Back rent is such a big problem. A tenant might pay rent late one time and the landlord might accept this as a one-off. It might get more frequent and the landlord better enforce the lease agreement because it can continue to get worse. Suddenly, the rent hasn’t come and the next month’s rent is due. Is it late rent anymore, or just unpaid?
If the landlord continues accepting the rent later and later, then the bill continues to increase and you have a back rent situation. This back rent is very difficult to collect, especially if the landlord has consistently been accommodating the tenant. To some, this seems like a kind thing for a landlord to do, but kindness goes both ways. The property owner pays insurance, mortgage, taxes, and provides a place to live. How kind is it when the tenant fails to pay their end of the agreement?
A better way to handle it would be for the landlord and tenant to talk about why the rent is coming in late and to set up some sort of payment plan, in writing. If they can’t agree, then the tenant will need to move out. If they refuse, then it’s eviction. Suddenly there is unpaid rent and the tenant is gone.
Collecting the Back Rent
- Take it out of the security deposit. This will cover one month’s rent. If there are any damages, that will cut into the deposit. Likely this will not cover the back rent, but it’s a start.
- Talk with the tenant. Perhaps they can pay a percentage. Do the math – would that cost less than getting an attorney?
- If the tenant was evicted, that’s evidence to use later when trying to collect the rent. Put together a list of all the evidence of unpaid rent and get a solid defensible number ready.
- Small claims court is the next step. Depending on the jurisdiction, there is a maximum amount which can be claimed in small claims court. It’s around $10,000. If you claim more, you’ll only be able to recover the maximum. If the tenant owes a lot more, then shame on you for waiting that long to get them out – and you’ll have to sue them outside of small claims.
That’s really all you can do. Always take the time to consider if it’s even worth it to collect. I know you are angry and don’t want to be a pushover. But try to look at it as a business expense. Will recovery make you feel better but cost more than letting it go? Don’t do it. Even if you do get a small claims judgment you might not collect from someone who has no money. Sure, it’ll follow them and if they get money in the future, it might come back to you. But you won’t be able to expect this. You could just take the tax write-off and move on.
