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The LPA Newsletter, February 2006

Dear Fellow Landlord,

This month in The LPA Newsletter, I hope you enjoy a Special Report by real estate attorney, William Bronchick, "Collecting Money Owed by a Tenant".
We've put together some new:

  • Landlord Tips
  • the latest Tenant Excuses
  • Also, the latest Quotes!

    Please e-mail us if you have any questions or would like to add or share any material / information. Have a great month.
    John Nuzzolese



    Collecting Money Owed by a Tenant

    by Attorney William Bronchick,

    Did you ever have to evict a tenant for non-payment of rent, then get stiffed for the bill? You may be able to collect what is owed to you, even years later.

    First, you need a court-ordered money judgment. If you filed for an eviction in court, you received a judgment and order of possession. The actual name of this court order may change slightly from state to state, but it's the same thing - a document signed by a judge that permits a local sheriff or constable to forcibly remove the tenants from the property.

    In most states you can also get a money judgment against the tenant, but this requires one of two things: 1) the tenant must have been personally served with the court papers or 2) the tenant must have shown up in court. If the eviction papers (the court papers, not the notice to pay rent) were posted on the door of the unit and/or mailed to the tenant, you generally do not get a money judgment from the court.

    What About Security Deposits?
    If you have a security deposit from the tenant, you can apply that against anything he owes you for back rent or damages. However, you still must comply with state law for notifying the tenant of your intent to keep the deposit.  Even if you return the security deposit, you can still sue the tenant for actual rent owed and/or damages incurred to the unit.

    If the tenant left before the court date or you did not otherwise get a money judgment, you can always sue the tenant in your local small claims court for money owed and any damages to the property.  The process is quite simple, and does not require a lawyer.  You have to file the claim before the end of the statute of limitations, which generally ranges from three to six years, depending on which state you live in.

    Once you have a money judgment, you can collect it against all non-exempt assets of the debtor.  Certain assets, such as retirement accounts, are exempt from collection by creditors.  Also, keep in mind that assets of the debtor's spouse may be attached as well in states that recognize community property (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin).

    Cash in bank accounts is the easiest target.  If you have a copy of a recent check from your tenant, you can file for a "levy of execution" on their bank accounts through the local sheriff (this is why it is a good practice to make copies of your tenants' checks each month to make sure you know where they are banking).

    If the tenant is working, you can garnish wages, but most states limit garnishment to 25% of the wages of the debtor.  Still, if they have a steady paycheck, you will get your money back, plus interest.  If you get a transcript and record the judgment in county records, the tenant will not be able to buy a house in that county without paying you off.  If the tenant owns other real estate in his name (not likely, but always possible), the judgment will create a lien on that property as well.

    If you do not know where the tenants assets are located, you can start a debtor proceeding in court to make him appear in court and answer questions regarding his assets.  Failure to comply may result in a warrant issued for the debtor's arrest.  Depending on the amount of money owed and likelihood of collecting, this process may not be worth your effort.  But, considering a judgment may be valid for as long as 10 years and you get interest on your money, why not make it a part of your business practice?

    Read more articles by William Bronchick at

    Printer Friendly Version of this Article


    Landlord Tips

    • With new tenants be ready to enforce late charges the first time your tenant pays late. If you set a precident of waiving your late charge, tenants will be offended when you want to enforce your policies in the future.- Bonnie K., NY
    • I have been able to eliminate a few disasters by making a reason to visit the rental applicant at their curent home before signing a lease with them. I get the opportunity to view how they live. - J.N., Naples, FL
    • DO NOT turn over possession (keys) to the tenant unless all funds have been paid in cash or checks have cleared. The worst thing is to have tenants in control of your property and not paying the rent when they couldn't even raise the security and rent money to move in. John N., NY


      Tenant Excuses

      Excuse of the Day for 2/9/06:

      "I'm sorry but there is something wrong with 'my check' and I didn't receive it yet. I will check to see what is wrong and get back to you........"

      - J Warburton, Newburgh, NY

      Excuse of the Day for 2/7/06:

      "I'm sorry but I was arrested last week and lost my job. Can we work something out?"

      What were you arrested for? Identity theft. Nice. - J Warburton, Newburgh, NY

      Excuse of the Day for 2/6/06:

      "Someone broke into my apartment last week and stole all my money and my jewelry. I'm sorry but your are going to have to evict me. I can't pay my rent."

      PS: no request to do repairs was ever made or reported until rent was due - J Warburton, Newburgh, NY

      Excuse of the Day for 2/5/06:

      "I'm trying to build my credit rating - so I had to pay my credit cards and my car loan first."

      I am looking into reporting tenants to the credit bureau. - Thomas C., CA

      Excuse of the Day for 2/1/06:

      "Can I skip this month? Things are tight and my boss said I can take some time off to relax."

      At first, I laughed because I really thought she was kidding... Nope. She's for real and so is my Urgent Late Notice and Late fee! - Ricky D., CA

      Excuse of the Day for 01/25/06:

      "I brought my car in for an inspection and it failed the test. I had to pay $900. to get my car fixed."

      The rent can not be dependant on your car repairs, I told her. She will still have to pay the rent and the late fee. I agreed to give her 7 days extra to come up with everything befor i have to start legal action. - Michael K., Newport, RI



      eleanor roosevelt quotes Yogi Berra quotes Thomas Edison quotes Benjamin Franklin success quotes

      "Do what you feel in your heart to be right - for you'll be criticized anyway. You'll be damned if you do, and damned if you don't." - Eleanor Roosevelt

      "An ignorant person is one who doesn't know what you have just found out." - Will Rogers

      "In the arena of human life the honours and rewards fall to those who show their good qualities." - Aristotle

      "I have left orders to be awakened at any time in case of national emergency, even if I'm in a cabinet meeting." - Ronald Reagan

      "I trust that everything happens for a reason, even when we're not wise enough to see it." - Oprah Winfrey

      "If you keep facing the sun, the shadows fall behind you." - Jennifer Tucker

      A Way of Being
      - Gary Link, Attorney at Law

      "How much did your last tenant problem cost you?"
      - John Nuzzolese

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