One Owner’s Eviction Alternative


A Charleston-based apartment company exchanges eviction fees for a plan that can help habitually delinquent customers attain financial stability.

The charge of resident eviction proceedings locally and nationwide has put a strain on apartment operators such as Victoria Cowart, CPM, Vice President, Darby Development Company.

Cowart, who manages more than 1,800 apartment homes in the Carolinas, says, “I came home from an NAA meeting a few years ago motivated to do something about evictions for the residents and the families who are suffering from them,” Cowart says. “I asked myself, ‘What could I do about residents who struggle to make their rent payment each month?’ I wanted something that could help to prevent the situation in the first place; and secondly, something that could help to give today’s homeless the chance at finding more stable housing for themselves.”

Cowart says she had become exasperated by having her onsite teams file evictions each month on the same residents, knowing it was a step that wasted her staff members’ time while frustrating the lives of her residents.

“We file eviction notices most often for non-payment of rent,” she says. “These are the same habitually delinquent customers who come in when rent is due on the sixth day of the month with limited funds. How many of us have heard that the average American doesn’t have $500 saved for emergencies? With numbers like that, and credit scores suffering ever since the downturn in the mortgage market, the rate of eviction filings has only increased. These residents are good customers, and not ones who we would want to lose through vacancy, which would drive turnover.”

In response, Cowart created the program “Micro Lending, Major Changes,” designed to help residents to lower their personal stress, by avoiding monthly late fees and creating a more positive rental history.

How It Works

Following is a summary of details that Cowart provided staff members that they can use to explain the program to financially strapped residents.

The program is for those who come to the leasing office at the end of a given month to pay that month (and who usually function this way), who are otherwise lease-compliant and who have been filed on for eviction three or more times. (Prior to reaching that status, she recommends that onsite staff provide financial aid information to rent-delinquent residents.)

At the point they arrive to pay and have sufficient funds to pay the debt, but are at the end of the month, staff introduce the program to the resident and offer the opportunity to participate. If the resident accepts, he or she must sign Darby’s one-page Major Change Addendum covering this program.

Next, the property manager credits off the amount of the debt, and simultaneously creates a series of scheduled charges in the accounts receivable system for the full amount of the debt at the rate of $100 per month, paid in addition to the normal monthly rent each month until, regardless of the lease term, is paid in full. Once a lease term ends, if the resident wants to move out and he or she has a balance due on the MLMC agreement, they will have that amount assessed against their final account statement. Cowart says that this has not occurred in the program’s limited experience. By making this $100 payment, the resident benefits financially because those monies are going toward their debt rather than wasteful delinquency-related costs every month, Cowart says.

Staff accepts the money being paid that day, which will cover the following month’s rent — along with their first payments into the MLMC program.

Then, each month thereafter, participating residents pay their rent along with the special payment for the micro loan. There are no interest or administrative charges associated with the program.

Cowart says it’s rewarding for her when residents express their gratitude to Darby Development because the program has helped them work toward more stable housing and personal financial situations.

“Their relief and their joy at being able to stop living under the constant, month-in month-out threat of eviction, is so wonderful for us to see,” she says. “It’s great, too, for our onsite management teams to have an opportunity to offer this versus just pounding away at precariously perched residents.”

Helpful and Hopeful

Cowart calls the program both helpful and hopeful, “both of which are important,” she says. “Some folks use it as intended and as their one-time, free, cost-recovery program while others engage in recidivism that negates the program’s intended benefit.”

Evictions can become a costly function of property management and a troublesome situation for resident relations. Cowart says that Darby Development’s court costs are $40 per eviction filing for first filings; $10 for second filings; and $5 for non-service mailing. Court costs vary by state. South Carolina, for example, does not charge per leaseholder; North Carolina does.

“Of course, we lose out on rent and lease breakage fees (liquidated damages) and definitely through time and money spent on staff hours,” Cowart says. “Our public relations image declines when the folks we file on routinely are mad about being filed upon—to say nothing of how distraught and angry those are who we actually evict.

“When you’re at odds with your residents 25 days a month, chasing them for rent and ‘threatening’ to take the roof over their head, they don’t cut you much slack if something breaks or if we make an actual mistake — like humans sometimes do.

“This program is ideal for a percentage of our customer base who are otherwise viable customers and valued neighbors, and we don’t want to just sit there while these relationships strain to the breaking point — leaving us with an empty, often disheveled apartment and a significant debt.”

Cowart says the program is an attempt to reduce negative turnover, heal the poor payment tendencies of these customers and to begin to build their spirit and their rental references. “By achieving these goals, we hope to create longer lasting relationships that are conducted on a positive and mutually beneficial note.”

For the program, Cowart collaborated with Carolina-based law firm Brownlee Whitlow and Praet to create the one-page repayment agreement.

By Paul R. Bergeron III

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