What are the best of the poor substitutes for a security deposit?
June 7, 2013 8:11 PM Subscribe
What recourse do I have regarding a tenant refusing to pay the last month's rent and possibly damaging the apartment?
My tenant's lease is up at the end of this month. They have stated that they are not paying the last month's rent and that I should instead take their security deposit as the last month's rent. The problem with that is that the security deposit is a security deposit – it's there to cover damages to the apartment.
(The reason they give for not paying the rent is that they can't afford it because they have to pay movers. I think this is likely a lie, as they've talked about how they make a lot of money. Also, I verified the tenant's income when they applied for the place.
However, I didn't see any value in calling them out on that.
I also think this tenant understands the limitations of a landlord's leverage at the end of the lease. A previous landlord call me after the tenant moved in to my apartment because they were owed money. By then, I felt it was too late to pick a different tenant.)
While I think it's quite possible that the apartment will be in OK shape after they move out, but I can't be 100% certain. If it is, then great.
If it isn't, what can I do to collect money for the damages? I am guessing that all I can do is refer her to a collection agency. Or possibly a lawyer?
I have asked the tenant to give me their next address, but I'm not certain that they will. I have the tenant's SSN and phone number. Is that enough for a collection agency to be successful?
And can anyone recommend a collection agency if that is the best way to go?
This is in Cook County, IL. Some Googling indicates the tenant is taking a job in England, which is something they had said was a possibility months earlier. So, remedies may have to involve reaching England.
Is there anything else I should be doing? I don't think there are a ton of options, but maybe I'm missing some hooks I have available here.
My tenant's lease is up at the end of this month. They have stated that they are not paying the last month's rent and that I should instead take their security deposit as the last month's rent. The problem with that is that the security deposit is a security deposit – it's there to cover damages to the apartment.
(The reason they give for not paying the rent is that they can't afford it because they have to pay movers. I think this is likely a lie, as they've talked about how they make a lot of money. Also, I verified the tenant's income when they applied for the place.
However, I didn't see any value in calling them out on that.
I also think this tenant understands the limitations of a landlord's leverage at the end of the lease. A previous landlord call me after the tenant moved in to my apartment because they were owed money. By then, I felt it was too late to pick a different tenant.)
While I think it's quite possible that the apartment will be in OK shape after they move out, but I can't be 100% certain. If it is, then great.
If it isn't, what can I do to collect money for the damages? I am guessing that all I can do is refer her to a collection agency. Or possibly a lawyer?
I have asked the tenant to give me their next address, but I'm not certain that they will. I have the tenant's SSN and phone number. Is that enough for a collection agency to be successful?
And can anyone recommend a collection agency if that is the best way to go?
This is in Cook County, IL. Some Googling indicates the tenant is taking a job in England, which is something they had said was a possibility months earlier. So, remedies may have to involve reaching England.
Is there anything else I should be doing? I don't think there are a ton of options, but maybe I'm missing some hooks I have available here.
This is generally the type of situation a collection agency is for, yea.
I can't recommend any specific ones, but I've seen them be employed in this exact situation several times.
posted by emptythought at 8:43 PM on June 7, 2013 [1 favorite]
I can't recommend any specific ones, but I've seen them be employed in this exact situation several times.
posted by emptythought at 8:43 PM on June 7, 2013 [1 favorite]
Did your lease include the right for you to enter the apartment during the tenancy? If so use that right to inspect it prior to the tenant moving out. Find out if there is a problem to worry about before worrying too much about it.
posted by srboisvert at 8:45 PM on June 7, 2013 [3 favorites]
posted by srboisvert at 8:45 PM on June 7, 2013 [3 favorites]
Is that any clause about what the security deposit can and can't be used for? If not, you should have one in future leases.
For example one of my last leases made it clear that you specifically could not use your deposit for last month's rent, but could dedicate it to carpet cleaning or a small amount of pro-rated rent. Of course a tenant can ignore this, but at least you have something they signed that acknowledges it's not okay to use the security deposit in that way.
