Collecting back rent owed on evicted tenants

I have a big problem with letting my tenants go without paying rent for what is going on 4 months. This is my first investment property (Brighton, CO) and the 2nd set of tenants I deal with. I have only myself to blame for trying to be the nice guy and letting it go this far and have learned a hard lesson. To make a long story short I was a softy for a pity story about breast cancer. The unit rents for $1275 a month and late fees are $25 a day. At first I told them they would not have to worry about late fees if they got me all of their money which was another huge mistake on my part. Anyway, today they are getting served an eviction notice and will be out in 30 days. They currently owe me $5100 reg. rent plus $2500 late fees and bounced checks. My lease does state that the tenant is responsible for all legal and collection fees if they are in default so I’m not worried about that.

What is the best way to collect my money?
Do I use an attorney and sue?
Do I use a collections agency?
Is there a way I can have their wages garnished from their paychecks and tax returns?

Get them out first. You aren’t doing anything until they are gone and then, you need a judgment before you can collect anything.

I would drop the late fees. Your policy might anger the judge enough to award possession only.

I don’t understand how this policy would upset a judge. The daily late fees are only 2% of the monthly rent and is it not normal practice to have in the lease for the tenant to be responsible for legal and collection fees. I am actually giving the tenant the option to pay me $500 a month without charging any late fees.

Your late fees come to almost half the amount of rent owed and you are charging 2%/day, which probably borders on the usury laws for your state. You might get away with a $25 late fee or $1-2 per day.

To put it another way, your daily late fee rate is 730% APR. Legal and collection fees are different from late fees.

In others words, you need to learn about your state’s landlord-tenant laws FAST.

Again, state laws vary, but generally speaking, civil court (eviction court) has a dollar limit on it, $5K in NC, for example. If same in yours, then the max that you can sue for without going to a higher court (bad idea) is $5K, so you’d lose $100 off the top.

Also, most courts will NOT award late penalty charges anyway, so trying to include them is probably not going to work. Sometimes, people try to “hide” late fees into the rent price. Bad idea if the judge catches on to it.

And late fees generally have a cap on them per state laws. NC, for example is $25 or 5% of the rent, whichever is greater. That’s the cap, per month, that you can charge. Anything else is usury. Of course, charging 730% APR is usury in EVERY state, so I’d suggest that you leave that one out.

And again, state laws and all, but MOST states require that the person must be physically served papers for them to have a judgement levied against them, whereas papers only have to be posted in order to evict. If you don’t specify, then in all likelihood, eviction papers will simply be posted and you’ll have to refile in order to levy a judgement.

Finally, where you live will again greatly determine your ability, or chance, to actually collect on a judgement that you have against someone. If you have a judgement, you can send it to a collection agency to handle, usually for about 50% of whatever they collect. Some states allow garnishment. Others don’t. The laws concerning how, what, and how much you can garnish are too varied to discuss in general.


Raj is right. Get them out! Get a judgment against them for back rent and any lost rent while the house is vacant (if they are still under a lease). Late charges are usually thrown out but you may have a chance if your request is reasonable and the judge likes you. Judgment collection varies by state, but you can usually seize assets if they have extra cars, boats, etc., and can sometimes garnish wages, especially if you have their bank account info. Check on the rules of engagement in your state. By the way, I have a boat for sale from a past tenant if anybody needs one :slight_smile:

Thanks for all of the helpful info. I really just want the money they owe me. The late fees don’t really matter anymore. They want to re-pay me over time and I don’t mind doing this as long as the timeframe is reasonable and they actually pay. I gave them an incentive of not paying any late fees or legal fees if they can do this.

I have another question about statute of limitations. If they pay something like $350 a month or whatever amount, that would take them 15 months to re-pay me. But what if something happens and they decide to stop paying me. When would it be too late to get a judgement? After 12 months? This is in the state of CO.

Again, check your state laws concerning such. Best thing that you can do is learn the laws!

That said, if they are willing to make a payment on the amount owed, then quickly do a promissary note with them for the amount owed. If they are willing to sign that, then you may very well be able to add in all the fees you want plus collect interest on the debt as well.

By signing a note with you for the amount, it pulls it away from the rental and becomes a personal note. If they don’t pay that, then you can go to court for non-payment of the note. Check with your attorney to view your options.