Should I sue for back rent?

OP

Member since 2019 · 55 posts · 55 votes

7y

Property Management told me I can not keep it because it can only be used for "damages". This is my first rodeo with bad tenants I'm looking for any type of feed back.

1 Reply

OP

Member since 2019 · 55 posts · 55 votes

7y

Originally posted by @Kyle J.:

Why do you say “obviously” you have to return the tenant’s security deposit because “it can only be used for damages”? Security deposits can be used towards unpaid rent, and that’s what you should be using this tenant’s security deposit for. Don’t let this professional tenant bully you into returning it if they legitimately owe you money for rent.

Property Management told me I can not keep it because it can only be used for "damages". This is my first rodeo with bad tenants I'm looking for any type of feed back

OP

Member since 2019 · 55 posts · 55 votes

7y

Originally posted by @Lien Vuong:

@Kyle J. In MA you cannot use SD funds towards unpaid rents. Given that this "professional tenant" knows how the system works, it is not worth going through the process and having the triple damages fine against you.

Frankly, @Sharon S., I know you're really upset with them but take this as an expensive lesson. This happened to me on my first property too and the tenant deterred me from buying more property in that timeframe because I was so discouraged with the landlord/tenant dynamic. Nonetheless, I preserved and continue the journey after some time and you will too. Move on with your life as they clearly have already. Sometimes it's a cost of doing business and you can write this off as vacancy in your taxes.

Thank you for your input Lien! Like I said its not the lost money, its the principle. & I'm sure you know in MA it is an expensive lesson! lol. I think the biggest lesson I learned here is always hire Property Management.

Source: https://www.mass.gov/info-details/find-out-what-landlords-can-use-security-deposits-for

Kyle J.

Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes

7y

Originally posted by @Lien Vuong:

@Kyle J. In MA you cannot use SD funds towards unpaid rents. Given that this "professional tenant" knows how the system works, it is not worth going through the process and having the triple damages fine against you.

Why do you say that? I've never heard of a state where you can't use a security deposit for unpaid rent, and that doesn't appear to be the case in Massachusetts either:

Quote:

Landlords in Massachusetts may be allowed to keep all or a portion of a tenant’s security deposit for the following reasons:

- Unpaid rent.
- Unpaid water bills.
- Any unpaid real estate taxes that the tenant was obligated to pay.
- Damage in excess of normal wear and tear.

Source: https://www.thebalancesmb.com/massachusetts-security-deposit-law-2125077

Here's another one:

Quote:

After a tenant moves out, the landlord may use all or part of the security deposit for the following reasons:

- Unpaid rent (unless validly withheld or deducted by the tenant) and, if applicable, water charges
- Unpaid increase in real estate taxes (only applicable if the lease contains a valid tax escalation clause)
- The cost of repair of damages caused by the tenant, other occupants, or their guests (does not include pre existing damage or routine painting, carpet shampooing, etc. that is performed because of normal “wear and tear.”)

And another:

Quote:

When you move out, your landlord can use your security deposit to pay for:

- Repairs for damage that are not "reasonable wear and tear."
- Unpaid rent, unless you legally withheld rent for bad conditions. See Chapter 8: Getting Repairs Made.
- Unpaid real estate tax increase, if your contract requires it.32 See Chapter 5: Rent.

Source: MassLegalHelp: Security Deposits and Last Month's Rent

Ultimately @Sharon Steenbergen, I would check with a local landlord-tenant attorney to be sure. But you don't want to miss out on money that is legal owed to you.

10 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

7y

Buy class A properties and you wont have to deal with class D tenants.

[email protected]301-893-4635 Podcast Guest on Show #192

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12 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

7y

Take them to small claims court, if you want to prove a point. Chances are they won't show up.

Account Closed

Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes

7y

I finally went through my first eviction, and knew up-front it was only going to cost me more to file, considering the chances of collecting after a judgement are slim to none (plus I still needed the court to get them physically out). However, I had not actually been through the process and for that reason, decided to learn how it works by going through it - I consider it a good value, as there is no better source for accurate information than first-hand. I learned many things I would not have found out, and avoided misleading and inaccurate 2nd-party info. Case in point, you are saying you can't use the security for rent, and the other poster from CA found three sources from your state that says you can!?!?!? See what I mean? You go through it once and will have the real story.

5 Reply

OP

Member since 2019 · 55 posts · 55 votes

7y

Thank you @Kyle J. for finding all that information! It is incredibly confusing for me, because I have Property Management telling me I can't keep it - and others in the area who are telling me the same thing. Then, seeing information online saying that I can!

