Tenant Damage, Small Claims, Serving, & Collecting

16 Replies

Hi all! Looking for some help from experienced landlords.  We had tenants move out at the end of June and we were stuck with a huge damage bill.  The total amount of damage is close to $18k, which far exceeds their security deposit.

We sent an Invoice and broke down all the damages by line item and even gave them receipts for what we had and also estimates for the major items like damages to carpet (brand new and installed just prior to their tenancy) and major gouges and deep scratches in all major rooms (we have pictures of everything). 

We initially were shocked and actually felt bad.  We tried to charge them the lowest amount by not adding labor or materials for certain repairs for example to repair poor cover-up job for holes they made in walls, we just charged partial contractor labor and not materials. Same for replacement of broken or missing parts like broken banisters, broken microwave handle, broken window screens, dog faces left in yard,trash, clean out of cabinets and kitchen, etc. We either charged just for materials or labor but not both.).

We sent them the itemized invoice and demanded they pay another $1500 above their security deposit which was only equivalent to one month's rent (we should have charged 2x rent).  Long story short, they came back and disputed and made their own calculations, ultimately showing we owe them some of the deposit back.  

They asked for more evidence, receipts, pictures and more pictures, explanations on our cost calculations, etc.  After about 1 month going back and forth, they asked for an extension to pay because they had questions.  I extended it to end of Aug but of course when the deadline came, they stopped communicating and has since moved from their interim address onto their next rental, which happens to be on the Airforce Base close to us.  We don't have their new address but do have the one address they just stayed at for one month while they were supposedly waiting for their new rental and we also have the forwarding address they first gave for their parents home (their parents also resided in our rental with them and are being named in our claim as well).

The total damages are high and it's a big house (almost 4k sqft & in excellent condition before the moved in).

So long story, we need help on what to do about serving them with claims papers if they now live on base and we don't have their new address? Do we serve all 4 adults at their parent's house, the address they provided? Do we try to go to their last known apartment or send certified mail there to see if it gets forwarded? Do we send certified mail to our rental to see if it would get forward since I'm thinking this would have their forwarding address.

It appears they are purposely trying to hide and run from their responsibilities and they probably know we can't just go walking on base to look fo them.

So I want to file a small claims even though the max is $10k, lower total damages but still a ton of money we are out even if we do get a judgement.  I can't believe we were trying to be so nice and bend backwards for them and pretty much almost settled for "nothing". We asked for approx $1500 and they disputed so since we have to goto court, we decided to fully list all costs of damages.  So frustrating and time consuming and painful to have to go through the damage.  We also couldn't quickly turn the rental because we had to wait for repairs so we were also out a full month of rent since we had to cover that ourselves (and not included in the total $18k)

It it were less, I would write it off as part of doing business as a landlord but $18k.  Any help or advice here?

@Silvie T. Probably go to small claims court. You’ll never get that money though most likely. What did they do exactly? A 4K house is a large house for a rental

It's not a matter of getting the money in these situations. It's a matter of getting a judgement which will hinder future tenancy. Also a judgement allows you to garnish wages and bank accounts. That's why you always collect information about where they work, bank, get credit reports, etc, so you have something to pursue.

Thank you, Ray Harrell.  Yes. we just want to at least be able to get a judgement.  This is not just a few hundred dollars we are talking about and they decided to just try to evade or hide and purposely lead us to extending the response time from them.  

Now our problem is finding them since they did not provide an updated forwarding address and since they are military and supposedly moved onto the base (one of them works there), they may think it will be hard for us to find them and have them served. We don't have an address, just know they are there (he is active military) and we have the other set of tenant's forwarding address (their parents). We thought renting to military would be less of a headache.  This set of tenants completely shocked us (trying to hide things they broke, then actually going as far as stating they left the home in better condition than when they moved in, the father had a verbal confrontation with a female neighbor, they were not paying for trash for over a year and were stuffing the neighbor's bins with their own trash, leaving piles on side yard behind gate, etc.). They seemed "normal" when we decided to rent to them.

Has anyone had any experience going through small claims or any problems getting the papers served?

I think the process if you can't find them is put an ad in the local paper and send a certified letter to the last known address. Then proceed with the court date.

What would the ad say? TIA? Last known address would be our home they rented.  I'm pretty certain they did not forward any mail to the apartment they rented for one month while they were waiting to move on to the airforce base after vacating our house.

For something like this, I would go to a local collections attorney. This is probably too big for small claims under your states law. Collection attorneys work on a contingent percentage of recovery plus expenses and they have the processes and knowledge to get them served properly. The good news is you have 4 defendants and at least some of them have jobs and banj accounts.

