As any landlord who’s had the misfortune of attending rent court knows, even when the judge decides in your favor, they don’t hand you a check. Collecting judgments is up to you, the landlord, and you shouldn’t hold your breath for the tenant to pay you just because a judge says they should. Most often, the back rent just becomes a tax write-off, and you’re that much poorer for it.

 

That said, landlords CAN collect money judgments, with a little determination and foresight.

 

But before we delve further, let’s define the term “money judgment.” In civil court (including rent court), a money judgment is a court order that one party pay another party of a lawsuit a specific sum of money. The money awarded is called the “money judgment,” and although you won the judgment, all you actually won is the legal right to collect it, not the money itself.

 

Each state has its own laws dictating how judgments can be enforced, so landlords would be wise to consult with a local attorney or collection agency to determine the least expensive and most effective way to pursue the judgment.

 

First and foremost, judgments are not enforceable until after they have been recorded among the public records of your jurisdiction. Once the judgment has been recorded, landlords must obtain a Writ (or Order) of Execution to begin the process, and then the judgment will appear on the tenant’s credit report. This will damage their credit, sometimes rendering them incapable of securing a credit card, car loan, mortgage, etc., and leading them to contact you about payment.

 

Sometimes, judgments can be attached to the tenant’s assets, such as wages, bank accounts, personal property, or vehicles, depending on your jurisdiction and nature of the tenant’s assets. The easiest way to discover a tenant’s assets is to simply make sure they include it all in their rental application, before they sign the lease agreement in the first place. If you don’t already know their assets, hiring an agency to determine them is usually more expensive than makes sense for a basic late rent judgment. (For a free rental application, see the Resource Box).

 

Unless the tenant declares bankruptcy, judgments stay in place for ten years after being recorded by the court. Additionally, you can apply for a ten year extension, before the original ten year period expires, for a total of twenty years to collect your judgment.

 

As a final note, landlords can collect judgments themselves, without the help of expensive lawyers or collection agencies. That said, it’s considerably easier to pay a professional to do it for you, as they know the laws inside and out, and can often deduct their fees from the amount collected.

 

Happy collecting!

Brian Davis
http://www.articlesbase.com/real-estate-articles/landlord-legal-tips-collecting-tenant-judgments-652882.html

This entry was posted on Monday, November 16th, 2009 at 2:04 am and is filed under collection agency. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.