Rental license needed to sue tenant?

Question

Hi everyone,

I came across the forum and there seemed to be some very knowledgeable folks out there so I'm hoping someone can help.  I currently own a condo in Center City Philly.  I used to live in it but left in 2009 (now I live out of the country).  Since then, I've been renting it out.  I started renting to a new tenant in June 2013.  He signed a year lease.  However, his company has decided to move him out of state and consequently, he has decided to pay through Dec and have his deposit cover Jan leaving me incomeless for Feb-May.  He vacated the property in Nov.  I've decided to sue for the 4 months of rent he has stated he will not pay.  Upon investigating this, I've just learned that I should have had a Housing Rental License which I do not have.  If I obtain this now, does anyone know whether I can sue for Feb-May rent?  Can I still walk into the licensing office to get this rather than waiting the 4-6 weeks?  Also, I see that I need a Commercial Activity License which requires a City of Philadelphia Tax Account number.  As I am an individual, rather than a company, do I still need this or is it enough to use my Social Security number?  Any help in understanding what I need to do would be greatly appreciated as I'm a bit confused now!

Thanks!

Edward Synicky · Answer

I could not agree with Craig more. In 40 years of renting investment property I have collected on one tenant that skipped. It must just be a business decision, do you want to spend your time and money with little hope to recover anything. There is a case to be made for affecting the tenant credit for the next landlord to view, but that should be looked on as just the right thing to do, collecting after a judgement is doubtful at best.

Steve Babiak · Answer

Bill Gulley - did I just read you telling the OP to LIE about having a license?  The OP has stated that she/he does not have a license.

Here is a link from the City of Phila:

https://business.phila.gov/Pages/HousingRentalLicense.aspx

Before entering into a lease in Phila, the tenant must be given this next document (I get a "receipt and acknowledgment" signed by the tenant as my proof):

https://business.phila.gov/Documents/Licenses/partners_for_good_housing.pdf

So your lease my be considered "invalid".  Very unlikely that you will get your tenant to say you gave them this form as required.

The Tax Account (BIRT) number is one that the City issues; they will probably want your SSN to give you the BIRT number.

Some other links that you might find useful are located at this next link (I have no affiliation with the owner of the site - just passing along info that has already been compiled there):

http://brownstonere.com/blog/landlordresources

Phila is more tenant friendly than landlord friendly BTW - so in front of a judge the landlord will be expected to be the "pro" and have all paperwork in order ...

Dave Toelkes · Answer

Generally, before you can sue for future damages, you must attempt to mitigate those damages.  You don't know how much rent you will lose from the broken lease until you get a new tenant in place.  If you rent for more than your current tenant was paying, you won't have any damages to sue for.  If the market will only bear a lower rent, then you can sue for the difference you would have gotten if the lease had not been broken.

Suggest you consult an attorney for specific details.  In my 30+ years of landlording, I have never had damages to recover from a broken lease.  Suggest you make your security deposit equal to about 120% of your monthly rent.  That way when a tenant breaks the lease, and you use the security deposit for the last month rent, you have a little left over to cover your cost of getting a new tenant.

Bill Gulley · Answer

Well, it sure wasn't meant that way! Left out my first thought, go get the license if you don't have one. Then if you go to court and you are asked, you can say yes you have a license! Wow, good catch Steve, I missed that and no, you know I don't suggest such things, thanks.

Well, horsefeathers! Auburn just sealed up the SEC championship, the Tigers will be beat the Tigers! Ahhh, second isn't so bad Mizzou. :(

Bill Gulley · Answer

The question the judge will ask is "do you have a rental license?" you can answer yes. He will then proceed with your case for back rents. If the tenant has a sharp attorney, (doubtful) there could be an issue if you were not compliant for a period where you are seeking damages, seems that would be up to the judge.

Best to call the city finance department and ask them, I doubt they would misguide you for some fee. Another tax issue may be with business property taxes, here they like to zap landlords for appliances in units, so you may need to get straightened out with them with a tax number, but I don't know about them. I'd just call and ask.

Rob K. · Answer

I'm not sure about the whole license deal, but @Steve Babiak  would probably have an answer.

Also, in order to sue the tenant for the remaining rent, I'm pretty sure you would need to actively try and re-rent it. You have almost two months notice here. What's stopping you from renting this place? I know you're overseas, but you could have an agent rent this place for you and maybe have a new tenant lined up for when the old one leaves.

Craig Rismiller · Answer

I am not sure about the need for a license in Philly so maybe a few other BP members can chime in.  With that said you may want to step back and determine if going after this guy for a judgment is really the best business move.  Here are some things to consider:

1. He left in November, how soon do you think you will have the unit re-leased?

2. Did he leave the condo in good condition or are major repairs needed?

Unless this guy trashed your condo (doesn't sound like from your post), I would personally just forget about seeking a judgment and get the condo re-leased.  If you started marketing the day he moved out in November, you probably could have had a tenant in place by mid December or early Jan. and you wouldn't have been out any lost rent.

I know this may not be what you want to hear, but if you seek a judgment it is going to cost you filing fees, attorney fees, and then you still have to collect the money.

Rental license needed to sue tenant?

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