I tried consulting with an attorney in the beginning to serve my Notice to Quit's and they wanted to charge me a $3500.00 retainer just for the notices and first court date. I will try to consult with another on this matter.

Ola Dantis

Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes

7y

@Sharon S. Personally, I don't think you should give this tenant back their deposit.

She left and didn't pay the September rent and now wants her deposit back?

Yes, going to court could be a waste of time; however, if you remind the tenant that she will be responsible for the court and attorney fees if you both go to court and you win the case and that you WILL WIN because she didn't pay her rent for the last month. How does she expect you to pay the mortgage when she lived there?

A tenant once tried something similar with us and I wrote a strong-worded email promising her I would fight the case till the end until someone runs out of money and I reminded her I have a large reserve. She backed off.

Listen, the war (in business) happens at the level of words. REI lesson #1.

As a landlord, you cannot afford to be timid. Fair, but firm.

Oh, I would be more than happy to share my email template with you lol PM me

10 Reply

Account Closed

Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes

7y

@Sharon Steenbergen

Take a look at your lease and do what it says. If it was my tenant, I would keep the SD. For example, my leases state that :if a tenant vacants prior to lease expiration, they forfeit SD..."

3 Reply

Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

7y

@Sharon Steenbergen. Court won’t solve anything but it’ll let other people know

Not to rent to them. Most likely you just didn’t screen properly which is pretty common with self-managers

Russ B.

Investor · Cleveland, OH · Member since 2017 · 319 posts · 330 votes

7y

If you get a judgement, it'll be there forever until it's handled. If she wants to buy a house years down the road, she'll have to deal with you. It will also tip off future landlords (and every other type of creditor), so they know to avoid her.

As for the security, I'm pretty certain the "can't be used for rent" thing only applies during the lease - unpaid rent after they're already out is fair game. MA is a super tenant friendly state, so maybe ask a lawyer or somebody local, but I would be shocked if you really had to give it back... that would just be absolutely bizarre in my mind, to have to return it.

However, if you did return it, she might be able to use that as a defense if you sued her - giving her deposit back can be construed as you agreeing that she was entitled to it.

OP

Member since 2019 · 55 posts · 55 votes

7y

@Ola Dantis I would love to see that template!! Thank you for your input!

@Caleb Heimsoth I did the best I could vetting her. She had strong references, spoke to her previous landlord, her boss and checked her credit. She was an industrial design specialist that grossed 7k a month. I mean.....

My lease does state all that good stuff.

DAMAGES: If this Lease terminates because of a default of the Tenant, the Tenant must pay to the Landlord the remainder of the rent due under the lease, until the unit is occupied by a new tenant paying equal or greater rental amount. If the unit is occupied by a tenant paying less than the monthly rental amount paid by the undersigned tenant, said undersigned tenant shall be liable for the difference in rental payment due each month until the date at which the lease signed by the undersigned tenant would have expired. The undersigned tenant shall also be liable for any costs incurred by Landlord in re-renting the unit. The Landlord may take advantage of any other remedy which is authorized by law, and may combine any and all available remedies in order to make sure that the Landlord is fully compensated for the Tenant's Default.

ATTORNEY FEES: In the event that Landlord must take any action in relation to a breach of this Lease Agreement, whether it be for non-payment of rent or any other breach of the Lease Agreement, Tenant shall be liable for all costs and attorney fees incurred for such action, subject to applicable state law. This provision shall also apply to any subsequent agreements related to this tenancy, such as an agreement for judgment, or any subsequent related civil actions related to this tenancy.

Even with all of this in the lease, I was advised to not bother pursuing her and be happy that she vacated on her own.

Lydia R.

Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes

7y

@Sharon Steenbergen I actually have no experience with rentals (because of horror stories like this) but I had a suggestion and maybe someone with more experience can comment on whether its possible. Can you report the late payments to the credit bureaus? So that at least other landlords will be able to have an idea of what they are in for when they run a background/ credit check on these people?

Also, on a side note, why doesnt someone create some kind of tenant database? Like yelp but for people? I just recently found out that Uber and Lyft keep notes on riders. They have an internal database/rating system for riders. I had no clue. Something similar could be incredibly useful for landlords.

1 Reply

OP

Member since 2019 · 55 posts · 55 votes

7y

@Lydia R. From what I understand is this - I can not attach it to their credit as a homeowner.
***** someone correct me if I am wrong*********

If you want to attach things to their credit the credit bureau needs to come to your home/office and see how your store and file Creditor information. (Must be locked up and secure). I heard it was a huge painful process.

Property Management can do this.

Also, your idea is fantastic lol. If only.

