Tenant owes back rent, best way to go after them?

Question

A tenant has moved out of a clients property and owes 2 months of back rent in Philadelphia, PA. My client is curious what is the best way to go after the tenant, to sue in small claims court or to try to hire a debt collection company?

Thomas S. · Answer

I prefer to use small claims court. I have had good success with tenants paying, garnishing wages and have had tenants come back years later to settle their debts.

Personally I like having the gratification of destroying their credit ratings.

Ryan Murdock · Answer

@Matt Daley Chasing a former tenant for unpaid rent is usually a good exercise in throwing good money after bad. Unless these people have the means to pay and/or intend to make a major purchase at some point in their lives that a credit score would affect I wouldn't bother.

If these are lower end tenants with no money, no credit, and no real future anyways don't waste your time.  Even if you go through all the hassle of small claims court you still can't force payment if they can "prove" they just don't have money.

If you can find a collection agency that is still even willing to take on rental debt they will harass the former tenants on your behalf for a hefty cut of whatever they collect . This involves minimal effort on your part so you have very little to lose and the (small) possibility of maybe gaining something with this option.

That aside, cut your losses, get the unit turned, and get paying tenants back in place.

Paulette Midgette · Answer

@Matt Daley, I hate to say this but your client may want to call this a write off.  You can hire a collection agency, but where will that get you?  The former tenants will quickly identify the collection agency's number and not answer. Or if the agency gets through they can hang up, make promises they are not going to keep.  If they left owing rent that speaks to their character.  I don't think a collection call will scare them into paying.

You can go the small claims route, but just like a landlord's favorable eviction of a tenant for nonpayment of rent, it is impossible to collect.  I learned that you cannot garnish wages in Philadelphia with small claims or eviction judgments.  You can take the money from a bank account but you will have to have the tenants bank information.  If they paid rent with checks you have a decent chance of pulling the funds from a bank account.  Otherwise you have to eat the lost.

Thomas S. · Answer

Never just walk away from these type of criminal tenants. Professional businesses do not survive by letting delinquent customers walk away scott free. You take them to Small Claims Court. The cost is part of your expense budget on the property. It costs you nothing.

Sam Shueh · Answer

You got it right. GO through court after numerous cancellations and postpone you go to the court and they do not show up so you can collect via collection company. I think they charge minimum 1 month and you probably got little left.

Easiest is deduct the loss on your income tax.  You are done and work on better paying tenants which is more urgent.

Scott C. · Answer

@Nicole W. "How did the tenants get 2 months behind?" It's easy. They could have been long term tenants and promised to pay. I knew of someone who rented for about 6-7 years, at the same residence, that fell on some hard times. The landlord let them slip by for 6 months before they finally agreed it would be best to move out if they couldn't pay. They had every intention of paying, just had a run of bad luck with work and money.

Nicole A. · Answer

Are you a Property Manager or Attorney? Apologies for being blunt, but shouldn't you know the answer to this question already?

How did the tenants get 2 months behind? You need to know your area's laws. To file small claims, you'll need to first see if you need proof of nonpayment of rent, such as filings of eviction.

Also, you can only garnish normal wages. If tenant had income such as SSI, that income is not eligible to be garnished.

Matt Daley · Answer

Thanks for all the responses. I am not an attorney, in this case I am the clients Realtor selling the condo for them. I have been fortunate enough to not have to deal with this in my rentals. From what I am told the tenant actually has (or maybe had) good credit, good income etc. Was going through a bad situation and my client was a little too lenient on him and as soon as he found out he was going to sell after the lease was up he left. My client would love to recoup the money he is owed but at the very least does not mind a headache to make sure the tenant is at least affected but being so malice.

Thanks again for the help.

Deanna McCormick · Answer

collection agency might not proceed until heard in small claims,, I guess find out.

Tenant owes back rent, best way to go after them?

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