Tenant skipped out water bill and electricity bill

Tenant skipped out water bill and electricity bill

Investor · Upper Marlboro, MD · Member since 2015 · 29 posts · 11 votes

Ok where do I start, I would try to make this long story short by giving highlights and follow it up with my question.

  • First time out of the parents house and rented with me
  • HOA sent letters concerned that there might be illegal activities going on, confronted them, they denied any wrong doing.
  • one of them was a smoker. I specifically asked, any smokers during the application process and they(3 of them) said NO.
  • I inspected the unit every 3 months just to make sure things are on the up and up, most cases yeah. replace damaged blinds and replace light bulbs (not doing that again, they called because a light bulb was out after that. they are not kids mid-upper 20's with kids)
  • The unit had 3 water leaks in the span of 3 month (grey pipes <sigh>. I have a post about this in another forum. look for grey pipes) 
  • It was coming to the end of their lease and informed them that I would not be renewing the lease because I would like to replace all the water line in the unit by taking out the recalled pipes.
  • rent has always late (7-10 days)
  • water company always send a courtesy bill letting me know what the water bill balance is. balances was carried from quarter to quarter.
  • Before they left, they asked for their security deposit (1 months rent) so they can use it as a deposit at the new place, i declined because it was meant for damages etc when they moved out.
  • Gave them 6 weeks to find a place, the main lease holder moved out 3 weeks into the 6 weeks without informing me. i sent numerous notices for the main lease holder to let me know 5 days before vacating so we can do a walk thru, never did.
  • On day 5 of their last month, I asked for the rent, and was told they would pay when they move because they do not know when they would be leaving. I figured there is nothing much I could do, i cant evict them (court paper work etc), they are on their way out. on day 5 they said they are sure they wont be there any longer than day 19, when day 19 came around that was when I found out the main lease hold left on day 12, leaving the other 2 there. Informed them the clock is still ticking until I get the keys. so the other 2 left on day 22. I was there that morning to collect the keys, and they still left  bunch of junk which i had to toss out after numerous notices for them to pick them up.
  • at this point i had no choice to use their security deposit to cover that months rent, and am sure that was their intention, not paying and using the deposit as rent. So I prorated for the 22 days + damages = deposit + approx $160. Now they owe me about $160. Not sure am going to see that, I am willing to write that off.
  • Now they left a hefty water bill of about $700 and light bill (amount unknown, company will not disclose since it not my bill owner, but I was told it's HUGE, I figured between 700-1000. did a i little guessing game untilI was in the ball park). Every time I visited the electric furnace is constantly on high, even when they go to work (LOL). thats another story. they swapped out my 7 programmable thermostat for a non-programmable one...go figure. was told it was too complicated.
  • electric bill are individual bill and water bill (although in the tenants name) is still tied to the property because it's a city service. 
  • Now am stuck with the water bill. I do not mind paying it because my next tenant would need to turn the water on in their name, and can't do so with a previous balance.
  • How can i collect on this, either thru wage garnishment or have a collection company do the dirty work of collecting. 
  • BTW, when they were signing the lease they also agreed and signed a letter on my intent to report their paying habit either good or bad to a service called  tenantverification.com, hoping they would want a good record by paying on time and not leaving any bad debt behind.
  • I live in Maryland
  • SO HOW CAN I COLLECT?
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Property Manager · Allen, TX · Member since 2015 · 190 posts · 160 votes
10y
I know it may not be your preferred route but you should sue them. Use the court system, this is what it is here for. In Texas, withholding the last month's rent thinking the security deposit will cover it is automatically seen as bad faith on the tenant's part and you can charge them 3x the rent amount in damages. I think that filing with the court is always the best way for you to establish your side of the story and get it on record that this money is owed to you. I would also reach out to the tenants first and tell them your plan. You never know, they may want to pay what is owed so they don't have a judgment on their record.
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  • Investor · Cathedral City, CA · Member since 2014 · 481 posts · 170 votes
    10y

    I think we all fear this. I am guessing tighter controls and stricter rules could have been used. Sometime we get stuck. Taking faster action on collecting rent could have helped. Sometime it is better to get rid of the bad ones, even at a cost.

