Have Run Into A Snag...
I recently took a tenant to court (in Maine) for an eviction proceeding....
Court refused to allow me to present the case and allowed dismissal petitioned for by defendant because the property is held in a third party entity; my presenting our case, even though I am a principal, would, according to a variety of precedents, be tantamount to my practicing law without a license.
That leaves using an atty for every official transaction (including the delivery of 7 and 30 day notices) .... a large expense...
Anyone run into this? Advice?
Thanks/Mark
I'm a little unclear about the whole third party entity thing, but it seems to me that you should be able to act on your own behalf. If you hold title in a separate corporation, LLC, you should be able to as an officer of that entity represent that entity in court. If you have title to the property in a Land Trust, The designated trustee should be the one handling the eviction for you. A power of attorney should make a difference if you have one. I'm just guessing. Maybe DaveT or one of the others with more experience can weigh in here.
Wow! That is flabbergasting!
That is not the case in NC. YOu can look at the small claims docket, and there is one business after another listed as plaintiff. They don't have their attorney's with them either.
Have you talked with any other investors in your area to see if they have a solution. That might be a great topic at your next real estate investors club!
Thanks for the responses....everything that has been said has certainly run through our minds!
Imagine how deer-in-the-headlights WE were when counsel for our tenant brought this up!
The property is held in a trust, the trustee was representing the trust at the hearing...the facts of the case were never allowed to be heard.
We even tried to dissolve the trust on the spot, and/or make the trustee the sole beneficiary, as two of the three beneficiaries were there in court....nope--title is held in the name of the trust, therefore only an atty could speak.
The defense atty (public service type) cited multiple precedents.
We've had an atty review the situation since, and he concurs completely with the defense's claim that we can't represent trust (nor can the property managers create 7/30 day notices) without being in violation of practicing law without a license.
Changes the ballgame DRAMATICALLY!
Curious to know why you set up a trust. Was it at suggestion of your atty or CPA? or was it based on advice from web sites, gurus, books, etc.
PositiveDestiny,
It has been a while since we talked, but here is my take.
As we know the state statutes in any state is the law. We are told that we need a corporate entity to protect us from law suits.
However, we find that in many states that only an attorney can represent a corporate entity, so do we want the protection and pay an attorney when we need to evict someone or do we not want the protection that the entity offers us. Darned if you do and darned if you don't.
Your state must have a statute that says attorneys must represent a trust, not uncommon I am sure.
I have often said "I am not fond of attorneys but not crazy enough not to use one."
So in your case whether you had a corporate entity or tust you would still require an attorney for eviction it looks like to me. You will have to way the problems you may encounter without using an entity or trust.
John $Cash$ Locke
Dick: the why's of setting up a trust or an LLC is a lengthy, ongoing disucssion among investors and advisors (and 'gurus')...but , in the end, ours was a personal decision to create a trust after consulting with our attys, for anonymity, some (questionable) protection for the beneficiaries, changing the RE interest to personal interest, flexibility of asset management, taxation issues and to keep the mortgage from reflecting on beneficiaries' credit reports.
John: GREAT to get to hear from you again, even if only on the boards--it HAS been a long time since we've talked--Mayhaps I should take up fishing in NV? Thanks for your input...you are, as ever, level-headed in your response!
We SHOULD have (and are) approached the court with an atty, but had hoped that for this most routine of petitions that it wouldn't be necessary (lesson learned!) The situation is so cut and dried that it seemed possible to save a few bucks by representing our own interests....instead, we'll have to start the eviction process all over (ps, at least we're still receiving our rent...this tenant is Sec8.)
This is only the second eviction that has required court action, and we were caught unaware of the prohibition against representing ourselves...I wanted to share with others contemplating similar 'entity' structuring; I don't mind so much HAVING to use an atty--I just hated to be unaware of the requirement going into it.
I was just caught off guard learning this lesson and wanted to (1) share my experience with others on the board and (2) see if anyone knew of any alternatives to this scenario.
(finally, just for info to the board, the precedents brought by the defendant's atty in the petition to dismiss cited cases in ME, WIS, NEB, CA and Ohio)
Again, my thanks to all who have contributed.....
Mark
I'm not an attorney (don't even play one on TV).
I also have properties within a Trust(s). I have a beneficary interest in the trust and use a third party trustee. The trust gives me the power to act as leasing agent to: lease,collect rent, manage, and evict.. I sign the lease document as leasing agent for the trust. As agent on the lease document, I have not had any court problem. In the future, I plan to set up a management company which will have these same powers. It is not good to make the trustee the lessor for reasons which are tangental to this discussion. I have evicted in the past without problems and I'm in the process of (unfortunately) evicting again. I think it all depends on how the trust us setup and what powers the trust delegates to the trustee and tthe beneficiaries.. Sounds like you have a land trust (just like me), but you need to have a good attorney amend your trust with the concurrance of all the beneficiaries.
Thanks, Sammy...
Yes, it does sound like we're set up about the same, and our trust DOES specify trustee's powers to act in behalf of...
..the court refused to even LOOK at the trust doc; the decision was based solely on the precedents provided by the (public) defense...
Our tenant's lawyer knew enough to dig up this argument to get this case dismissed..it sounds like yours may not have--much to your good fortune. Might be something to keep in mind in the future, especially if you hear that your tenant has retained counsel? We have been to court before and won, using the trustee to represent, but the defendants in those cases didn't have an atty....this atty thwarted trustee representation this time (and, I suppose for all future pleadings before this bar.)
Mark
PositiveDestiny,
Here is a quote from Moses Apsan, Esq., Assisting the Pro Se Litigant: Unauthorized Practice of Law or the Fulfillment of a Public Need, 3 NYLRev XXVIII (1983).“Pro se' representation (representing yourself) is firmly embedded in American jurisprudence yet, for a lay person, this conceptual right is but a meaningless truism without the corresponding abilities to see through a legal maze and use the complicated procedural mechanisms necessary to vindicate that right. “ Many legal proceedings do not require the assistance of anyone, not even a lawyer. The right of self-representation is universally accepted and has been protected by law since the creation of the American government. The Judiciary Act of 1789, enacted by the first Congress and signed by President Washington the day before the sixth amendment specifically provided that “in all the courts of United States, the parties may plead and manage their own causes personally.…” The United States Courts of Appeals have repeatedly held that the right of self-representation is protected by the Bill of Rights. Similarly, the individual states, with few exceptions, accord an individual the right of self-representation, explicitly conferring that right in their state constitutions and corresponding statutes.
The problem you encountered was that you were not representing yourself, but instead you were representing your third party entity. Yes, you were, in effect, practicing law without a license.
I am not an attorney. Perhaps, if you post your dilemma on the legal forum, one of the lawyers that frequent that forum will give you a more specific response.
In the meantime, it may be best to take Moses Apsan's warning to heart and retain someone with the ability "to see through a legal maze and use the complicated procedural mechanisms" on your behalf.[ Edited by DaveT on Date 10/02/2003 ]
DaveT,
That was beautiful! I know I'm off topic here, but that was truly inspiring to me. You're my hero!
Thanks,
Jeff
Dave:
Thanks....I have continued to process with an atty, as required....but I DO want to thank you for a genuinely patriotic response.
Doesn't change my need for an atty in my particular circumstance, but it DID, somehow, make me feel much better!
BEST Regards,
Mark