Past Rent Collection

10 Replies

Hi, I had a tenant at a property who I had acquired with the property about 2 yrs ago. The tenants were living (for 8 yrs when I bought it) in the property with a month-to-month lease when I purchased it but had no deposit with the previous owner. I was able to convert them from a month-to-month lease to a year long lease but did not collect a deposit, which was a big mistake. Learnt a big lesson !!

They had a lease until June 30th, 2018. However they vacated around June 2nd without giving any notice and wouldnt pay their rent for June.

When I contacted my property management company, they wrote me back this -

“Since the tenant has already vacated the property, the next step we can take is sending the tenant to collections, which would be a 3rd party collection agency. The collection agency would continue to try and collect the funds, and once collected, they would keep 50% of what is collected from the tenant. Another option would be for you to take the tenant to small claims court to collect the rent that is owed to you.”

With these two options and not having the deposit, what would you suggest I do ?? Any other possibilities ?

Thank you for yiur help.

How much damage to the property was done?  If you just lost 1 months rent then I would suggest you cut your losses and move on, it could have been far worse.  If there is significant damage then it might be worth it to go after them.  Even that is usually more hassle and costs more money that its worth.  

My suggestion: turn that sucker quickly and replace the tenant.  

Did you serve a notice? This is probably much more complicated then just sending it to collections. You would probably need a judgment against them. Not to mention usually (depending on state law) you are required to mitigate damage by re-renting the unit. Also, they were at the unit for about 10 years, they stayed for 1 day into June and were on the last month of the lease. In reality your Damages a nominal. Also, the security deposit is not for missed rent only damage to the property.

A notice of late payment and eviction were served by the property management company. Wondering why we would need a judgement against them if we dont go to a court for this. As per the lease, they were supposed to pay and use the home until the end of lease or notify us in advance. The property is in TX but we will check with an attorney before proceeding.  Thank you for pointing out about these points. 

Just have it put into collections. THEY WILL PAY maybe not now or even in 10 years, but if they ever want to own a home or rent again they will have to take care of that debt. You may not get everything but you will get something back. 

Hold on....  You had a tenant in the property when you bought.  They paid rent for 2 years solid (no vacancy loss).  And you complain about the last month's rent?  Your budget ought to figure a 15% vacancy loss (at a minimum).  That there was minimum damage is an added bonus.

Get a deposit next time and count your blessings.

While I respect your opinions and appreciate the help I get, sometimes, I do not understand some of the comments thrown out. I definitely do not want to start an argument or a heated debate on this but wanted to share my side of the story.

To me, this is a business and I dont know anyone who will like to lose money in their business, especially when I am asking for what I am owed legally. Just because soneone stayed in the property for a long time doesnt mean that there were no maintenance costs and no mortgage costs for me. I was nice to them during their entire stay taking care of things that the previous owner totally neglected. Upon their request, I even let them extend the lease for 3 months to accommodate their kids' end of school year and they just tried taking advantage of the situation.

I do realize that I should plan for these but sometimes nothing works despite the best of planning. I didnt collect a deposit when I had them sign a lease, which I wont do in the future. 

Thank you all for your help !!

"Upon their request, I even let them extend the lease for 3 months to accommodate their kids’ end of school year and they just tried taking advantage of the situation."

First: did you ask them about renewing their written year lease? You say they left without notice, and they did, but if you didn't try to get a new lease signed, they didn't need to give notice; your notice was that they didn't sign a new lease. Rude, sure, but can't say it was without notice.

Second: Deposit -- did the old owner have a deposit from them? Check your closing statements. If you got a deposit credit (perhaps not labeled as such, but a credit none the less) towards your purchase price, then guess what? You DID get a deposit. Check your closing documents and see. Do that BEFORE you do anything about collections. They pop up in court with proof of a deposit with the old landlord, and no return of it by him, then YOU are s.o.l. AND on the hook for their appearance fees and court costs, possibly attorney's fees. Your attorney should have nailed that question down before closing on your purchase. If the seller is still around, give him a call and find out -- can't hurt.

Third: They didn't damage the apartment, normal wear and tear excepted. They paid rent on time with the POSSIBLE exception of the last month, and that's IF they didn't put down a deposit, a question you cannot answer until you look at your closing documents. That makes them good tenants to 99 percent of the landlords on this forum.

Fourth: IF ***IF***IF they didn't have a deposit (you'll check your closing documents) and skipped out on the rent, then sure, look into contingency fee bill collection.