Lessons from Eviction Court: Don't Buy The Boat

There’s an old saying that the two happiest days of a boat-owner’s life are the day he buys the boat and the day he sells it. The warning implied is that most people have no idea of what boat ownership actually entails, so they are relieved when they get rid of its burdens. The same warning applies generally to landlords who try to navigate the rental industry without consulting an attorney, and specifically to those that sue their tenants without seeking the advice of counsel. Many landlords, out of principle or outright anger, end up suing their tenants for damages, unpaid rent, etc. Unfortunately, they fail to consider that lawsuits often trigger counter-suits, whether with merit or without. When that happens, the landlord in question will often tell you that their happiest day was when they got out of the lawsuit that they started.

I witnessed an unfortunate example of this phenomenon recently when a landlord sued a former tenant in Small Claims Court to recover rent that the tenant had failed to pay. Small Claims Court cases have a maximum recovery of $2,500.00 and have a very expedited and informal process that allows a fairly speedy resolution. However, upon receiving notice of the lawsuit by the landlord, the tenant filed a housing discrimination lawsuit against the landlord in Circuit Court, which has a minimum requirement of $5,000.00 as the amount in controversy, does not have an expedited or informal process, and typically requires an attorney to navigate the process. As a result, an attorney for the tenant appeared at the court hearing in the Small Claims Court case and requested that the Court transfer the landlord’s case to Circuit Court so that both cases could be combined, since they involved the same parties and arose out of the same business relationship. Since Small Claims Court is a voluntary process unless the amount at issue is less than $250.00, the judge granted the tenant’s motion to transfer the landlord’s case to Circuit Court and combine it with the tenant’s housing discrimination suit against the landlord.

The landlord left the courtroom in tears that day, realizing that the simple lawsuit she’d filed in Small Claims Court to get the money that was lawfully due to her had now morphed into a huge suit where she, not the tenant, was effectively on trial. What’s more, she was now going to have to spend money to hire an attorney to deal with the case and defend her in Circuit Court. Even if she wins the case there, she will likely still come out behind financially, perhaps in a significant way, without counting all the headache and time spent on the case. You can almost be sure that whatever satisfaction she felt when she initially filed that lawsuit will not compare to the relief she’ll feel when she gets out of that case.  

The Primary Lesson: be very careful when you file a lawsuit, as it opens you up to participating in a process that could bring about substantial costs.

The Secondary lesson: seek advice from your attorney throughout the tenancy on how to deal with your tenant. Don’t wait until the end, file a lawsuit, then find out when counter-sued that you made a mistake during the tenancy.

The Tertiary Lesson: let your friend buy the boat and take you out in it.