@Silvie T. A few thoughts based on your post, in no particular order:

- If the true amount of the damages and what they owed you was $18k, you should never have billed them for $1,500.  That's a huge difference.  Why "be nice" to someone who wrecked your house?  In the future, just be honest and factual and bill them for what the damages actually are.  The problem I foresee for you now is, if/when you take this to court, the judge is going to be presented with two very different and conflicting pieces of evidence (an invoice for $1,500 from you and a lawsuit for $18k from you for the same property/damages) and you're going to have to explain the discrepancy. 

- If you decide to sue all 4 adults, you need to serve all 4 adults.  If you don't know their new home address, there are alternate ways to serve them.  Here's more info on that: California Courts: Small Claims - Serve Your Claim.  For example, hopefully you collected detailed information on them when they originally applied and you know where they work....well, serve them at work.  (Note: I took a tenant to small claims court before and she also moved out and wouldn't tell me where she moved to and that's how I served her....at work. Here's my post on that saga: https://www.biggerpockets.com/forums/52/topics/252435-taking-a-tenant-to-small-claims-court-part-1.)

- Lastly, if you decide not to go through with a lawsuit, you should at least report the debt to a collection service so it shows up on the tenants' credit report.  You don't even need a judgment to do it.  Plus, it'll warn other landlords about them being bad tenants, and - who knows - maybe some day they'll need/want to pay you off to get it off their credit report.  Here's a couple companies you can use to do this: Rent Recovery Service or AOA Debt Reporting Service.

Good luck and hope it works out for you.

@Kyle J. Well the original invoice of itemized damages came to a total of about $5000 (still a lot less than the total damages of $18k) but again, we were clearly being too nice.  The approx $1500 was above their security deposit which was approx $3500.  We never thought we would have to deal with this on this rental (but we haven't been doing this very long).

We did not think the floors would need to be replaced.  We originally thought we could have the wood floors just refinished but the gouges/carvings/deep scratches were extensive and so deep that there is no way around it but to remove the floor and replace.  Our original floors cost us $40k to install (we have the invoice) and we expected them to last 50 yrs, if not longer.  Normal wear and tear is expected.  We did not expect these carvings or deep scratches that looked like they just dragged things across the floors and didn't even care to use any caution.  Even at $18k, that would not replace our floors but again, we are extra cautious and trying to do what's right and fair.  We took the depreciated value based on how long they have been in the house (only 2 years) and how much life they took out of the life of the flooring.   

Even after hearing about all the "nightmare tenants", we never thought we would ever come even close and they being military, this being a higher-end rental home, we thought it would be a "safer" bet but apparently we are learning the hard way).  Even at $18k, small claims only allows claims up to $10k max so we are still at a huge loss but we figure at this point, getting some is better than nothing.  This hit us hard but we do not want to have to deal with legal fees and more time if we had to file a larger amount, higher a lawyer, file with a different court vs Small Claims.

So part of the reason why the difference is so large is because 1) we were hoping we could have a contractor come and just sand, fill, and refinish the areas that were damaged but due to the floors being engineered wood and also having a certain character to them, we can't have them sanded or you would be able to see exactly the areas that were sanded.  It would remove the different texture and character that was part of the design.  Plus being engineered wood, they can't sand down too far.  $1-$2k was what we expected to get it to look good again but unfortunately it can't be done and we learned that after we sent the invoice.  We wanted to make sure we followed the timing guidelines to get the itemized invoice to the tenant.  We read the civil code over and over to make sure were doing everything to the T and didn't want to risk making a mistake like sending it back late and not be allowed to charge them anything for damages.  We never even thought we would have to replace the floors (there are multiple spots with deep gouges and what looks like carvings down into the exposed unstained wood underneath the top layer.  I've attached just one picture of the damage to the wood floors.  There are so many pictures with areas of damage.  Some are deep carvings and some are both deep and long and cover many boards that run across the room.

We checked with 2 other contractors since we sent the invoice and all said the floor boards would have to be replaced.  Our original invoice only gave an estimate of what we thought could be done to save the floors.  We do not have any of the same boards left and the manufacturer has discontinued the line so we can't just pull out the affected boards (besides, there would be no way we would have that many extra pieces; the total number of boards damaged is in excess of 150).

The second reason why there is a difference in charges is because if we need to go through with Small Claims, we put ALL costs in there vs our original lower estimate (**after talking to a legal advisor, they said we should go with the full cost as long as we had estimates, invoices, etc to show how we came up with the dollar amount).  We were trying to be "reasonable" but again, we are novices and really were just trying to be extra cautious, we were in shock, we were worried about timing since not only did we need contractors to come quote, we needed the time to get all other repairs done so the house could be ready to rent out again.  On our invoice, we only charged for one or the either, either materials or labor and not both for many items.  Again, it's our first time having to go through this. We did not want to be that landlord that seems to want to hold entire deposits for minor wear and tear so we checked, double/triple checked our calculations for what we did send over but the floors were really something we had to swallow after realizing we can't just do a quick sand and refinish.  

