Tenant Behind on Rent, lease up in a month. Best action to take?

Question

Hi everyone,

We have a property in Pittsburgh, PA (we are in California) where the tenant hasn't paid their rent for a couple of months. They have been good tenants up until recent medical issues and have fallen behind. We have been working with them and they have been paying some of what they owe back. However, they still owe about 2 month's rent (currently). Their lease is up end of June. Does it make sense to take action on eviction process now? And I am researching small claims court, would you advise to start that process now or after they leave my property?

Thanks in advance for your advise!

Kyle J. · Answer

There’s two parts to small claims and both are equally important: 1) winning a judgment, and 2) collecting on a judgment.

You’ll have to research what are the legal methods for collecting on a judgment in the jurisdiction where you’d file the small claims case and evaluate your chances of collecting via those methods. I’ve collected thousands of dollars via small claims and the wage garnishment process, but if your tenants don’t work or that method isn’t available to you in that jurisdiction, then you’ll have to find another method that can work for you.

As for your tax question, you don’t claim a loss on your taxes for the money you never collected since you never reported it as income in the first place.

Kyle J. · Answer

I would just start the eviction process now to regain possession and get them out since they’re not paying. I wouldn’t start the small claims process yet. I’d wait to do that after they’re out and you have a final accounting of how much they end up owing you.

Kyle J. · Answer

Start the process now. You should have already started it, but don’t wait any longer. You don’t know if they’ll actually leave in June or not. If they don’t, and you continue to wait, you’ll be even further behind.

Michael Noto · Answer

Start the eviction now becuase if they really have no money to pay you then they probably won't leave at the end of the lease term because they do not have the money for the deposit/first months rent at another place.

On the other hand, if you start an eviciton with the notice to quit and they do have money and care about an eviction impacting their rental prospects down the road they will pay you what they owe you and move on.

Account Closed · Answer

If you have decided that they aren't staying it wouldn't matter. However, if they truly are having medical issues and it is short term, then keeping them and not having a vacancy may make sense. Be careful tho' I once had a tenant tell me they were having medical issues and it proved to be not true. Trust but verify.

Account Closed · Answer

Have you verified their "medical issues"? Bills from doctors, conversation with the billing department etc?

Jake Kinoshita · Answer

@Anne Whalen

That is very tough. You are a nice landlord. My case was different so I charged the late fee and collected the remaining amount.

But you can't just let the tenant stay there for good without paying the rent.... I recommend you to talk to a lawyer and file things properly already as everybody says.  You have been generous so your tenant may understand the situation. If you try to fight, they may fight back for no reasons.. Maybe you can be nice and have an agreement that they will pay you even later so that you can at least cover your loss?

Good luck.

Scott P. · Answer

I'm sorry to hear you're in this situation.  If this was happening to me, I would assume that I'm not going to ever get the full rent owed.  To recover it after a judgement I'd have to garnish and hope they didn't leave the State.  I probably would not go to that trouble.

I'd need more info to know exactly what I'd do.  For example, if they had rented from me with no problems for 5 years I'd probably advertise the place for rent asap and help these tenants by forgiving the rent owed if they "cleaned up very well" and moved out in 30 days, but I would have told them that the first week they were late.   In my State they'd likely get 2 months free by the time I could evict and the deposit would cover 1 of those 2.

Knowing only what I know so far, I would do what @Michael Noto posted.

Patrick O'Shea · Answer

@Anne Whalen I bought a building this year and inherited a tenant with two months left on the lease and had trouble paying rent.

My property manager prioritized two things. First, giving at least 30 notice the lease would not continue month to month after it is ended. If she stayed she'd hurt her credit and have trouble renting anywhere in the future. Facing that scenario, she left at the end of the lease and I kept the deposit to cover lost rent.

It also freed up the unit to be renovated and find a tenant who could afford it easier. IMO - win/win/win

Hubert Kim · Answer

If you are physically in CA and the property is in PA, do you have someone or a company that will represent your interests?

I do not know how PA works, but in CA the eviction process requires a complex series of steps. First, a properly served Notice to Pay or Quit. If payment in full is not received, then you file an unlawful detainer with the local court and documents must again be properly served to the tenant. If the tenant does not respond, you may file for a default judgement that will allow you to take possession in the appropriate method. If the tenant responds and does not vacate, then a court date is scheduled.

Once the entire process is complete, and assuming you receive a court judgment for money, you are responsible for collecting on it.

Small claims may be appropriate if the tenant vacates with past due rent. You first send a demand letter with instructions on payment. If you do not receive payment, then you would file a claim in the appropriate court and properly serve documents to the tenant. Once served, a court date can be set. Again, if you receive a court judgement, you are responsible for collection.

Tenant Behind on Rent, lease up in a month. Best action to take?

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