The Outcome of My Lawsuit From an Unhappy Tenant – Part 2


Last week I wrote about how a lawsuit against me by one of my tenants for $5,000 got dismissed and how I countersued and won about $3,500. I got several questions about the lawsuit, which I’m going to attempt to answer today.

The reason I ended up getting sued in the first place was because a tenant decided she did not want to move in and she wanted her security deposit and first month’s rent back because she claimed the property was uninhabitable.

One person asked me why I didn’t just give the money back to avoid the hassles of court and legal fees and time wasted. Well, the reason I didn’t give the money back is because unlike far too many people in this day and age, I am a man of principle and I believe if you sign a contract you should honor it.

Also, like most people, I don’t appreciate when someone tries to deal dishonestly with me and that’s what this tenant was clearly trying to do. So there was no chance I was giving her the money back. (Did I mention I can be stubborn?)

As far as legal fees, I did not have any.

One of the things I learned about small claims court was that attorneys are not allowed. It was just me and the tenant telling our sides of the story. My biggest investment in the whole thing was my time. And since I ended up getting to keep the $2,200 from the tenant and also got awarded $3,500, it was worth my time to show up to court even though I wasn’t happy about it.

Another person asked how I was going to collect the judgment I was awarded against the tenant. That is a very good question I am still figuring it out. One of my options is to hire an attorney and have them take care of it for me. I still have to look into this and I have no idea what it is going to cost me. Since I was only awarded $3,500 it might not be worth it.

The other option is to hire a collections agency. I don’t have to pay the collections agency any money upfront, but they do get to keep 50% of any money that is recovered. I have used a collection agency in the past for other business matters and I was impressed at what a good job they did. And getting 50% of something is a whole lot better than getting nothing.

All I know is that if I had to do it all over again I wouldn’t change a thing. I ran the tenant through the same process I have been putting tenants through for the past 10 years and every once in a while a bad egg is going to slip through.

UPDATE: Guess what? As I was finishing up this article I checked my mail and there was a letter from the tenant. It was a long, angry, rambling letter about how she couldn’t believe I did this to her and how I “stole” from her, but included in the letter was a check for the full amount. So now I have my money and all is well.

About Author

Jason R. Hanson is the founder of National Real Estate Investor Month and the author of “How to Build a Real Estate Empire”. Jason specializes in purchasing properties “subject-to” and has purchased millions of dollars worth of property using none of his own cash or credit.


  1. I’m sure you recognize just how lucky you were that the tenant willingly paid the judgment. You would have otherwise learned that collecting on a small judgment (yes, I know: “small” is all relative) may not have been worthwhile without giving a piece of the pie away as you have done in the past. I’m not aware of what state you’re in (or why your small claims court doesn’t allow attorneys), but there’s some benefit to using an attorney throughout the eviction process -particularly when one doesn’t have any prior experience. In my home state (Florida), the cost of hiring an eviction attorney is not expensive. What drives up the costs are the filing fees, court costs, sheriff fees and, of course, the lost rent while the tenant is taking advantage of the system AND an inexperienced landlord. Sooner or later, a rental property owner is bound to run into, what I like to call, a “professional tenant”. For what it’s worth, the old adage “he who represents himself, has a fool for a client” has a way of ringing true more often than not. I’m truly glad, though, that it has worked out for you. Thank you for sharing your experience with your readers.

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