Dealing with a witheld check from a tenant

7 Replies

Though we have owned a number of properties for a few years, we only recently came across the issue of a tenant having a check deliberately cancelled on us on their way out of the home. In this particular instance the tenant took a lovely open-plan 3 bedroom house and secretly walled off the formal living area to create an extra bedroom for his kids. We could have evicted them when we found out, but rather than make waives, especially with a bunch of young kids involved, we just let them see out their lease before informing them that it wouldn't be renewed and gave them the appropriate 30 days notice. Typically, they now see themselves as the aggrieved party - 'what's the big deal' was the response we received regarding the modifications!

As part of all this behaviour, our bank called us a few days ago and told us that the tenant has cancelled their last rental check to us, which has resulted in our issuing a 3 day pay or leave notice to initiate the legal processes.

In the likely event that we're not paid we're not quite sure how to approach the matter, because we're now left with the option of pursuing the tenant on multiple counts. My wife asserts that we can issue a notice claiming that the tenant make good on the check otherwise he'll be up for a penalty three times the amount if the ruling is made in our favor. Then of course we can simply take the more normal route of pursuing a ruling in our favour for lost rent, repairs, cleaning costs, etc - we've been down that route successfully before. 

Lastly, we're not quite sure how their deposit sits on this as things are a little confusing - I assume the non-payment via the cancelled check means they've breached the lease agreement and it's now forfeit, not subject to some claim on their part that they left it in lieu of the rent, right? Or does pursuing them on the count of the check complicate the process? We've had one other tenant skip out owing rent, but in her case it was much more clear-cut as she abandoned the property well before her lease was up - as well as abandoning her pets. The dog we re-homed - the turtle I gave to my daughter!

You're over complicating it.  You'll be owed the last month's rent , plus costs for removing them ally and any others damages.....period.  Assuming this totals more than their deposit, they will owe the rest.  Canceled checks verses no checks doesn't matter.  Your wife is confusing the Tenant being able to collect triple damages, if you do things can't collect triple.

If they gave possession of the property back you can claim the deposit for the last payment. You can also claim any damages done. Usually if you file a 3 Day and they give possession you immediately hand it over to a collections company so they can't hurt the next landlord. ALWAYS take pictures for proof.

Personally, I would have charged them for remodeling the home with no written permission (the cost to put the home back to original condition). What happens if the changes they made fall apart and hurt a future tenant? Guess who is liable...

Yeah, I know Nicholas, but we try not to be hard-arse's even though we should. I do all the rehab work on our houses so I know it won't take much to reverse - it's more the insult of doing it and being so disingenuous about it all, specifically as we gave them a bit of a break going in. Pictures I always take - the three days are up today and I'm going over there with my camera in a few hours. 

Not that we like to , but if people end up being SOB's on their way out and leave owing money we have no problem chasing them down in court, even if we know we won't get any money out of it - we see it as a moral obligation to make sure others are protected down the track by setting up the appropriate red flags on their financial record.

@Wayne. We're not trying to collect triple - I think we probably won't see a penny other than the deposit. My wife looked up the law regarding bouncing checks so the wording on triple penalties applied there. 

I guess we're left wondering which will look worse on their financial record as a red flag - bouncing checks or being delinquent renters. We'll go for the 'better' one, if you know what I mean.

@Tim Wilderbeeste

 You should be able to keep the deposit as they did not fill their financial obligation. I would definitely go after them, if not in court, at least send to a collections company so it hits their credit and shows up as they have a housing debt.

between potentially losing this rent, and the (retail) cost to reverse the changes it looks like you're going to be over the security deposit anyway. Time to get them out asap and see after the fallout if it's worth a court case or not. Need to get them out to stop the bleeding though immediately.

you don't just get to keep their security deposit because the tenant broke a section if the lease. Your lease should describe the process for security deposit return and when tenants move out you must send them an accounting of the costs and amounts withheld. Lastly, your lease should also layout the cost of the fee for a bounced check or in your case law fees for non payment.... 

@Kyle. Statutes are different from state to state, and we use a fairly stock lease agreement for Florida. There are numerous clauses specified, and which they signed off on, regarding certain breeches that result in the loss of the deposit. 

Aside from the bounced check, they left with damage to the property, didn't clean, no evidence as requested that they maintained pest control, all of which will cost well in excess of their deposit to rectify. Statutes here state that you can issue a 30 day claim that the check itself be honoured, otherwise the individual can be taken to to court, just as they can be taken to court for loss of rent and damages. 

We aren't hard arses about it, quite the reverse actually. We've let people break leases after changing their minds, and I don't think we've ever had a single tenant who's really cleaned premises well enough on their way out that we didn't need to reach into our own pockets to get a place spruced up for a new arrival. We have a tenant who occasionally falls behind by a few weeks because of ongoing medical issues with her son, but we know she's good for it and eventually catches up. We also have another tenant who got abandoned by her husband soon after moving in and ended up falling three months behind in rent, but rather than evict a family that included an elderly and sickly old woman we rode it out, she got help from friends and church, and we set up a program for her to pay her rent in weekly installments, rather than monthly, until she eventually caught up her rent after two years - she's now been with us for 6 years.

@Alexander. As far as going over the sum of the deposit, sure. We've only had one other really bad tenant, and in that case we did the same of taking the individual to court, as mentioned earlier to Nicholas, even though we knew we wouldn't see a cent, just to protect others down the track.

As per Florida law, we issued them with a 3 day pay-or-leave notice last week that expired on Friday, and as best as we can ascertain they have left, bar some items of furniture left behind and a set of keys left on the kitchen counter. We have asked for confirmation on the point from the tenant, but have heard nothing in return, and in essence our hands are now tied for the next 14 days because I can't throw out the stuff or start changing locks until then. Doubly annoying is that they had the electricity turned off, so we'll have to get it put back on at our own expense come Monday to keep the AC and pool pump going, even though we can't officially take the house back until the 25th. Kind of ironic that the law protect the rights of the tenant in such a situation, yet they can now come and go as they please to use a pool being maintained at our expense for the electricity to keep things running.

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