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Tenant Skips Out / Owes Money

What to do if your tenant skips out and owes you money


If your tenant has moved out without paying their full rent, pursuant to your lease agreement, you have the right to receive all of the unpaid rent and additional fees if their security deposit does not cover the due amount.

 The first step is to locate the lease or rental agreement.

 This agreement should include their name, signature, Social Security number, contact number, the name and contact information of everyone living in the household, monthly rent due date and amount, and non-payment penalties. You may call the tenants and everyone that lived in the house to try and collect the rent yourself.

Keep a record of your collection effort, including phone calls, any voice messages left or email/text messages sent, last paid rent date, and copies of receipt from any repairs. If you are unsuccessful with collecting back rent, you can file a small claim case or hire a collection agency to pursue your claim.

 Small Claims Court

If you file a small claims case against your tenant, pursuant to your lease and the local court rules, you may also be able to collect money for additional damages, late fees and legal fees.  You will need to invest money for court fees, your time and effort in every step of this route and unfortunately, some tenants are judgement proof.

 Contact your local small claims court for paperwork, and locate your tenant’s new mailing address so they can be notified of the proceedings.  You do not need an attorney, but you need to be present for your court dates. Depending on how much your tenant owes you, small claims court may or may not be worth the investment you have to make.

 Collection Agency

 With the information you gathered, a collection agency may be able to find your tenant. The rest of the collection work will be done by the agency. Flat-fee services charge a low-cost up-front payment allowing you to keep the majority of the proceeds, while contingency services charge a higher percentage of the money collected.

 Collection agencies that specialize in rent collection can also report the debt to the credit reporting bureaus which will leave a negative mark on the debtor’s credit reports and will remain for seven years.

 

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