01 May How to Handle Unpaid Rent and Damages
A security deposit is a good step in protecting yourself in case of unpaid rent or damages to the property when a tenant moves out. But if you plan on keeping the whole deposit or a part of the deposit there are certain steps you have to take.
Inform Your Tenant
When a tenant moves out and leaves the property with damage you need to have repaired, you have to tell your tenant why and how much of the deposit you are taking. A letter with a detailed list of the damages and charges is needed. If the damages exceed the deposit that you have, a letter of demand must be sent as well. These letters have to be sent in a timely manner that meets your state’s laws or the tenant doesn’t have an obligation to pay. If you send a letter and don’t get a response you can send a second letter, attaching the first letter. If you still have not received payment or heard back, you will have to assess whether or not it is worth it to go to small claims court.
Determine Next Steps
While going to small claims court could be beneficial there are pros and cons that you will have to consider to determine if the good outweighs the bad. Here is a list of some things to think about when considering small claims court. Do you have enough evidence to prove your case? The time it takes personally to prepare your case, go to court and all the in-between could end up costing you more than the charges you are going for. Is it worth it? Another thing to take into consideration is the past tenant’s situation. If they are broke or unemployed, you could win the judgment but they wouldn’t have to pay. Lastly, you could end up in a countersuit. It is a case by case situation and you will have to consider all these things when deciding if you will go.
Have Proper Preventative Measures in Place
The best way to avoid unpaid rent and extensive damages to the house are to put things in place to prevent an issue before one arises. Here are a few tips to preventing unpaid dues and major damages:
- Do an inspection before move-in and move- out inspections and take good notes of the condition of the house. This will also add to your evidence if something does arise.
- Do periodic inspections throughout the lease. This ensures that tenants are not causing damage, have unaccounted pets or people, etc. If you notice an issue, it is easier to address it with a current tenant or nip it in the bud.
- Screen tenants. It is easy to see the type of tenant someone is by their rental history and references. Good references from past landlords is a great way to ensure a good tenant.