The biggest change was in the cost of the flooring.  The carpets were brand new and installed just before they moved in.  They come with a 25 year life expectancy for stains but we estimated costs on depreciation and only for 10 years.  Again, we wanted to be reasonable and fair and not seem like we were just trying to "stick it to 'em" just because we were the landlord and they were the tenant.  All rooms have permanent stains from urine and other things in multiple spots that a professional cleaning service could not remove.  The wood floors are wrecked.  

One of the renters is in the military and works on the base.  He and his wife now moved onto base but they did not give us their new address and this seems to be the difficult part for us.  The military base does not, for obvious reasons, allow anyone to just come on base or ask questions about those who work and reside there.  So I think they know this and have decided to just ignore our emails and request to pay the outstanding invoice (which they would be getting away with much less than the damages they have caused and put on us).  Their parents who were supposedly disabled and retired are no longer living with them and have moved into their own home.  That is the forwarding address they gave when they wanted their deposit back.  So what we do have is their driver's licenses and SSNs for all 4, one employer (military base), cell numbers for 3 of the tenants as well as a number to a new business the step father started (I saw the number on his car; no actual location or address exists for this new business that they likely operate from their mobile).

Thank you for the suggestion on the collection service and for all your feedback.  We didn't know we could do this without a judgement.  We will definitely look into this and learn as much as we can about our options.  We've been trying to read up on everything and are hopefully we will have more rentals in the near future but this being our first and largest, the expenses are always going to be more.  Again, we just thought by having a higher-end rental and renting to a military family that we would have lower risk.  Apparently we had a rude awakening.  

@Silvie T. Since you mention the tenants were military, you might want to check out this post for some ideas: https://www.biggerpockets.com/forums/52/topics/593030-publicly-shaming-an-evicted-former-tenant-do-it-or-not (not the public shaming part but there were plenty of ideas from posters about how to deal with military tenants who left damages and owing money somewhat similar to your situation)

@Bob b The home is almost 4k sqft and most of it is wood.  We put those floors in before we knew we would turn it into a rental.  We thought it would be our family home for a long time but of course life changes.

@Kyle j TY SO MUCH for sharing the "public shaming" post.  I read every single post and reply there. It was helpful.  I don't ever agree with public shaming, regardless of the person or situation, young or old.  It's an unfortunate thing that some people in the world think that is a normal and accepted course of action, due to social media.  Humiliating someone is never ok and not a way to "teach" people.  I believe in karma and that kindness always wins...i know it is difficult sometimes because we get so wound up and upset due to stressful situations like this, even in my case, even when I thought by being overly cautious and nice would help the tenants take ownership and hold themselves accountable for what they did.  I thought by showing them that we clearly were not trying to gouge them that they would be decent humans and just own it.  I showed all the costs for damages for things we had to replace or repair and did not even pass on to them.  I thought they would see how we were trying to work it out with them, a little give and take, some damages we swallowed and chalked up as just the cost of being in this business.  We thought showing them that and seeing how much we had "forgiven" & the little bit we were asking would help them see they are in the wrong.  Turns out they don't care.  They just want to walk away and even had the audacity to send back their own calculations of what they stated was "fair" and showing WE ACTUALLY OWE THEM!!! 

Every email reply from them always came set up perfectly with a "kind" greeting and a closing of "respectfully..." but everything in the middle was them trying the dispute or discredit our invoice and calculations.

So I had given them 30 days from the date of our invoice to pay.  They missed that and asked for an extension sonI gave them another 10 days.  They continued to dispute the charges then up to the new deadline then stopped responding.  However, after I posted here for advice, out of the blue, they send another email (maybe they were also doing their research and found this thread! Lol). They still dispute the small amount we originally invoiced and are now asking if they can send someone out to inspect the floors for a second opinion!  Do I even give them the time of day, to even reply at this point or just proceed with getting the judgement?  Can I just ignore them?  How long do I need to keep this back and forth up just so they can say they were trying to work it out but in fact it seems like they keep drawing it out and stringing this along? I don't trust their actions based on the lack of integrity they have already shown.

