How You Can Collect Monies from Former Tenants

Welfare reform and the booming economy may mean rental property
owners and managers can collect monies from former tenants ....

Now that the economy is good and unemployment is at an all time
low, rental property owners should dust off those files previously though of as "uncollectible" or "judgment proof." Yes, there is gold in reviewing files of past residents who left owing you monies for
unpaid rent or repairs and damages and finding them is getting easier.

If you already have a judgment -- from an eviction or security deposit dispute-check to see how long it is good in your state. If you never recorded an "Abstract of Judgment" or got the "Writ of Possession," check with the court clerk and get a copy of the judgment and record it making sure that you include the Defendant's social security number
on the paperwork that is being recorded.

If you never got the judgment, check to determine the "statute of limitations" on that type of debt. If you can "prove" (meaning convince the judge you are owed the money) the amount of rent owing or the damages with pictures, affidavits and testimony from repair
personnel, then you first have to try to locate your former tenant and do some detective work on their present job opportunities.
If you already have the judgment, you will want to do this homework in preparation of getting a garnishment of their wages or assets.

How do you find former tenants? First, use the information on their applications. Call the employer they listed and ask if they still work
there. If not, ask if there is a forwarding phone number. Be sure to get the full name of the company and address if they are still employed.

With their social security numbers, you can re-pull the Tenant's credit report. New addresses and sometimes the person's present employment can be listed.

Use the "personal references" and "emergency contacts" also listed on the
application form and call in the evening and politely ask if they will give you "Ms. Brown's new telephone number." They may have it and give it to you. Be careful that you do not misrepresent your intentions, and you cannot
harass anyone in attempting to get information or collect your debt.

Once you use up the sources on the application, "Go Postal!" You can send a letter to their last known address and write "Address Forwarding Correction -
Do Not Forward" on the outside of the Envelope. Put your return address on the envelope and the post office will send your letter back with the new address on the envelope.

You can also .... Check Internet web white pages and e-mail address with various search engines. You can use
http://www.whowhere.lycos.com/Phone
or http://www.infospace.com/ You will be surprised at the people you can locate.

If they have returned to college, you can track them down through the alumni directory or the UT Austin Web Central @ http://www.utexas.edu/world/unit/ has links
to the Web sites of nearly every U.S. college and university.

Next, let your fingers do the walking and if you know the county where the person used to live, you can call the court courthouse and ask if your ex-tenant holds property in that county, if they are registered to vote or if they were married in that county. Finding if they may have married is especially helpful if you are trying to find a woman who may have changed
her name through marriage.

Once you find they are in the county, check with the water, garbage collector, power or cable companies. These utilities often require deposits and forward them to a new address when someone moves. Some will cooperate and give this information out over the telephone.

Once you have located them and know that they are employed, then you need to file suit, obtain a judgment and then you can garnish their wages, bank account and other assets. Wage garnishment allows you to collect a certain percentage of the judgment-debtors' net salary unit the judgment is paid off. This process is available in every state except TX, NC, SC and PA.

The necessary garnishment paperwork can be obtained from the local court or sometime the sheriff's office. Once the paperwork is completed and delivered to the sheriff, they then serve the employer who will take out money from the debtor's paycheck and send the money either directly to you, the creditor or, in most cases, to the sheriff's office who will then remit it to you. There can be a delay of up to 90 days in this process, so be patient. The employer cannot fire the employee and cannot ignore the garnishment order; however, federal law does limit the amount garnished -- usually 25% of the next weekly
earnings after taxes, social security and other required deductions.

If you ran the judgment debtor's credit report and found lots of collection, lien and judgment items, your ex-tenant may be a good candidate for bankruptcy. When you check with the sheriff, ask if there are any
outstanding garnishment actions against the Defendant at the current time, and if there are, you might not get all of your money or get it over a longer period of time because of the limitation on the garnishment deductions. If
the debtor does file bankruptcy during the garnishment process, any monies collected by the sheriff will most likely be placed in the bankruptcy and not be remitted to you.

If, however, you can locate real estate or property owned by the debtor, record your judgment against it even if you are going to try to garnish their wages. By doing this, if they do declare bankruptcy, your judgment is then termed a "secure" judgment and you will be more likely to collect your funds when the property is sold or refinanced.

If you already have a judgment and don't want to go through these garnishment and collection efforts, be sure to record the abstract of judgment with the debtor's social security number so that at the very least your debt will be picked up by the credit bureau and reported in the debtor's credit file.

If challenges like collection efforts is something you tend to avoid, you may want to consider hiring a professional property manager. There are probably other areas of management, in addition to collection efforts, where a
property manager can recover or increase your rental profits, where you have become slack or not aggressive in you management efforts.

Obviously, just like selecting residents, selecting a GOOD property manager
requires a careful screening process, because there are bad managers just like there are bad residents. However, there are some qualified property managers that can boost or add to your management success and profits,
especially if you are a landlord that falls into one of the following categories: You have properties too far away for you to effectively manage, You are tired and frustrated with management
Or you are being sued or you are up against problem tenants that are too much for you to handle.

Should you seek out a professional property manager, here are the five most important questions you should always ask when interviewing prospective property managers. These questions are a BONUS section to this report that will help you identify a potentially good manager:

BONUS SECTION TO THIS REPORT
5 MOST IMPORTANT QUESTIONS TO ASK
WHEN INTERVIEWING A PROPERTY MANAGER:

1) "Do you do property management and general brokerage?"
Ask it just this way so you can determine if they really want to sell you
more property. If they do property management as a way to keep real estate
clients, they are doing it as a "courtesy" and rarely have the experience,
education or dedication to do the job properly. When the going gets rough
with your property, chances are they will be too busy to return your calls.

2) "How long have you worked as a Property Manager?"... NOT in real
estate...in property management.
While property managers may have the same state license requirements as
real estate agents who sell property, property management is considered a
"specialty" requiring direct knowledge of the field. Additionally, the more
experience the manager has, the more expertise you will have at your disposal.

3) "When was the last time you took a property management course?"
Unlike the practice of real estate sales, property management is governed by
specific rules that can be changed or altered in many ways...state
legislature, case law, direct government regulations (Fair Housing/
Discrimination) so having a professional manager who keeps abreast of
these various changes is crucial to you as a client. Again the more
knowledge that is available to you in management of your investment,
the less likely you will be unpleasantly surprised during your relationship.

4) "What professional property management affiliations do you have?
Most real estate agents belong to a Realtor association. Property managers,
however, can obtain more expertise and education through such organizations
as IREM - Institute of Real Estate Management; NARPM - National Association
of Residential Property Managers; NAA - National Apt Association;
The more information and knowledge that a property manager has
or is aware of, the more information and expertise will be available to you
in the management of your real estate.

5) "Do YOU own real rental/investment?"
While it is easy for a property manager to say "they feel your pain", somehow
it is easier to take bad news from someone who has been there...negative cash
flow and all. Be suspicious of a property manager who has all their "eggs" in
the stock market.

Lastly, ask yourself....would you rather pay a little more for an experienced
property manager, or pay a lot more to an attorney when a less qualified
property manager makes a costly mistake in the management of your rental
properties.