David BarnettPro Member

Rental Property Investor · Cambridge, MA · Member since 2016 · 634 posts · 415 votes

7y

Revere being Revere?

Al Pat

Rental Property Investor · Atlanta, GA · Member since 2016 · 325 posts · 253 votes

7y

@Sharon Steenbergen double check on credit bureaus requirements. It's hard for individual landlords and not worth it but NO, they don't have to visit you etc. I once looked into it as LLC and you will have to go through the process but not personal visit by them.

Source: https://www.mass.gov/info-details/find-out-what-landlords-can-use-security-deposits-for

Greg M.

Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes

7y

Originally posted by @Kyle J.:

Originally posted by @Lien Vuong:

@Kyle J. In MA you cannot use SD funds towards unpaid rents. Given that this "professional tenant" knows how the system works, it is not worth going through the process and having the triple damages fine against you.

Why do you say that? I've never heard of a state where you can't use a security deposit for unpaid rent, and that doesn't appear to be the case in Massachusetts either:

Quote:

Landlords in Massachusetts may be allowed to keep all or a portion of a tenant’s security deposit for the following reasons:

- Unpaid rent.
- Unpaid water bills.
- Any unpaid real estate taxes that the tenant was obligated to pay.
- Damage in excess of normal wear and tear.

Source: https://www.thebalancesmb.com/massachusetts-security-deposit-law-2125077

Here's another one:

Quote:

After a tenant moves out, the landlord may use all or part of the security deposit for the following reasons:

- Unpaid rent (unless validly withheld or deducted by the tenant) and, if applicable, water charges
- Unpaid increase in real estate taxes (only applicable if the lease contains a valid tax escalation clause)
- The cost of repair of damages caused by the tenant, other occupants, or their guests (does not include pre existing damage or routine painting, carpet shampooing, etc. that is performed because of normal “wear and tear.”)

And another:

Quote:

When you move out, your landlord can use your security deposit to pay for:

- Repairs for damage that are not "reasonable wear and tear."
- Unpaid rent, unless you legally withheld rent for bad conditions. See Chapter 8: Getting Repairs Made.
- Unpaid real estate tax increase, if your contract requires it.32 See Chapter 5: Rent.

Source: MassLegalHelp: Security Deposits and Last Month's Rent

Ultimately @Sharon Steenbergen, I would check with a local landlord-tenant attorney to be sure. But you don't want to miss out on money that is legal owed to you.

Even looking up the City of Boston laws, it says:

A property owner can only keep your security deposit for three reasons:

to cover unpaid rent
to repair damage that you caused (aside from normal wear and tear), or
to pay your percentage of a property tax increase. This would only happen if there was a clause in your lease about it.

Boston.gov

Brian Ploszay

Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes

7y

Usually tenants who are evicted do not have stable jobs, residences and they have plenty of other judgments. A proper screening usually catches these people. It does happen, rarely, that a screened tenant will be evicted.

Tim Rostro

Rental Property Investor · Centralia, WA · Member since 2017 · 75 posts · 85 votes

7y

I saw this thread and immediately wanted to give my thoughts on this as it happened to me on two of my properties. The first one, the tenant was falling behind on 2 months rent and just left the keys at the PM's office with no explanation. I was asked if I wanted to pursue the matter but it just wasn't worth the legal fees. This failure to pay rent also stays with the tenant for 7 years from what my PM said.

As for the second time, the tenant had a medical issue which caused her to fall behind. My PM and I tried to work with her but she kept giving excuses every month and finally, she moved out 2 months ago. It was over $2000, plus the bed bugs that she left behind that we had to call pest control twice, and then the unit's furnace blew up after she left (I don't know if it was her fault or it just needed replacing).

I asked my PM if I can pursue the matter but again, the legal fees just weren't worth it. As much as I want revenge on these tenants and make their lives miserable, it's best to just write it off. This is the price we pay as real estate investors: for every good paying tenant, there are 4-5 bad ones who will take advantage of you. I do believe in karma and hopefully, those tenants get theirs down the road. Just my opinion on this matter.

1 Reply

Pratik P.

Flipper/Rehabber · Sacramento, CA · Member since 2016 · 807 posts · 815 votes

6y

I would file for small claims, it's pretty cheap. Like you said, it's a matter of principle and not money. Maybe a judgment on her record will let other people know about her. If you REALLY wanted to take it further, you can freeze accounts, garnish wages, etc. Also, I would not return the deposit

Anthony Rosa

Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes

6y

I'm in NYC and it's tenant friendly. My attorney advised me to hire a Professional Tenant if I ever had an eviction or situation with payment. These Pro's know the system better than anyone. They use time tested methods in court for Any tenant non paying situation.