In addition, if they withhold rent, it has to be placed with the registry of the court where the property is located.

Judicial foreclosure requires a petition to the courts, and a court trial ending in an order by the presiding judge allowing a foreclosure auction to take place.  

Even if you are in the right, what happens if you need to fight it in court?

No eviction protection so since you gave to settle on someone with and low 600s credit score if you have to go to court they get to charge for their time on that. 

You have to know how to screen tenants well, know the landlord tenant code thoroughly, know how to send proper notices, when you can charge late fees, what to do if a tenant doesn't pay etc.I can't tell you how many owners have come to us over the years who thought they could manage on their own and got all the way to court, only to find they didn't follow proper protocol with notices or the late letter etc and have the case thrown out and have to start again.Also, are you local to do inspections? 

Tell them what the courts decided on. 

We re currently in court and have been for a while.

Real estate, by default, is passive and the primary way to avoid the passive loss rules is to qualify as a real estate professional.Full-time employees and non-real estate business owners cannot qualify as a real estate professional (aka REPS status) because one of the tests is to spend more time in real estate than anything else (and it’s unlikely that you can convince the IRS or Tax Court that you spent more time in RE than your day job).

You can also take them to small claims court but you cannot get water from a stone.

This leaves a smaller balance disputed but if you do not pay them anything until its resolved, it could lead to issues if it goes to court.3.