due to foreclosure. I disagree with our legislature on this point because I don't think they've thought out how most people actually move. I think most people are like me and move with the help of their friends, co-workers, neighbors and relatives, right? And they're the ones that need more than a 3 day notice to come help you move. So I'm prepared to extend this 3 Day notice (hand it to RJ) to a week from this coming Sunday at 4:00 P.M. if we can come to agreement on two points.

Now, from the public record I can see that you've lived here for about 9 years. During that time you've probably accumulated a lot of gadgets that you no longer use because their novelty has worn off. For example, in my garage right now you'd find a perfectly good bread machine I no longer use. It works fine, but we don't eat much bread any more, so there it sits, along with a lot other unused stuff.

So what I'm asking is that when you move that you leave the property in broom clean condition. So any stuff you don't care to move with you just give, sell, donate or throw away, OK? And Sue, by broom clean I just mean no debris or unwanted stuff left behind, that's all.

And the second point I'd like to agree on is this. I'd like your permission to come visit the outside of the property with a contractor to start getting quotes on some possible exterior work if the opportunity presents itself, OK? We won't be coming in or even bother you with knocking on your door. We'd just be looking at the property from the outside that's all. But I bring it up now so you aren't wondering why I'm out on the sidewalk with somebody just a couple of days from now, OK?

#5. Sue, do you have a calendar of upcoming family activities, perhaps in the kitchen or somewhere close by? I wonder if you'd be so kind to get it so we can be in clear agreement as to the move-out date I'm willing to extend things to? Thanks."

When Sue is out of the room take out your camera and start taking pictures without asking permission while you explain to RJ that another lucky break we've received is that the insurance company that's issued the new insurance policy for fire and vandalism has agreed to let us take the pictures they need rather than sending someone else out to the property and bothering them in the next 10 days or so.

When Sue comes back with the calendar and starts to go ballistic over the fact you're taking pictures, just keeping clicking away while you repeat to her what you told RJ concerning the picture taking. Then abruptly stop for a moment and ask her, "Sue, I hope I'm not rubbing salt into a wound, but why did the foreclosure happen, what went wrong?" And while she and RJ are caught off stride, continue clicking away as you walk from room to room.

Ask RJ if they have any dogs, and if they do, ask him to put them in the garage temporarily while you go in the back yard to take a picture of the exterior of the house.

#6. When you're done taking pictures tell Sue that she'll be happy to hear that you have reinstated her delinquent first loan (if you took title at the sale of the 2nd) and that it's going to be a very positive reference on their credit record since the loan is in their name even though you're paying it every month about 5 days before it's due. Soon that credit item will be rated "Better than agreed" because of the consistently early payment routine you practice. Therefore, inquire if she would look for the loan payment book or monthly payment statement in order to effect a change of address that will route it to your address so you can make the monthly payments as promptly as possible.

#7. Then while both RJ and Sue are together with you tell them that you can also help them in a very important way: "Folks, let me share with you an important boost I can arrange for you as you start out in the rental market once more. You're probably aware of the importance potential landlords place on making sure you've kept your promises with other landlords and that you don't have any recent evictions attached to your names in the Unlawful Detainer Registry (UDR), especially not any recent ones. So if you keep your promise to be out when agreed and don't force me to evict you, you'll be able to sidestep several years of being blackballed by the rental industry. On top of that I'll be happy to give you a good reference and report that you gave me adequate notice when leaving and that you left the premises clean and neat."

#8. "Now RJ and Sue, one more item and I'll be on my way. Please keep my business card for your future reference. That's because some day, no matter how improbable it seems right now, you will have put this foreclosure business behind you and will be on your feet once again, capable of buying another home. When that day comes please give me a call and I will sell you any house I have in inventory for just 10% over my winning bid. I will even show you my actual purchase receipt to certify the deal you'd be getting. I plan to be in this business a good long time to come, so remember to give me a call whenever you feel ready and I'll do my best to make you an outstanding deal, OK? Oh, by the way, can you tell me where you'll leave the key for me to use once you're gone?"

Hope this helps.

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