OLD TENANT DEBT: Are you leaving money in your file drawer?
Our collection guru Bill Gray has some advice for you: If you have old, uncollected rent files, you may be sitting on a wad of cash.
“A lot of landlords just give up when the tenant skips and they can’t find a new address — they think that if they didn’t collect the unpaid rent right away, it’s a lost cause.
“But that’s not the case. Old tenant debt can be an untapped source of cash.”
Even if the tenant didn’t have the ability to pay when he skipped on the rent, it might be worth pursuing him now that some time has gone by. He may have reestablished himself – he might have a new job, a bank account, and assets he doesn’t want to lose. “Often, delinquent tenants think they’ve beat the wrap after a year or so goes by,” Bill explains. “They’re surprised to learn the problem hasn’t just gone away. You can use that to your advantage to collect the old debt.”
The exact amount of time you have to collect a debt depends on the law of the state where the rental property is. “You might be surprised to learn the statute of limitations for debt in your state — it may be longer than you realize,” Bill explains. “Many states have landlord-friendly rules for collecting unpaid rent – some give you as long as ten years to collect.”
It’s easy to find out if your old debt is still collectible. “It doesn’t take much time, just ten minutes or so to copy your file and send it out.”
Find out how far back you can collect in your state by emailing AAOA at [email protected] Please type “collections” in the subject line.
Read Bill Gray’s feature blogs, Seven Vital Tips to Help Collect Tenant Debt.
Check back next week to find out how you may collect your own debt and save a bundle on collection fees.
American Apartment Owners Association offers discounts on products and services related to your commercial housing investment, including tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.