  • Real Estate Investor · Schaumburg, IL · Member since 2014 · 76 posts · 30 votes
    10y

    I agree with Jeff Gates - use this experience to sit down and develop a list of addendum changes in your lease - where to add best practices allowed in your county/state to your process. I recently attended a local REIA meeting where a 20 year experienced paralegal was the main speaker. I have attended 2 of her prior seminars and always learn something new with laws changing etc. She went through valuable tips regarding lease language on payment allocations to all unpaid utilities, late fees, NSF fees prior to paying down rent. In our experience it has been very helpful to review with new tenants the credit reporting process used, a discussion that legal notices are served on the day allowed by the county you reside in and expectations on timely rent/utility payments. You can message me if I can help with providing you information on any details. Hope that helps

  • Patrick LiskaPro Member
    Investor · Verona, NJ · Member since 2014 · 1k+ posts · 832 votes
    10y

    i have a couple of student rentals, originally all the utilities were put in my name. one of the groups of students actually contacted the electric company and had the electric put in their name. I had no problem with that, because it was still tied to me as being the owner of the property, when i log on to the electric companies web site i can see all my accounts with them and i can check and see if they are paying because it still is tied to me. see if your electric company will do that and send notices to you if they are late.

  • Wayzata, MN · Member since 2014 · 34 posts · 12 votes
    10y
    That's going to be a tough one. I would almost try to call them and negotiate with them. I've only done this one successfully but you can garnish their wages after you have a judgment against them. So step one would be to go to your county courthouse and file in small claims court. They won't show up. Then you have to have a judgment transferred to a different department so you can garnish wages. It's expensive so I really do think the best way to do would be to try to get them to the negotiate. Good luck.
  • Property Manager · Allen, TX · Member since 2015 · 190 posts · 160 votes
    10y
    I know it may not be your preferred route but you should sue them. Use the court system, this is what it is here for. In Texas, withholding the last month's rent thinking the security deposit will cover it is automatically seen as bad faith on the tenant's part and you can charge them 3x the rent amount in damages. I think that filing with the court is always the best way for you to establish your side of the story and get it on record that this money is owed to you. I would also reach out to the tenants first and tell them your plan. You never know, they may want to pay what is owed so they don't have a judgment on their record.
  • Levi T.Pro Member
    Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
    10y
    I'm with David Hines , use the courts, and get a judgment and collections on them. You have the right, slam dunk case IMO. Stop kicking the can down the road, tenants breach your lease, evict them, don't keep letting them get a few extra days on anything. Sounds like you need to do better screening on the incoming applicants, unless the property is in a slum. It's better to evict fast in this business than it is to give someone more lead way to run you over.
  • Member since 2016 · 13k+ posts · 12k+ votes
    10y

    Take them to court. This will not be your last criminal tenant, if you stay in the business, so you might as well get educated now on the process.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    10y

    Read your lease and all docs you had them sign. When it goes to court the judge will look over your papers.

    Talk is cheap because it can be manipulated in a person's favor. In writing usually carries more weight if the document is legit.

    You mentioned a water pipe problem with a recall. The past tenants might use that as a counter claim to having to get out etc.

    Analyze your credit file for income and what kind of credit they had. When they came to be your tenant did you go more than one landlord back to check for references? The current landlord if a bad tenant sometimes gives glowing reviews to get them out of their unit. The landlords further back will really say most times what they think about the past tenant. Check and make sure references are accurate. Sometimes they put friends or family to act as landlords or an employer etc.

    If these tenants are hardly collectible it might not  be worth your time to pursue the other amounts owed.

    No legal advice given. 

  • Investor · Upper Marlboro, MD · Member since 2015 · 29 posts · 11 votes
    10y

    Thank you everyone for the advice, I will surely make sure i tighten my rules for the next tenant.

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