Tenant left buying new home,owning back rent. Suggestions needed

Tenant left buying new home,owning back rent. Suggestions needed

Dallas, TX · Member since 2015 · 27 posts · 1 vote

I have a single family house in Alabama. I am out of state and manage it myself. Lease ends in 7/15/2018. Tenant started to pay rent late back in November of last year. I have been working with the wife on allowing her to be late with a minimal late fee. I treat her with understanding and respect.

In April, after many excuses like grandpa passed away etc, she finally said she could not afford the rent anymore because her husband had lost his job for a while. I told her she can leave and try to pay the back rent when she is able to. By the day she moved out in early May the back rent is $4900. Of course after she moved out, I was not able to get hold on her anymore by email or phone.

I inspected the property. I can tell she tried to clean the house but a lot of junk left in the yard. She insisted she had made arrangement for somebody come to pick up but nobody showed up. After a week, HOA picked it up and charged me $375. She also had painted the house with unfinished job – a few rooms only painted partially with a drastically different color. Her dog has been lived in the garage it smells so bad. The garage ceiling has a huge hole looks like somebody has fell thru it. The yard is a messy I spent $600 to get it cleaned.

I had the house remodeled and sold it in July.

I was ready to let her go feeling sympathy of her husband’s job loss. But one neighbor told me that the tenant actually bought a house nearby. I tracked down her new address and confirmed by county record that they did purchase a new construction home which worth 2 times of my rental property. They actually have the money but chose not to pay the rent and take advantage of my sympathy.

Their back rent by the day they move out is $4900. By the end of lease (2 months more) is $4900+$3000. They have $1450 security deposit. Even I don’t charge them anything on the house damage (I remodeled the house for $10,000 I know I should not charge them for that), they owe me around $6500.

I have sent them a bill in certified mail requesting an immediate payment but no response. It has been 3 weeks.

What should I do next? It is in Alabama. I am out of state. I am determined to hold them responsible. If they cannot afford to pay, that will be different. But for people who can buy an expensive new house, it is unforgivable to not pay their bill. Please let me know what you think. Sue them in small claim court? I am out of state so I would need hire a local attorney.

Thanks for any thoughts/suggestions.

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Phoenix, AZ · Member since 2017 · 93 posts · 105 votes
7y

In Arizona you can take them to small claims court...but I had to physically file the papers.   

I've sued renters in the past..and I have always,, after some time,, recovered money.  

Its a lot of work..but don't know if you can file remotely...but you will have to physically appear in court (maybe).

The goal is to get money..if you get a judgment,,record it in the county..they will eventually want to buy a car...and won't get credit or sell their home, but won't be able to sell their house if there is an outstanding judgement....

Dont give up.   

My wife says,    "my biggest problem is thinking people are as nice as you...this is what always f***s up. "

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  • Phoenix, AZ · Member since 2017 · 93 posts · 105 votes
    7y

    In Arizona you can take them to small claims court...but I had to physically file the papers.   

    I've sued renters in the past..and I have always,, after some time,, recovered money.  

    Its a lot of work..but don't know if you can file remotely...but you will have to physically appear in court (maybe).

    The goal is to get money..if you get a judgment,,record it in the county..they will eventually want to buy a car...and won't get credit or sell their home, but won't be able to sell their house if there is an outstanding judgement....

    Dont give up.   

    My wife says,    "my biggest problem is thinking people are as nice as you...this is what always f***s up. "

  • Rental Property Investor · Fort Collins, CO · Member since 2015 · 273 posts · 127 votes
    7y

    So long as you have the proper documentation, seek out a collection agency. They'll take 50% of what they recover, but hey, 50% of $6,500 is a whole lot better than nothing, especially because you were ready to forgive it.

    If you don't have the property paperwork and documentation, your best bet would be small claims court and hope a judge will rule in your favor with what evidence you can provide.

  • Member since 2016 · 13k+ posts · 12k+ votes
    7y

    I would suggest sending  it to a collections company and be done it otherwise forget it.. 

    Based on your previous management of them as tenants I would guess that taking them to court is probably too much effort. 

  • Investor · Hyattsville, MD · Member since 2012 · 822 posts · 441 votes
    7y

    start calling up a few contingency collection attorneys in the state of the rental, explain your situation and ask for estimates of their contingency amount. In MD its between 25-33%, so it could be much less than 50% suggested above. They'll do the legwork of collecting the balance from the tenant and you'll get your cut if they are successful. You dont have the means to be local for small claims and 7000 would maybe exceed the small claims amount limits. You get the satisfaction without needing your own the boots on the ground.

  • Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    What does your lease say and what does Alabama say about collecting legal fees?

    Did you send your notices within the required timeframe?

    You need to sue them and file the judgment if you are successful.

    Document, document and provide pictures.

    @Nancy Wang

  • Rental Property Investor · Glendale, CA · Member since 2013 · 685 posts · 334 votes
    7y

    Sue —> Judgment —> Collections —> Lien 

    Moral of the story: you won’t recovery a penny and will have to chalk it up as lessons learned. 

    To your success!

  • Professional · Brownstown, MI · Member since 2015 · 28 posts · 16 votes
    7y

    With 40 years experience as a small time landlord, I’ve heard an abundance of stories , true or false, not to pay the rent.

    I’m up front and honest with renters, I tell them before we sign a lease, “if you’re 7 days late on the rent, my Attorney automatically sends you a 7-day notice to Quit.”  They can always pay the rent and fees to stay, or proceed to eviction.

    I forget who taught me this, I thank them, and now I’m sharing their advice with you.

    Only once I pursued a Court money judgment, turned it over to a collection agency, the renter left the State and never collected.

     I moved on, focus on providing a great value for my Tenants, follow the rules, and steadily grow.

    Real estate is business, “we win some, lose some, the name of the game is to win more than we lose”.

    That has been a most helpful quote for me.

    I wish you the best on making things right.  I wish everyone the best on finding that next home-run of a real estate deal:-)

  • Member since 2016 · 13k+ posts · 12k+ votes
    7y

    “we win some, lose some"

    Regrettably all too many new landlords set themselves up to lose. They choose to not operate as a business.

    No good deed ever goes unpunished. All too true in this business where respect is a one way street. Leniency on rent payments is a sure fire path to failure.

  • Real Estate Broker · Temecula, CA · Member since 2014 · 992 posts · 782 votes
    7y

    SOunds like a small claims issue to me.  or send to collections and see what you can get.

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