I have a tenant who is vacating by October 1 they are VERY behind on rent. I know I will get lot of the "should have acted sooner" advice but Iwas kind of hoping to hold onto this tenant.
Anyway. All rent was paid on time till June 1 then it looks like this...
|6/1/2014||Water - Due June 1||60.01|
|6/5/2014||Late Fee - June Rent||50|
|Water - Due July 1||63.73|
|7/5/2014||Late Fee - July Rent||50|
|Water - Due August 1||54.82|
|7/5/2014||Late fee – July||50|
|Water used in July - Due Sept 1||83.99|
|Water used in August - Estimated||62.98|
|9/5/2014||Late Payment Fee September||50|
|Current Balance Owed||1225.53|
As you can see the tenant has done well stringing me along then paying enough to make me feel like I'll eventually get all my money from them.
in addition to the amount show above I will need to add water charges in the approximate amount of $65 once the utility co bills them.
I also have a $700 security deposit which I plan to charge $100 for a 3am service call when they flooded the unit, then apply the remaining deposit to what they owe (assuming there is no damage to the unit).
So after retaining the sec. deposit they will owe me $690.53 +/-
Should I go to the magistrate today? Would you wait until the weekend when they will allegedly have some $$ for me?
Sorry... this is the payment history it looked like a table in my preview.
find out what happened and whether their payment plan will work for you and if it will not then ask them to leave. If they don't leave, evict them.
The husband lost his job. He was able to replace some income with temp jobs and last weekend he told me he has found a FT permanent job.
Additionally, they had paid me cash but due to the recent financial struggles they have been able to qualify for and now get section 8.
They are leaving on their own. Lease end date was Sept. 30 and I choose not to accept section 8 for the apt. they are in.
today I will be mailing them a "friendly" statement of account with address service requested so hopefully I will be able to gather their new address.
If you sue them and you get a judgement, will you be able to collect anything?
How much will it cost to sue them?
Is this what you want to spend your life doing?
Have you improved your tenant screening process?
Sometimes bad stuff happens to tenants. It's part of the deal. It doesn't sound like they were intentionally trying to cheat you. I would do what I could to get a payment plan, but not devote too much psychic energy to $690 bucks.
I am not a big fan of 'teaching people a lesson.' Avoid the next problem, don't fight the last one.
I'm not sure if I'll be able to collect on a judgment. I do have their SSN number and DL #. Do I need to get the judgment before I can process them thru a service like rent recovery services?
It will cost about $150 plus my time to file and appear.
I don't think I made a mistake in my screening processes... until June 1 (when he lost his job) they paid on time with no issues. They have always kept the unit clean.
This is my first time dealing with non-payment and I'd like to balance what I'm able to recoup with what it cost to collect with out feeling like I allowed myself to be taken advantage of.
If they don't have money... They don't have money...
If they have always tried to the right thing and pay you, but then fell victims to economic times after June 1st what is there to gain? It sucks being out the money, but sometimes it's the cost of doing business. These people are probably hurting and pursuing a judgement will only cost you money, because they don't have money to pay anyway. I'm sure there is more to the story. If the place is clean and not destroyed let them go and get it rented again.
Sometimes bad things happen to good people, that's just part of life. However, since your total charges will be mitigated to under $700 after you apply the security deposit, you will spend more going to court chasing a small amount of money. I believe the better course of action is to simply set up a payment plan with 0% for 12 months and have them pay you the remaining balance over time. It's not a perfect plan as they will probably fall behind but every dollar that comes in will reduce your balance. Although you can get a judgment in court for $700, it doesn't seem like the road to travel if there are other ways. You can either mail them monthly statements or give them a coupon book; I've done both and the coupon book works best for me.
Forget the don't sue advice. If the are honorable people they shouldn't expect you to subsidize their bumpy period. You don't have to sue right away but with a job and section 8 they should have the funds coming in to pay you. If they make no effort you sue before the statute of limitations kicks in. Just because they don't have the money now doesn't mean they won't have it later, and before they buy the new big screen tv they should pay you.
I don't know how long judgments are good for in your state but in California where I got most of mine they were good for 10 years and they were renewable. I could keep them going forever. But unless they are total trash times will get better for them which means assets. One of mine was a trash couple but I wanted it on record to warn other landlords and even that one got paid when they got an inheritance.
This is not a plug, I don't work for this company or get any kick backs or anything, but from what I understand NTN (National Tenant Network) offers a flat fee collection service for $38. They sent 5 letters saying what is owed. If its not paid, they put the amount of the collection on the persons credit report with all 3 agencies. If they ever need to buy a car or find a new rental they may then find you to pay it off. If they do pay, the payment goes 100% directly to you. Your only cost is the $38. You don't need to have a court judgment first. I haven't used it yet but plan to with a tenant who owes me money.
Have you, or anyone you know, used this program through NTN? That's very interesting.
I would attempt to setup the payment plan and see what happens. If they haven't done anything towards their balance in a couple of months then I would go get the judgement.
I have not and don't know of anyone yet who has used the service. It's actually through another provider that only works with landlords who have at least 100 units, but you can get it through NTN.
A payment plan may work in certain situations. The tenant we plan to use the NTN flat fee collection on was admitting to violating lease terms (smoking and having a cat) which ended up causing damage, smoke and cat smell, burns on the floor where she sat smoking by the scree door, burns on the countertop in the master bath. She was always very argumentative and felt she wasn't smoking in the house since she was sitting by a screen door, that the cat should be added to the lease even though we had been crystal clear about no cats...I doubt I will get anywhere with her in trying to work out a payment plan but I will keep that in mind.
I met the wife at the apartment Monday night so they could pick up their fridge and stove I'd been storing. She gave me $100 and promises to pay more October 17th.
Assuming there are no damages that brings their past due to about $590 after I retain the sec. deposit.
They do still have stuff in the apt. and are holding over for about a week. Does anyone have and policies on hold over?
I don't currently have one but I think I'd like to add something to my lease. we did want to leave this unit out of service until Nov. 1 anyway to paint and spruce up as it's been fully occupied for 2 years, but if we had not planed on a "service month" we'd be loosing money this month.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing