Dealing with a witheld check from a tenant

[Tim Wilderbeeste]

Though we have owned a number of properties for a few years, we only recently came across the issue of a tenant having a check deliberately cancelled on us on their way out of the home. In this particular instance the tenant took a lovely open-plan 3 bedroom house and secretly walled off the formal living area to create an extra bedroom for his kids. We could have evicted them when we found out, but rather than make waives, especially with a bunch of young kids involved, we just let them see out their lease before informing them that it wouldn't be renewed and gave them the appropriate 30 days notice. Typically, they now see themselves as the aggrieved party - 'what's the big deal' was the response we received regarding the modifications!

As part of all this behaviour, our bank called us a few days ago and told us that the tenant has cancelled their last rental check to us, which has resulted in our issuing a 3 day pay or leave notice to initiate the legal processes.

In the likely event that we're not paid we're not quite sure how to approach the matter, because we're now left with the option of pursuing the tenant on multiple counts. My wife asserts that we can issue a notice claiming that the tenant make good on the check otherwise he'll be up for a penalty three times the amount if the ruling is made in our favor. Then of course we can simply take the more normal route of pursuing a ruling in our favour for lost rent, repairs, cleaning costs, etc - we've been down that route successfully before. 

Lastly, we're not quite sure how their deposit sits on this as things are a little confusing - I assume the non-payment via the cancelled check means they've breached the lease agreement and it's now forfeit, not subject to some claim on their part that they left it in lieu of the rent, right? Or does pursuing them on the count of the check complicate the process? We've had one other tenant skip out owing rent, but in her case it was much more clear-cut as she abandoned the property well before her lease was up - as well as abandoning her pets. The dog we re-homed - the turtle I gave to my daughter!