Asheville – “I’ve rented a few apartments in my life, but thankfully have never been evicted. When I learned that late rent notices were up 95% in 2022, it makes me wonder if people are still recovering work-wise from the past two years. ” So wrote Kayla Brennan in calling attention to a summary of data compiled by Jana Freer of Legal Templates in an article, “The Truth Behind Being a Landlord in 2022,” https://legaltemplates.net/resources/2022-landlord-struggles/. Other key takeaways from the article are that the number of rent increase notices prepared increased 84% nationwide and year over year, with the average rent increase being 14%; and evictions were up 36%.
Legal Templates is a company that helps individuals with legal paperwork. Project Manager Madeline Weirman describes their website as a “document builder enabling users to create and design legally-binding documents in minutes at a fraction of the cost it would take through a lawyer.” Weirman contributed data specific to Asheville and North Carolina for this article. Since the company’s founding seven years ago, Legal Templates has created over 10 million documents for clients, and it now boasts 900,000 registered users. This line of business puts the company in the possession of a lot of metadata, which it used for this report. In particular, documents landlords generated on the website in the first and second quarters of 2021 and 2022 were compared. Additional information was obtained through a survey of 301 landlords.
Legal Templates cannot answer questions like whether the documents were served because they only have information on how many of a particular document were purchased over a given time period. Also, no attempt was made to control the growing awareness of the website. Asked if Legal Templates had any information on the type of person who would use their service and what percentage of the population they represented, Weirman replied, “We can’t make any assumptions without running a survey like this and having the actual data to compare.” They also have no information on demographics.
As with most state-by-state economic analyses, this one only deals with data as-is and makes no attempt to account for differences in legislation. For example, Freer notes that “strict fair housing laws” caused fewer rent increase notices to be issued in California than in otherwise comparable states.
Freer referred to the first type of document considered as the increase in the cost of living. The number of rent increase notices issued by landlords went up 84% nationwide. Among these notices, the average rent increase was 14%. The states with the greatest increase in rent increase notices presumably issued were Hawaii, where it was 875%, and Arkansas, which saw a 625% increase. With the number of notices rising 119%, North Carolina was among twelve states with an increase in the triple digits, but in Asheville, the number of rent increase notices only rose 57.5%. Five states checked in with a decrease in rent notices. In Wyoming, the purchase of rent increase documents was down 75%.
Legal Templates found that 82% of landlords surveyed had increased rent this year. They cited reasons including keeping up with the market, paying their bills, improving the rental properties, capitalizing on employees from new businesses, and “I felt like it.” A related survey result indicated 55% of landlords were earning more money this year, whereas just 8% reported earning less. According to the survey, 87% of landlords were “satisfied with the financial benefits of the job.”
The second document considered in the report was late rent notices. These are courtesy reminders issued by landlords, typically when a tenant has missed rent only once. If they fail to pay rent for more than a month, landlords are usually justified in sending notices to pay or quit, or even outright eviction notices.
The volume of late rent notices purchased was obviously impacted by the pandemic, when stay-home orders cut off sources of income for many tenants; and then again when the rent moratoria went into effect, were challenged in court, and then retired. The extent to which late rent notices decrease, then, could be an indicator of economic recovery as rent payors return to the workforce.
In 2022, the number of late rent notices increased 95%; 59% of these notices, incidentally, included a late fee. States with the greatest increases in notices were Rhode Island (692%), Montana (575%), and Delaware (543%). This is somewhat surprising because Delaware was among the states with the fewest increases in rent, and Montana, as mentioned above, was among those where the number of rent increases actually decreased. States with decreases in late rent notices were Illinois (-41%), Texas (-46%), and Alaska (93%). North Carolina fell in the midrange with a 100% increase.
In the Legal Templates survey, 88% of landlords responding said they had had at least one tenant who was late with rent in the past year. Between 38% and 45% of respondents reported having tenant problems in the following categories: refusing to pay rent; causing property damage intentionally; refusing to move out; asking for more time to pay rent; arguing about rent price; complaining about rent; or violating a lease or rental agreement.
The third document included in the study was eviction notices. For landlords using Legal Templates, purchases of eviction notices were up 36% year over year. The reason accounting for 61% of the evictions was a tenant failing to pay rent. Other reasons included the landlord deciding to terminate a month-to-month lease, a tenant violating terms of the lease, and tenants squatting after the termination of the lease. In Vermont, where there was no data posted on late rent notices (because the calcuations required division by the 2021 figures which were zero for that state), the purchase of eviction notices was up 447%.
The next closest states were Georgia (163%) and New Mexico (162%). Most states, including North Carolina (26%), were in the double digits; in Asheville, specifically, eviction notice purchases were up 64.7%. States seeing a decrease in eviction notices were Texas (-16%), South Dakota (-23%), Alaska (-29%), and Michigan (-38%).
Since the rental scene has been far from normal during the pandemic years, Weirman was asked for some sense of how numbers have changed since the last more-or-less normal year. For some perspective, she replied, “From 2019 to 2022, North Carolina has seen a 214.4% increase in eviction notices.”
According to the survey, 74% of landlords who had evicted somebody said the process was difficult. The average eviction process lasted 19 days. Freer says this is because landlords must do a lot of legal research to be sure they are within their rights. In some cases, issuing an eviction notice can lead to legal challenges. “Evictions require a deep understanding of state and federal laws,” she wrote. “Yet for many landlords, evictions are a necessary evil if they want to cover their property’s mortgage payments, property taxes, and maintenance costs.”