Can you inspect the apartment prior to them moving out so that you can determine what measures it may be worth to come after funds?
Then you may have more time to talk to them while they are still in the country. Some collections agencies have very strict areas that they work within. I had a bill that went to collections and they only had jurisdiction in certain states, so you may need to research that as well.
posted by Crystalinne at 8:46 PM on June 7, 2013
For example one of my last leases made it clear that you specifically could not use your deposit for last month's rent, but could dedicate it to carpet cleaning or a small amount of pro-rated rent. Of course a tenant can ignore this, but at least you have something they signed that acknowledges it's not okay to use the security deposit in that way.
Can you inspect the apartment prior to them moving out so that you can determine what measures it may be worth to come after funds?
Then you may have more time to talk to them while they are still in the country. Some collections agencies have very strict areas that they work within. I had a bill that went to collections and they only had jurisdiction in certain states, so you may need to research that as well.
posted by Crystalinne at 8:46 PM on June 7, 2013
Every lease I have ever written or signed explicitly states that security deposits cannot be used in lieu of rent. These were in NY and FL, but I'm pretty sure this is standard verbage.
That said, if they're vacating the country, unless they burn the building down on the way out, any incidental damages are probably not worth the time or money to pursue.
That said, you can use their notice of intent to vacate to show the apartment (with due notice to the tenant) and you can check out the state of things while they're still in the US.
posted by Debaser626 at 8:46 PM on June 7, 2013 [1 favorite]
That said, if they're vacating the country, unless they burn the building down on the way out, any incidental damages are probably not worth the time or money to pursue.
That said, you can use their notice of intent to vacate to show the apartment (with due notice to the tenant) and you can check out the state of things while they're still in the US.
posted by Debaser626 at 8:46 PM on June 7, 2013 [1 favorite]
I think you can reasonably ask them to do a walk through while they are still there and note the condition. State that you expect to receive the empty apartment in this condition in order to extend the courtesy of allowing them to use the deposit to pay their last month's rent. Keep it civil and friendly. Hope for the best, but do plan that you may have to pursue action. Simply ask them for a forwarding address under the guise of "In case any mail arrives for you in the future."
Good luck.
posted by kuppajava at 8:48 PM on June 7, 2013 [1 favorite]
Good luck.
posted by kuppajava at 8:48 PM on June 7, 2013 [1 favorite]
Call them up and tell them that's not acceptable and they must pay you. If they say "but you said it was ok" claim you were confused or whatever. Just keep repeating "no, you must pay your rent on the 1st even if you're moving out. No. Your security deposit is not rent". You don't have to give them a grace period since they told you they don't plan to pay rent, you can begin legal proceedings now. Don't worry about small claims yet, it is down right amazing what a letter from a lawyer can do.
Some people are just ballsy assholes and will try to pull this stuff. Your job, as a landlord, is not to take it.
posted by fshgrl at 9:19 PM on June 7, 2013 [6 favorites]
Some people are just ballsy assholes and will try to pull this stuff. Your job, as a landlord, is not to take it.
posted by fshgrl at 9:19 PM on June 7, 2013 [6 favorites]
Since you know this tenant likes to leave owing money, you should take action now.
This includes reviewing the lease, getting legal advice for your jurisdiction, phoning the tenant and serving written notice to pay late rent, etc., etc..
As a landlord, you should have an attorney you can ask for advice in situations just like this.
You can also call whatever landlord tenant services your city/county/state provides and ask them for advice on how to proceed.
Some jurisdictions have a statute prohibiting the use of deposit as last month's rent. Check your lease and local laws.
How much damage are we talking about $$? How long was the tenancy?
The amount you are potentially out might not really matter if it is wear and tear you can't legally charge for, or sprucing up you should be doing anyway between tenants....
For example, we used to repaint upon vacancy, even if the tenancy was only one year, especially to make the vacant unit more desirable to the types of tenants who don't pull shit like this.
If we're talking under $500 or so in damages as this person moves out, consider it your lesson learned!
