First time problem… I bought a condo in vegas a year ago… hopefully will buy one property per year… I hired a property management company last year… they found a tenant by August 1st. In April the tenant gave notice that she’s moving back to Iowa, vacating on June 10th. In May she sent a letter via attorney fax saying she’s expecting her Deposit (one months rent) since she’s paying the full month of June and we already have the place rented. She’s obviously breaking the lease by a month.
We never had the place rented after she left… she never returned phone calls by the management company to bring perspective tenants by… and… she never did pay June’s rent, she’s moved (June 10th) and back in her hometown.
What should I do?? This is my first real issue with owning a rental. Should I sue her for breaking the lease, get at her credit report?(she’s got great credit)… should i send her a letter giving her a chance… what’s the businessmans approach to this??
You have to remember that real estate is local. The laws here are not the same as there. That is what your management company is for. I would ask them how to handle it and follow suit. In my experience I have found that breaking the lease is addressed in the lease, you may want to read it. It probably states that the deposit is applied first to fees, and repairs and then to back or missed rent which should nicely eat up the whole deposit. Remember the tenant can mail the rent check to you where you are, the management company needs to do something for their money.
I don’t know what it’s like in Vegas, but here in Califiornia I had a similiar situation with tenant breaking a lease and bailing on us. But, our manangement company had received many complaints from her, and she required so many nickel and dime repairs from us, that we ended up just saying good riddance and focused our energy on finding a new tenant (which the management did soon after).
In this state, it seems tenants hold all the cards. We could have gone to court and gotten a judgement against her. Would we have won? Probably. Would we have seen dime one of the money she owed us? Unlikely. We decided it wasn’t worth our trouble just to make a little trouble for her.
Consult your management company and see what they recommend, that’s what you’re paying them for.
Unfortunately, you’re learning as I did. The hard way.
the core question is “is it worth the trouble and time” becuase you are going to have spend time and money. getting a judgement for unpaid rent is realitively easy (regardless of the state), but COLLECTING is a totally different story and on small amts (like 1 or 2 month rent) is very difficult; especially if the person does not live in that county/state any more.
I would send them a letter detailing what is owed and why. Then clearly state that your will file in small claim court in XYZ jurisidiction. That letter is a couple dollar investment in postage and 30 min of your time. You probably got a 1 in 3 chance of getting your money just by the threat of a lawsuit and/or the hassle of showing up in court in another state. Whether you actually go and file is another story.
Your management company should totally handle this, but this is what you do: It’s a deposit disposition.
[b]Mary Ann Simons
123 abc str
Her town, state 76543
Move-out: 6-10-06
Rent to end Lease: $700.00
Carpet clean $125.00 (Extra stains and repairs)
Full Clean: $150.00
Total: $975.00
Deposit on Hand: $500.00
Amount due ABC management: $475.00[/b]
Make sure that you send that to her within 30 days of move-out. She has good credit, so she should not push it. Make sure you have the invoices for the cleaning and damage charges. Charge for damaged mini-blinds, anything beyond reasonable wear and tear.
If she does not pay, then turn her over to a collection company. I have a really good one; they report her to the credit agency, and then go after her. They will collect. You get 60%, they get 40%. (Let me know if would like their info.) You can fax the disposition to her attorney, and I would be surprised if there is one real estate attorney that would take her case. I would ask the management company to fax you their lease. If it does not cover charges for moving out early, its time to change leases.
You don’t even have to go through the trouble of getting a judgment.
Your management company should really do all of this.