Hey everybody. Matthew Whitaker back here with another Questions Owners Ask. Today's question is, what do I do if a resident leaves owing me a balance? As a rental property owner, collecting unpaid rent from former residents is an incredibly burdensome task. Whatever the reason the resident is no longer living in your property, once they have moved out, it is likely their interest in paying you will quickly diminish. So what steps can you take as a landlord to collect the money you are rightfully owed? Let’s take a closer look.
Article at a Glance:
Tracking down a previous resident to pay you owed money is never an easy task. Thankfully, landlords have legal remedies that protect them in these circumstances. Here are a few different tactics to getting your money:
- Withhold deposits
- Sue them in civil court
- Obtain a judgment
- Request a levy of execution
- Seize other assets
- Garnish their wages
What to Do If a Resident Leaves Owing You Money
Whatever the reason may be behind a resident moving out if they owe you money, you are likely in a sticky situation. Whether or not you had to evict him or her, at the end of the day, if they leave owing you a balance, they owe you money.Thankfully, you have legal rights as a rental property owner. Here are a few different steps you can follow when determining how to get your money.
Withhold Deposits
One of the simplest ways to get the money you are owed, whether due to property damages, unpaid rent, or eviction costs, is by withholding money from the former resident’s deposits. Technically, this money is legally allowable money.When you write your rental agreements, be sure to write out the details of any security, cleaning, and any other deposits. That way, once the resident vacates, as long as you comply with the state regulation regarding holding of the funds and listing the costs of repairs, you are in the clear.You can detail an extensive list of costs associated with back rent, excessive cleaning, or any repairs in your rental property. Send this back with whatever remaining balance the resident might have.
Sue Them in Civil Court
Unfortunately, if the deposits don’t cover the damages or if you have already returned this money to your previous resident, things might be a bit trickier for you. Not to worry, you still have legal protections on your side.You can file a suit with the court clerk and pay the appropriate filing fee. Not only can you ask for the money owed, but you can include any costs associated with the suit as well. Be sure to provide any personal information you may have about the resident, including:
- Last known address
- Last known phone number
- Place of employment
The more details you can provide, the better. This is another reason why you want to make sure you thoroughly vet your applicants in the first place. You’ll never know when all of this information will come in handy.
Obtain a Judgment
On your hearing date, you will present your side of the story to the judge. You’ll want to bring with you as much evidence as you can get your hands on, including:
- Proof of signed lease agreements
- Photos or videos of damages
- Any other information about your case
Should the judge agree with you, they will order a judgment ordering the former resident to pay you the amount owed as you have detailed in the suit. Depending on your local laws, the resident may have the option to pay you at that moment or a later date.
Request a Levy of Execution
Once you’ve received the judgment, you can take it to the court clerk to request a levy of execution against the resident’s assets if they do not pay in a reasonable amount of time. During your application process, you should have requested a blank check from your previous resident. Use this information to target their bank account during this process.You can give their bank information to the court clerk with a request to have a sheriff serve an account levy of execution order on the bank. If this request is granted, the account will be frozen and a judgment sent to you. If the resident does not have enough money to cover the debts, the bank must empty the funds and give them to you.If you are still missing funds, you can file a new levy for the future on the account, so long as the previous resident does not close out the account entirely.
Seize Other Assets
If the bank information is no longer valid or you did not obtain bank information during the application process, there are still other methods of collecting funds. You can file a levy execution against the resident’s other assets. For example, if the resident owns their vehicle outright, you can order for it to be seized and turned over to cover the judgment.During this process, any seized assets must be equal to or less than the judgment amount. Otherwise, you will have to sell the asset and give the resident the remaining balance owed from the sale.
Garnish Their Wages
You can opt to garnish wages in most states but are limited to collecting 25% of the previous resident’s paycheck until your judgment amount has been reached. If the resident quits the job or there is a court order stopping the garnishment, you might not receive all of your money.In these situations, you can file the request with the court and provide all of the information you have available about the former resident and their current employment status.
Wrap Up
As frustrating as a process collecting unpaid rent from former residents can be, it’s good to know that as a property owner, you have legal protections on your side. By following these different steps, you can ensure that you are rightfully paid the money you are due. And, hopefully, you will not have to deal with a situation like this again in the future.
