Seeking judgments on a tenant is never a good situation. If a tenant gets behind on rent, we try to work out payment plans. If they can’t keep to the plan, they typically can no longer afford to live at the residence and we start the eviction.
We then offer a cash for keys program (typically $250 and cancellation of all rent owed if the tenant moves out quickly and leaves the home in good condition). Many tenants take this option, but others don’t.
If we have to go through the whole eviction process, the tenant leaves the home a mess, or the tenant leaves in the middle of the night without notifying us, we’ll seek a judgment on that tenant.
In our area, we can seek judgments through the magistrate court after we’ve completely gone through an eviction; however, it costs $75 to do this and you have to do a lot of the leg work yourself.
With us working with low-income tenants, I know that the success rate of ever collecting a judgment is extremely low. So, I want to file judgments mainly to alert future landlords that this tenant will cause issues.
RentRecoveryService.com has a contingency program with no upfront charge and they’ll split half of any amount they can recover. To submit a new judgment, I email them a 2 page form, our rental agreement, credit application, and a breakdown of charges owed. Since all of this information is kept in Google Drive or our property management software Appfolio, it only takes a few minutes to submit a new judgment where they do all of the work in contacting the tenant.
As far as results go, we’ve filed between ten and fifteen judgments. We haven’t collected any money. I know that they call the tenants because we’ve gotten calls from tenants who’ve asked us to stop the collector phone calls (we can’t control that nor do we want to stop) and a couple of tenants have asked to settle. We always point the tenants back to the collection agency if they want to settle although no one has offered us anything.
The worst part of the rental real estate business is having tenants that get to this point and treat your property poorly. However, it doesn’t happen that often and when it does, at least there’s a quick and easy way to place a judgment on that tenant’s credit report to alert future landlords.