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How to Collect what a Tenant Owes you

Posted by taylor on November 8th, 2016

When talking about collection, there are two need to know rules:

1.  The best way to get nothing is to do nothing

A lot of landlords have tenants who owe them money, but they don’t do anything about it because they don’t think they will get anything. But the best way to ensure that is to not do anything. Everyone who owes you money needs to be put into you pipe line, and turned over to a collection attorney / service.

2. You can’t get blood form turnips, so don’t rent to turnips

Turnips or individuals who already owe other landlords money, who have never held a stable job. So if you end up renting to them you are already at the back of the line in the collection process.


Have a solid screening process. This includes having a good rental application that includes previous addresses, job references, among other things to get as much information on the tenant as you can. You also need to do a thorough background report. And the biggest step to be successful at collection is to use a good lease. You’ve got to have the right language in your lease, that is Utah and collection specific.


Run the numbers. When running the numbers the first thing to do is determine the damages. Find out exactly how much damage was done, either to the actual property, or to the contract or your time. When looking at these damages you’re looking for a dollar amount to represent the compensation you deserve. Once you have that number, send a deposit disposition within 30 days of them leaving. Account for all the damage, deduct it from their deposit, and let them know a. how much they owe you still or b. how much they are receiving back. Once this is complete the final step is to select a collection company, either a collection attorney or collection service company.


Be Patient. As the tenant recovers, and gets back on their feet, they’re not going to pay right away. Most of the time the tenant is in a downward spiral and it will take them a little while to get back to a spot where they can pay you. So have patience, the average collection takes about 3 years. Even after that only around 50% is ever recovered. But it is crucial to start the pipeline now, otherwise you delay getting part of what is owed to you back.



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