Are you certain your old tenant wont pay his or her bill?
Landlords tell me several times a week there is no way their previous tenant will ever pay what they owe. As I said in a previous post, if you have a crystal ball that tells you he wont pay you what he owes, why didnt you use that magical crystal ball before he became a tenant?
The truth is nobody knows whether the balance will be paid or not. The one way you can make sure not to get paid is by putting his file in the drawer and leaving it there.
Think about it. Your tenant moved out with the knowledge that you were owed money. The renter might not have known how much, but most likely understood it was some amount. After moving, the former tenant either hoped you would not go after the debt, or did not think you could.
If your charges are reasonable, you are more likely to receive payment. Why? Because the tenant knows that his or her dog destroyed the bedroom carpet. If you charge a reasonable amount to replace the carpet, the renter is much more likely to pay. If you ask too much, the tenant will just forget it. Avoid the temptation to gouge a former renter. It will do you no good. Trust me; I have seen it thousands of times.
As a landlord, you have no idea of the renters complete financial and personal situation. Is the persons father wealthy enough to provide a bail-out? Next year will the renter land a great job and decide to clean up his or her credit? Will the renter marry money? Will he or she attempt to get a mortgage and need squeaky clean credit to do so? If that person does try to get a mortgage, he or she will be begging you to resolve the debt.
If you have a signed lease and can substantiate your charges with documentation, you may pursue the debt as a collection account for up to seven years. Usually this can be extended to ten years if you have a judgment. This is a long time for your tenant to live with your collection account negatively affecting his or her credit!
If you do nothing else, report the debt to Experian, Equifax, and TransUnion. It can be done in minutes and costs less than lunch. I seldom gamble, but this is a no brainer of a bet. It may take some time to pay off, but a small investment could possibly pay big!
Send me a note with your tenant debt concern. I can help. [email protected].
Copyright 2009 Bill Gray
Visit Bill Gray’s blog at TheLandlordDoctor.com.
See our seven part series, Vital Tips to Increase Your Debt Collection.
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