Collecting Back Rent after an Eviction
Maggie is a landlord facing her first eviction. She asks, “My tenant owes me four months’ rent. Can I sue for the back rent once the eviction is finished?”
First, it’s not a good thing when a tenant goes that long without paying rent. The more serious landlords we know post a “pay or quit” notice on the very first day the rent is late. Others wait longer, hoping the tenant will come up with the full amount. But four months? It must have been tough to get that tenant out of the rental unit.
Whether a tenant owes four days’ or four months’ rent, is it possible to collect any of it once you go to the eviction process?
That depends a lot on where you live. Suing in small claims court can be worth the effort in some areas; in others, the odds are against the landlord ever collecting—even after winning the claim. Why?
1. If the tenant isn’t paying rent, they probably don’t have any money to pay a claim, either.
2. Collecting debts can be a full-time job, which is why there are professional collection agencies. You could certainly hire one, but they might not be any more successful than you. And if they are, they will take a cut of your money.
3. See if you can hire a service to send a letter to the tenant stating if the rent is not paid, they will be turned over to a collections agency. These services usually charge a fairly low, one-time fee. Whether or not the money is collected, a mark will go on the tenant’s credit report.
4. Check with a tax professional about whether or not the lost claim can be considered a tax write-off.
5. Depending on the amount of money owed, a collection agency might be the best idea. Check the terms and conditions carefully, and understand completely whether you pay for non-collection and what percentage of the recovered sum you will actually see.
Ask your fellow landlords about their experience collecting back rent in your area.