Posted by dealmaker on July 11, 2005 at 18:25:17:
Well I NEVER got any judgements, but my lease said that “tenant agrees that any unpaid rents are to be considered liquidated damages”. It does in fact scare them because they’re probably deadbeats to the IRS as well. If I was doing it wrong the IRS can come get me.
dealmaker
Unpaid rent collections question - Posted by Bert, Tx
Posted by Bert, Tx on July 09, 2005 at 11:29:54:
Hi, can I as a landlord place a lien and thus an unpaid collection account on a credit report against a former tenant for unpaid rent?? I am in Texas.
Thanks
Re: Unpaid rent collections question - Posted by dealmaker
Posted by dealmaker on July 09, 2005 at 12:38:25:
Yes, you can waste as much time, effort and money as you want at JP’s court. I realize this advice is in hindsight but here’s the way I found (through expensively NOT doing it) to avoid this problem. Remember in TX your tenants have ABSOLUTELY NOTHING that you can attach.
Get Social Security numbers on ALL TENANTS at time of application.
Make your security deposit, SUBSTANTIALLY MORE THAN your monthly rent.
Stay on top of rent collections, rent is DUE on the 1st of the month, it is LATE ON THE SECOND, serve appropriate notices.
If you must evict or they voluntarily leave while owing you anything over and above the deposit (unlikely if you do the above) then proceed to number 5.
Send them a notice, with a copy of the FORM 1099 reporting their INCOME TO THE IRS. Point out to them that FOREGIVEN DEBT IS TAXABLE INCOME and that unless they make arrangement to pay their debt to you, YOU WILL BE REPORTING THEM TO THE IRS.
Granted, knowing the government will be getting some (15 maybe) percentage of what you are owed is small consolation, BUT remember most deadbeats are universal deadbeats and they may have other IRS problems and may not want a red flag going to the IRS.
Remember, unlike you the IRS has the following going for it: They never sleep, they NEVER forget and debts to them are NOT DISCHARGEABLE IN BANKRUPTCY.
I have a very high batting average on this program, and for those that don’t pony up my money, well I hope they’re getting hassled by the Feds. Regardless, judgements against these people are WORTHLESS in TX.
dealmaker
Re: Unpaid rent collections question - Posted by Frank Chin
Posted by Frank Chin on July 09, 2005 at 11:48:17:
Bert:
You can get a judgement against them. Then you can go to:
and from there, click the link for “landlord services”, then “report bad tenants”, and you should get this link:
https://www.aoausa.com/SECURE/mrLdebtreportingservice.asp
Good luck.
Frank Chin
Re: Unpaid rent collections question - Posted by Frank Chin
Posted by Frank Chin on July 12, 2005 at 08:25:24:
Dealmaker:
Good points. May I add I now ask for drivers licences, before doing a credit check, and ask them to provide a photo copy for my files when they sign the lease.
You’ll be surprised how many prospects come by and say they left it at home, back in FL, even though I see them driving up. And a few even have names different that that on the application as I always ask them “after they completed” the app. Then they stammer to explain.
As to asking more than one month, besides covering for rent or damages, I find that people who dosen’t flinch when I ask for 1-1/2 months are uaually good credit risks. Those who argue to put it mildly, are not as good in most cases.
So the reaction to the 1-1/2 month deposit is a good indicator of creditworthiness.
One guy asked me point blank when I rented the place a few months ago “why are you asking for 1-1/2 months”?? My reply was “Tenants who pay me 1-1/2 months security never had problem paying rent on time. People that I make exceptions in the past always pay late. I no longer make exceptions, but I just want to hear the reaction when I ask for it”.
Then he asked “you have other applicants”?? My answer "Yes, I have a few, and everyone has no problem paying the 1-1/2 months.
He agreed to it too, but too late, based on my “reaction test”,he failed, and I did not rent to him.
Frank Chin
Re: Unpaid rent collections question - Posted by Rich[FL]
Posted by Rich[FL] on July 11, 2005 at 11:30:33:
I’ve been thinking about using this technique on a tenant I recently had to dump. However, I have a question…Do you have to get a judgement as proof of what a tenant owes before you can claim it on a 1099 and submit to the IRS? Or is this more a scare tactic for the deadbeats?
Rich
Re: Unpaid rent collections question - Posted by Bert, Tx
Posted by Bert, Tx on July 09, 2005 at 15:11:08:
Thanks a ton for the info Dealmaker as well as to Mr. Chin, it is much appreciated
Re: Unpaid rent collections - And then some! - Posted by Stan
Posted by Stan on August 08, 2005 at 13:35:47:
I wish I had known about these resources before I rented to my last tenant. She owes 2 months rent and did considerable damage to the property.
Does anyone know what my first step should be? Do I need to file a police report before making a civil claim? I believe the damages are more than $5000 which would rule out small claims. Combined with past due rent, it’s well over that amount.
I’m in California.