Find a resource (like a landlord's association or attorney) that you can rely on for factual advice as you move forward if you plan to continue renting out your property.
posted by jbenben at 9:41 PM on June 7, 2013 [2 favorites]
This includes reviewing the lease, getting legal advice for your jurisdiction, phoning the tenant and serving written notice to pay late rent, etc., etc..
As a landlord, you should have an attorney you can ask for advice in situations just like this.
You can also call whatever landlord tenant services your city/county/state provides and ask them for advice on how to proceed.
Some jurisdictions have a statute prohibiting the use of deposit as last month's rent. Check your lease and local laws.
How much damage are we talking about $$? How long was the tenancy?
The amount you are potentially out might not really matter if it is wear and tear you can't legally charge for, or sprucing up you should be doing anyway between tenants....
For example, we used to repaint upon vacancy, even if the tenancy was only one year, especially to make the vacant unit more desirable to the types of tenants who don't pull shit like this.
If we're talking under $500 or so in damages as this person moves out, consider it your lesson learned!
Find a resource (like a landlord's association or attorney) that you can rely on for factual advice as you move forward if you plan to continue renting out your property.
posted by jbenben at 9:41 PM on June 7, 2013 [2 favorites]
Getting a letter from a lawyer might scare them sufficiently to get then to pay up.
posted by matildatakesovertheworld at 10:16 PM on June 7, 2013 [2 favorites]
posted by matildatakesovertheworld at 10:16 PM on June 7, 2013 [2 favorites]
I would take whatever legal action is allowed now per the lease and your local laws to demand payment of the June rent, which is presumably overdue and past the grace period already. I used to live in complex run by a very bureaucratically Big Property Management company, and if you didn't pay your rent by the 5th, then like clockwork, BAM! on the 6th of the month there was a notice from a lawyer demanding payment of the back rent, late charges, and legal costs within 5 days else eviction proceedings would commence.
Here is some helpful guidance for your jurisdiction.
Now, you may look at that and think, that's a lot of hassle and legal costs and in the worst case scenario you might not get an eviction finalized before the lease is up anyhow. The thing is, the purpose of this gambit is to hope for the best-case scenario, which is where it's a Come-to-Jesus moment for your tenants, that they get scared they might get evicted before the lease is up, or wind up with warrants on them for failure to appear in court, or all that nasty stuff that could happen if they just ignore your demands.
posted by drlith at 5:11 AM on June 8, 2013 [1 favorite]
Here is some helpful guidance for your jurisdiction.
Now, you may look at that and think, that's a lot of hassle and legal costs and in the worst case scenario you might not get an eviction finalized before the lease is up anyhow. The thing is, the purpose of this gambit is to hope for the best-case scenario, which is where it's a Come-to-Jesus moment for your tenants, that they get scared they might get evicted before the lease is up, or wind up with warrants on them for failure to appear in court, or all that nasty stuff that could happen if they just ignore your demands.
posted by drlith at 5:11 AM on June 8, 2013 [1 favorite]
They haven't paid the rent. Start eviction proceedings on the 5th or whenever the lease / jurisdictions allow for as if they had not paid the rent on any other month.
posted by TheAdamist at 6:31 AM on June 8, 2013 [2 favorites]
posted by TheAdamist at 6:31 AM on June 8, 2013 [2 favorites]
Yeah, I live in Cook County, and I've always understood that you can't use your security deposit as last month's rent. I remember looking into it at one point when we had a shady landlord who we knew would fight us about it (and we did eventually have to send him a lot of threatening letters to get our security back), and the answer from the internet was a pretty strong "no." Cook County has pretty strong tenants' rights, but this is not among them.
Also, they can't just "say" they're doing this - they would need your explicit (and probably written) permission. Tell them to pay the rent, or you'll take action accordingly.
posted by goodbyewaffles at 7:33 AM on June 8, 2013 [1 favorite]
Also, they can't just "say" they're doing this - they would need your explicit (and probably written) permission. Tell them to pay the rent, or you'll take action accordingly.
posted by goodbyewaffles at 7:33 AM on June 8, 2013 [1 favorite]
Two-prong approach:
Start the eviction process. Who knows if they actually plan to be out of there in a month...this will get the ball rolling in case they are up to any funny business (or lose their job offer, etc.).
