THE PROPER USE OF STIPULATIONS

What is a Stipulation?

A Stipulation is an agreement between the parties of an eviction action that sets out when the resident will pay certain sums, when the resident will vacate in some situations and what will happen if the resident fails to pay the sums or vacate. A Stipulation is a legal document that is submitted to the court and signed by the Judge. Once signed, it becomes an Order of the Court and is enforceable by the manager in the even the resident fails to comply in any way. A Stipulation is not simply a hollow, unenforceable agreement between the parties. It is in essence a Final Judgment that is deferred. If the resident complies, no Final Judgment is ever needed. If the resident fails to comply, a Final Judgment is entered and the resident is removed. The most common misconception is that stipulating means giving up something or caving in to the resident’s demands. This is the farthest from the truth. The decision to use a Stipulation is made by the manager, and the manager calls the shots and sets the terms. If the resident does not agree, no Stipulation is signed and no harm has been done.

Benefits of Stipulations

Stipulations can be an excellent resident retention tool. If a resident is under eviction for nonpayment of rent, the resident has some choices. They can fight the eviction, or they can move out. If a resident is going to move out, they will need money to move. The resident sits back and does not pay rent during the eviction, saving money so they may move. Usually, the manager does not want to play any more games with the resident, as there have already been a number of broken promises. If the resident comes to the manager begging to stay and offering to pay some money, the manager is usually not sympathetic, and the resident either fights the eviction or leaves some time during or at the end of the eviction. This is where the Stipulation comes into play. A Stipulation allows the manager to accept money without jeopardizing the eviction process. A Stipulation also can set a fixed date for the resident to vacate, and if the resident fails to do so, the eviction will continue, lessening the time to remove the resident.

1. Allows the manager to accept rent without killing the eviction.

2. Puts the resident on a Court-ordered and enforceable payment plan.

3. Prevents the resident from contesting the case or contesting the case further if already contested.

4. Sets a fixed date in certain situations for vacating.

5. Allows manager to collect attorney fees, late fees and any other amount on which the parties can agree.

6. Allows the eviction to start right up again upon noncompliance; i.e. failure to pay or vacate, if applicable.

7. Avoids court hearings or trials

8. Allows any rent that was deposited into the court registry to be released to the manager.

9. Cuts down on the anger involved with litigation and prevents angry destruction of the property.

When Can You Stipulate

You can only Stipulate after an eviction has been filed with the court. You cannot use a blank Stipulation form or imply that an eviction has been filed. This is a serious mistake that some managers make and can get a manager in a lot of trouble, as it is simulating legal process. Once the eviction is filed, you can Stipulate at any time during the process even up to the moment the Sheriff is at the door removing the resident from the premises.

When Should You Stipulate

If the resident’s only problem is nonpayment or late payment of rent, the situation is ripe for Stipulation. Ideally, the manager should only enter into a “Pay and Stay” Stipulation if the resident shows that they have a good portion of what is owed, or will have a good portion within a few days. If the resident has filed an answer and posted rent into the court registry, this is usually a prime situation for a Stipulation. If the resident is asking you for a week or so, or has paid for or wants to pay for an extension, you may want to consider the “Leave at a Fixed Date” Stipulation.

1. The “Pay and Stay Stipulation” – This type of Stipulation should be used only if you are not having any other problems with the resident other than nonpayment or late payment of rent or other charges. You do not want to use a “Pay and Stay” Stipulation if you are having major problems with the resident or just want the resident out. While this Stipulation does not “solve” the resident’s financial problems, it enables you to continue the eviction if any payments are missed. This is an extremely successful Stipulation, and in the vast majority of cases, the resident complies with the Stipulation and gets back on the normal on- time payment routine. This Stipulation has resulted in many residents not having to be evicted from the premises and saves all parties a lot of grief. Additionally, if a resident has posted rent into the court registry, this Stipulation will allow this money to be released to the manager and avoid a court hearing or trial.

2. The “Leave at a Fixed Date” Stipulation – This is an excellent Stipulation to use if there is a problem with your eviction case such as a defect, the resident has contested, or the resident simply is asking for more time to stay. The manager can agree that a certain sum is paid by a certain time, the resident can “buy” more time, or the parties can agree on a fixed date for the resident to vacate with no money being exchanged. Many times a resident just asks for a week or other short period and promises to vacate. The manager is often not apt to want to do this and refuses. The resident the files and answer with the court, the Judge sets a hearing, and the resident ends up staying for a far longer time than the one week for which the resident originally asked. The “Leave at a Fixed Date” Stipulation is excellent to use if the resident has posted rent into the Court registry, or the manager is holding a last month’s rent or advance rent. The Stipulation can address these issues and allow the manager to access these funds quicker.

The Mechanics of Stipulating

If the resident comes to you and wants to “cut a deal”, pay and stay or leave at a fixed date, the manager needs to immediately think Stipulation! The manager should never accept any money, make any agreements or have a Stipulation signed by anything less than ALL the parties to the eviction action. The manager needs to see how much money the resident has, how much the balance is and how the balance will be paid. Once this is determined, it is just a matter of filling in the blanks on the Stipulation that the attorney provides.

Avoiding Stipulation Mistakes

An improperly filled out Stipulation can be worse than not stipulating at all. The manager needs to take their time, read the Stipulation Instruction Form and fill in the blanks step by step.

1. Never accept uncleared funds when stipulating. Insist on money orders.

2. Never stipulate unless all parties are present.

3. Avoid stipulating if resident has absolutely no money, unless it is a “Leave at a Fixed Date” Stipulation and you want them to leave and do not care about the money.

4. Use the proper Stipulation form, be it the “Pay and Stay” or “Leave at a Fixed Date”

5. Send the ORIGINAL Stipulation to your attorney IMMEDIATELY

Suppose the Resident Fails to Follow the Stipulation

Unfortunately, people do not always do what they are supposed to do, so there will be times when the Stipulation is not followed. We have found that the majority of Stipulations are adhered to, making for a happy manager and resident, but there will be times when a payment plan is not met, or the resident fails to vacate per the Stipulation. If this occurs, you need to notify your attorney immediately, and an affidavit of noncompliance is prepared. This affidavit is then submitted to the Judge, and in most cases the Judge signs the final judgment without a hearing, and a writ of possession can be issued for removal of the resident. The entire process of removal of the resident following a noncompliance with the Stipulation takes approximately 10 days, sometimes more, sometimes less. Court is avoided, the resident cannot usually contest or stop the process, and the resident is removed.