Collecting Past Due Rent after Eviction

Investor · Walnut Creek, CA · Member since 2019 · 19 posts · 9 votes

I evicted a tenant in Oct for multiple lease violations, including non payment of rent. My PM says once the property is re-leased, they will send the evicted tenant's outstanding balance to a collection agency, but the chances of getting that money back seem slim.

What have other landlord's / PM's done to get some of their money back after an eviction? I am an out of state investor so I can't physically take them to small claims court.

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Julie Hartman
Property Manager · Denver, CO · Member since 2021 · 667 posts · 587 votes
5y
I don't know why your PM says they can't send to collections until they secure a new tenant; one doesn't have anything to do with the other. We typically send to a collection agency and have had success with that. Going that route though means you will sacrifice some of the money but it's better than nothing. The company we use takes a 40% cut of the collection but they do all the leg work so it's worth it. They will locate the evicted tenant and go to court on your behalf as well. IF they can locate the tenant and win a judgement, they will most likely garnish their wages (assuming they have a job).
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Jane Ng
OP
Investor · Walnut Creek, CA · Member since 2019 · 19 posts · 9 votes
5y
@Julie Hartman my PM wants to wait until we secure a new tenant to include those months of lost rent (between the time we evicted the tenant and a new tenant moves in) since the evicted tenant's lease was through April 2021.
What is your success rate with your collection's agency? Anything I can do, as an owner, to increase chances of collection?
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Julie Hartman
Property Manager · Denver, CO · Member since 2021 · 667 posts · 587 votes
5y
Originally posted by @Jane Ng:
@Julie Hartman my PM wants to wait until we secure a new tenant to include those months of lost rent (between the time we evicted the tenant and a new tenant moves in) since the evicted tenant's lease was through April 2021.
What is your success rate with your collection's agency? Anything I can do, as an owner, to increase chances of collection?

Okay, that makes sense then. If this is managed by a PM, they will be the ones sending to collections on your behalf, so there really isn't anything for you to do other than be patient with the process. Your PM will have the documentation of unpaid rent and damages which the collection agent will require. We have had good success with using a collection company and I would say it has been worth the % they take to chase the money. It may not be a quick process though, so be prepared to wait it out.

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- Jim Bob
  Member since 2022 · 72 posts · 9 votes
  1y
  Quote from @Julie Hartman:
  
  Who is the collection company? Do they work on Florida deadbeats?
  
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- Jim Bob
  Member since 2022 · 72 posts · 9 votes
  1y
  Quote from @Julie Hartman:
  
  Originally posted by @Jane Ng:
  
  We have had good success with using a collection company and I would say it has been worth the % they take to chase the money. It may not be a quick process though, so be prepared to wait it out.
  
  Who is the collection company? Do they work on Florida accounts?
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
5y
Originally posted by @Jane Ng:
I evicted a tenant in Oct for multiple lease violations, including non payment of rent. My PM says once the property is re-leased, they will send the evicted tenant's outstanding balance to a collection agency, but the chances of getting that money back seem slim.
What have other landlord's / PM's done to get some of their money back after an eviction? I am an out of state investor so I can't physically take them to small claims court.

I believe your PM is wrong.
Once you have the eviction and the tenant is out, that's it. You can no longer charge them for rent or vacancy because they've been evicted and are no longer liable for the rent.
As for collections, their rate of success is abysmal. I have dozens of collection accounts with three different agencies. I have two accounts that were paid in full, a couple that received less than 25%, and a couple that literally received $20 - $40. They do report the tenant to credit reporting agencies, so I take comfort in knowing they must be suffering at least a little.

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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
1y
Quote from @Jane Ng:

I evicted a tenant in Oct for multiple lease violations, including non payment of rent. My PM says once the property is re-leased, they will send the evicted tenant's outstanding balance to a collection agency, but the chances of getting that money back seem slim.
What have other landlord's / PM's done to get some of their money back after an eviction? I am an out of state investor so I can't physically take them to small claims court.

You can sue them, but sounds like they are poor and don't own any property. So if you don't have anything to lien your chances of collecting are tiny. That's why we have the term "judgement proof" in this business. You poor tenants are essentially judgement proof. Tracking them down isn't worth the cost. You'll spend more trying to collect than you'll ever collect.

Sending them to collections usually has no up front cost as the collection companies work off of a % of what they collect so send them to collections and move on. In the rare event that the collection company actually collects something from them, it should be considered a lucky bonus.
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