Give whatever notice is required to grant yourself access to the place -- in my city, it's 72-hour posted notice for the landlord to gain entry for non-emergency maintenance, inspections, and so on. Maybe the smoke detectors need to be inspected, hmm? Use this to do a look-see while the tenant is still in place. This will at least give you a sense of what damages, if any, currently exist.
That the tenant's previous landlord went out of their way to contact you to let you know they got hosed by this tenant...that raises an eyebrow. I'd start flexing some muscle.
posted by nacho fries at 10:12 AM on June 8, 2013 [1 favorite]
Start the eviction process. Who knows if they actually plan to be out of there in a month...this will get the ball rolling in case they are up to any funny business (or lose their job offer, etc.).
Give whatever notice is required to grant yourself access to the place -- in my city, it's 72-hour posted notice for the landlord to gain entry for non-emergency maintenance, inspections, and so on. Maybe the smoke detectors need to be inspected, hmm? Use this to do a look-see while the tenant is still in place. This will at least give you a sense of what damages, if any, currently exist.
That the tenant's previous landlord went out of their way to contact you to let you know they got hosed by this tenant...that raises an eyebrow. I'd start flexing some muscle.
posted by nacho fries at 10:12 AM on June 8, 2013 [1 favorite]
I imagine that starting an eviction process, or even a sternly-worded legal-sounding letter might scare them enough into paying.
Also this might just be an expensive lesson in checking out your potential tenants ahead of time.
posted by radioamy at 11:02 AM on June 8, 2013
Also this might just be an expensive lesson in checking out your potential tenants ahead of time.
posted by radioamy at 11:02 AM on June 8, 2013
I am a landlord and everyone who hasn't paid rent by the 8th (or the following Monday) gets a 72 hour eviction notice. What if they don't move out at the end of the month? Then you may have two months unpaid! Or more!
posted by vespabelle at 11:44 AM on June 8, 2013
posted by vespabelle at 11:44 AM on June 8, 2013
My apologies if thus comes out disjointedly. I work in real estate and had a particularly trying week with my residential properties, so my brain is kinda fried.
If you are in Chicago proper, the Residential Landlord Tenant Ordinance (RLTO) is going to be your guide for how to handle the deposit and move out. It does allow you to take the deposit toward past due rent after the tenant has left the unit. You have 30 days from the date they leave to provide an itemized statement of damages, and 45 days to return the deposit (plus interest, less damages). Things may be different if the building is small or owner-occupied.
I agree with the above suggestions of doing a walkthrough before they leave in order to gauge damages now, instead of after they've moved out. Check the notice requirements in your area, provide said notice to the tenants, take photos and extensive notes as needed.
If you are in Chicago proper, I have more references and links on my work PC - including a reference to one or two attorneys that handle residential leases. Feel free to memail me if you think I could be of more help.
posted by youngergirl44 at 12:32 PM on June 8, 2013
If you are in Chicago proper, the Residential Landlord Tenant Ordinance (RLTO) is going to be your guide for how to handle the deposit and move out. It does allow you to take the deposit toward past due rent after the tenant has left the unit. You have 30 days from the date they leave to provide an itemized statement of damages, and 45 days to return the deposit (plus interest, less damages). Things may be different if the building is small or owner-occupied.
I agree with the above suggestions of doing a walkthrough before they leave in order to gauge damages now, instead of after they've moved out. Check the notice requirements in your area, provide said notice to the tenants, take photos and extensive notes as needed.
If you are in Chicago proper, I have more references and links on my work PC - including a reference to one or two attorneys that handle residential leases. Feel free to memail me if you think I could be of more help.
posted by youngergirl44 at 12:32 PM on June 8, 2013
This thread is closed to new comments.
A lot of this depends on the potential amount we're talking about. $100? You'll lose that. $5000? Might be worth a lawyer, but you might spend that much collecting it.
posted by sbutler at 8:37 PM on June 7, 2013