Did your tenant skip out owing you rent? Did they cause so much damage to your unit that it cost thousands to repair? Were you so relieved to finally get rid of them that you wrote off the debt as bad luck? Did you evict a tenant, get a money judgment and just put it in a drawer deeming it worthless?
If you answered yes to any of the above questions, AOA has a service for you! It’s almost year end and time for you to pull out those judgments and take action. Taking a few minutes to report these debts may just put that money back in your pocket or save a fellow landlord from renting to that nightmare of a tenant.
Hold Your Tenants Accountable
There are many “professional tenants” out there just waiting for the unsuspecting, trusting landlord who doesn’t perform due diligence by requesting credit, eviction and criminal reports. And even if you do request reports, they send silent words of thanks to their prior landlords who never reported them to credit bureaus.
Some turnover costs are a part of our business, however, damages to your unit by the tenant and rent owed to you are not! Any damages above wear and tear beyond your security deposit are due to you and you have the right to demand them, just be sure to have all receipts to prove the debt. As a professional landlord, you should never write off monies owed to you or allow that tenant the luxury of no consequences.
By not reporting problem tenants, you are doing your fellow colleagues a disservice as someone else is sure to get stuck with them when they read credit reports that don’t reflect the tenant’s debt to you.
Tenants need to be made aware that there will be consequences and they will be held accountable for their actions. When tenants know this in advance, wegreatly increase the chances that they will not become a problem tenant and repeat offender. Let them know you mean business! Inform them that it is your policy to notify local and national credit bureaus of any negative performance. Any unpaid rent or monetary damages to the apartment will be put on their credit reports and made available to potential employers, banks, landlords, mortgage companies, car dealerships or any other company they may want to do business with in the future. Let them know that the reputation they establish with you will follow them for many years.
Problem tenants, who are not held accountable for their actions and “get away” with breakingleases, causing damage and living rent-free in your unit most likely, become repeat offenders – unless there is a price to pay. Only you can set that price!
What Can You Do?
Start out by reporting prior tenants who owe you money to AOA’s debt reporting service – Rental Owners Collection Agency (ROCA). We will help to collect the money owed you if:
- Your tenant has already moved out, left damages that exceeded their security deposit or owe you unpaid rent
- You received a money judgment from an eviction.
Having a money judgment is always best because the former tenant cannot dispute it, however, if you don’t have one ….AOA can still help!
How ROCA Works
AOA’s Rental Owners Collection Agency should be used as your first attempt in collecting a debt from a prior tenant as long as the debt is less than four years old. We want the tenant to own up and pay you 100% of the money due you. For a low-cost, one-time flat fee of $11.95 per person reported, AOA will:
- Send a collection letter on your behalf to your former tenant giving them a period of time to pay you directly 100% of the money they owe you.
- In that letter, we inform them that a negative credit reflecting on their credit report will be submitted to national credit reporting agencies if they fail to pay.
- If they don’t pay the debt, or dispute it within 30 days, as part of the service, we will report them to TransUnion and Experian so the collection becomes a permanent part of those two credit reports for future landlords to see. The only way for them to remove these lines from their reports is satisfy the judgment by paying you!
It’s Easy to Report
AOA members can easily report their debts one of the following ways:
- Go to AOA’s web site at www.aoausa.com and log in to the “members only” area and complete the form under the Report Debtors tab or
- Complete the form locatedin the free form section of the AOA web site www.aoausa.com and mail it with $11.95 for each person reported to AOA at 6445 Sepulveda Blvd., Suite 301,Van Nuys,CA 91411.
Should it be necessary for you to take further action, here are five tips from Mr. Landlord to help:
- “You CAN run the credit report of former tenants (who owe you money) every six months to get possible updated information. [Perhaps your former tenant has a new job listed on the credit report and you can attach their wages.]
- You SHOULD record the judgment, usually in abstract form at your local recorder’s office (deeds, weddings, etc). [File an abstract of judgment in your Sheriff’s office and when they apply for credit to possibly finance a home, you MUST be paid off before they can do so!]
- You CAN order the court or judge to order an examination of their assets. (They raise their hand and swear in front of the judge, and then you take them into a side room and ask them questions on their debts AND assets).
- You SHOULD file a wage garnishment if they are employed. [The employer has no choice but to deduct from their wages and send you a check!]
- Plus, recording the judgment if they have real estate will SURVIVE a bankruptcy as the judgment is recorded as a secured judgment and if or when their property is sold or refinanced, your judgment will get paid off.”
Make a Commitment
Make the commitment to yourself and other fellow landlords to report your bad tenant debts to AOA as soon as they have moved out! If we all work together, we can lower the chances that someone will get stuck with your bad tenant or you will get stuck with theirs.
Now … go pull out every Security Deposit Refund letter you have mailed where the tenant owes you money and every money judgment you currently have stuffed in your files that are not more than four years old. Fill out the debt reporting forms and send them in to AOA today! Doing so will increase your chances of them collecting more than just dust!
Patricia A. Harris is Senior Editor of the Apartment Owners News & Buyers Guide. This article is a general guide and has no legal representation. It is suggested that you contact an attorney for legal advice should the need present itself.