@Bob B.  The home is almost 4k sqft and most of it is wood. We put those floors in before we knew we would turn it into a rental. We thought it would be our family home for a long time but of course life changes.  Also, the monthly rent is over $3k, not $1500.  That was just the little bit over and above what their security deposit did not cover (which, we now know is way too low to even make a dent in the damages they caused us).  :(

@Kyle J. TY SO MUCH for sharing the "public shaming" post. I read every single post and reply there. It was helpful. I don't ever agree with public shaming, regardless of the person or situation, young or old. It's an unfortunate thing that some people in the world think that is a normal and accepted course of action, due to social media. Humiliating someone is never ok and not a way to "teach" people. I believe in karma and that kindness always wins...i know it is difficult sometimes because we get so wound up and upset due to stressful situations like this, even in my case, even when I thought by being overly cautious and nice would help the tenants take ownership and hold themselves accountable for what they did. I thought by showing them that we clearly were not trying to gouge them that they would be decent humans and just own it. I showed all the costs for damages for things we had to replace or repair and did not even pass on to them. I thought they would see how we were trying to work it out with them, a little give and take, some damages we swallowed and chalked up as just the cost of being in this business. We thought showing them that and seeing how much we had "forgiven" & the little bit we were asking would help them see they are in the wrong. Turns out they don't care. They just want to walk away and even had the audacity to send back their own calculations of what they stated was "fair" and showing WE ACTUALLY OWE THEM!!!

Every email reply from them always came set up perfectly with a "kind" greeting and a closing of "respectfully..." but everything in the middle was them trying the dispute or discredit our invoice and calculations.

So I had given them 30 days from the date of our invoice to pay. They missed that and asked for an extension sonI gave them another 10 days. They continued to dispute the charges then up to the new deadline then stopped responding. However, after I posted here for advice, out of the blue, they send another email (maybe they were also doing their research and found this thread! Lol). They still dispute the small amount we originally invoiced and are now asking if they can send someone out to inspect the floors for a second opinion! Do I even give them the time of day, to even reply at this point or just proceed with getting the judgement? Can I just ignore them? How long do I need to keep this back and forth up just so they can say they were trying to work it out but in fact it seems like they keep drawing it out and stringing this along? I don't trust their actions based on the lack of integrity they have already shown.

@Silvie T. If you know the Military Organization the person is assigned to, you should be able to contact the Commander of the organization. All else fails, send it to ATTN: Base Commander, most military units are very conscientious about Military members paying their debts. Matter of fact, failure to pay debts can get you separated and out of the service fairly quickly, if it's an oft repeated situation.

Good Luck.  

@Jim Cummings Thank you so much for the info!  Would this work for Certified Letters or a method to serve papers if we do not have their base home address?  I am guessing this would satisfy the "Substituted Service" for serving the court papers if we had it served to the Base Commander?

Have you tried implying in a message to them something like "How would we get a check to you?" That might get them to respond and give you their new address. I would just be careful about how you word it so when you do take them to court it doesn't get used against you. 

Maybe something like "we'd like to communicate the itemized receipt of how your deposit funds have been used up to this point along with a check if any funds are still available"

Just an idea =)

@Shane H. TY for the suggestion.  Turns out they finally sent another email a few days ago but again disputing how much they owe, which again is MUCH MUCH less than we really should be charging them because the damage to the floors is so high for both the wood and carpets.  

For the carpets, they are saying they will pay for 3 out of 5 rooms, not all the rooms.  They asked for pictures and also asked us to allow them to have someone come to inspect the carpets again and requested they send someone for an additional cleaning.  No amount of cleaning will restore the void of color/bleach stains and the discoloration due to urine from their dog.

For the floors, we only estimated a small charge to try and sand and refinish the floors, which we have since found can not be done; the entire floor would need to be pulled out and replaced with new.  I just do not want this to keep going back and forth with them dragging this out since it is already almost 3 months after they moved out.  I have no idea how long they will be stationed at this base so who knows where they will be sent next.  They will likely not provide their forwarding address or let us know if/when they move again.

At this point, should I even let them know what we will file the claim for or just do it and they will see it when we find a way to get them served?  I've already tried to work with them and reason with them and I feel this is not getting me anywhere to be nice.  

If they are already disputing the small amount we originally invoiced and do not want to take responsibility for the damage, they will definitely not agree to the much larger claim we will put in if we have to go to court.  I already warned them of this when we sent the invoice and they disputed the charges to the flooring the first time.  Then they missed the payment deadline, asking again for me to explain and break down the charges and explain all my calculations to them again.  Which again, they disputed.  I did not even think we would have to rip out the floors at the time but I did tell them if they didn't pay, and if we take them to court it will be for a higher cost but of course they ignored that.  Do I really need to keep going back and forth or just draw the line already?  How many pictures do I need to send them?  Our lease states "stains of any size or amount do not constitute normal wear and tear".  The carpets and the floors exhibit clear permanent damage.  They think small stains are "wear and tear" and claim they didn't even use or live in one of the bedrooms...  At which point can I just stop responding to their emails?  Obviously this is costing us way more than we will recoup.