Is Litigation a Landlord’s Best Option for Handling Deadbeats?

Spend just a little time browsing a social media group for landlords and you will find no shortage of discussions about how to handle deadbeats. A common topic among landlords is whether or not to pursue civil litigation. In other words, do you bother trying to evict a tenant and then sue for back rent and damages?

Litigation is obviously one option. Whether or not it is the right option almost always depends on the circumstances of the individual case. Landlords also have to consider their own personal convictions. Some believe that litigation is always the way to go because they feel it is the right thing to do. Others never think of it in ethical or moral terms.

The Eviction Question

Long before a landlord ever gets to the point of eviction, they have to understand the potential problems at hand. The risk of tenants not paying monthly rent is ever present. But it doesn’t stop there. Tenants also damage properties. They do things that violate their leases. Landlords have to ask themselves how far they are willing to be pushed before they pursue eviction.

Eviction laws vary from one state to the next. In some states, landlords can get away with eviction fairly cheaply. In other states, it can cost thousands of dollars and require several months to get an eviction through.

Let’s say you were a landlord thinking about evicting a tenant who has just three months left on his lease. You check out the process in your state only to realize that it could take you three months just to get to court. Under such circumstances, eviction hardly seems worth the time, money, and effort. You could just as easily choose to not renew the lease, effectively getting rid of the tenant without having to go through eviction.

The Judgment Question

Above and beyond eviction, landlords have to address the judgment question. A landlord who has already spent thousands of dollars on eviction may then proceed to sue the tenant for back rent and damages. Common sense would dictate a reasonable expectation of getting enough money to not only recover back rent and damages, but also what was spent on eviction.

Then there are cases when eviction is not on the table. Tenants leave of their own volition but still owe back rent on property they have damaged. This sort of thing is more open to civil litigation because the landlord hasn’t already spent thousands of dollars on eviction.

Judgments Go Uncollected

The difficult part of seeking a civil judgment is not winning the case, it is collecting. According to Judgment Collectors, a Salt Lake City debt collection agency, the vast majority of judgments are never paid. This is largely because creditors do not have the time, financial resources, or knowledge to properly pursue deadbeats.

As a landlord, you could spend the money to sue a deadbeat tenant. You could probably win a judgment against the tenant for less than $500. Now you have to collect. Judgment Collectors says your best bet is to not try to collect your judgment on your own. Immediately turn the case over to a collection agency and let them handle it. Otherwise, you might chase the debtor for years and never get a dime from him.

Unfortunately, deadbeats are part of the residential rental business. Landlords always have the option of civil litigation when deadbeats refuse to pay. But that option doesn’t always pay off. Landlords have to look at each case based on its own merits, then decide how to proceed from there. Sometimes litigation works, other times it does not.

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