Security Deposit is Not Rent. If You Did Not Collect Security Deposit Before They Moved In, You May Never Get It.
If you have allowed your tenant to take possession of your rental property without collecting the security deposit before the move in, you are probably not getting that security deposit. You may have put the security deposit in the lease, asked for the money verbally, anything; but the fact is unless you actually collected the security deposit before the tenant shut the front door, you let someone move in paying less than you intended. Maybe the tenant promised to pay in increments, said they would give the money to you a week late, made you think they will give you something for that down the road. If the tenant actually does that after moving in, you are extremely lucky.
Furthermore, the judge will not give you the security deposit money as part of a dispossessory judgment because the security deposit is not rent. The judge expects that you, as a property owner, behaved as a business owner when you began the business of renting property; moreover, the judge expects that you, as a business owner, collected the money that you required of the tenant (that is - made that tenant fulfill the obligations in your lease / agreement) before the tenant took possession of your house.
Security deposit is not rent. The security deposit monies for rental properties are to repair damages beyond normal wear and tear or to cover rent if the tenant defaults or abandons the property. If you did not collect security deposit in the beginning, you may never get it.
Dispossession = stripping someone of possession of your property – not debt collection. Let that sink in. Dispossessory proceedings provide a judgment that allows both tenant removal and a money judgement against that tenant. Great. But removing the tenant should be the primary focus when deciding to begin the dispossessory process. I know that most landlords want to evict a tenant because the tenant has not paid rent. Of course, lease violations or new plans for the property bring about dispossessory actions, too, but most evictions are about money; renting out property is business, not charity. Nevertheless, getting the investment property back so that it can make money with a paying tenant should be the primary focus during a dispossessory. Collecting the debt from a tenant who has not paid you already – well, that should be a secondary focus after the dispossessory.
Every day I talk to property owners and landlords who want to discuss collection while also trying to talk to me about getting nonpaying tenants out of a rental property. I do everything I can to collect the unpaid rent before filing the dispossessory warrant, but when a tenant stops paying, the likelihood of collecting unpaid rent is very, very low. Moreover, when I initiate the dispossessory proceeding, I file to both dispossess and get a money judgment for unpaid rent and court costs, and most of the time, my clients get both items on the judgment. But I have many clients who ruin their own dispossessory process by taking money after I have filed the dispossessory warrant with the court. Unless that money is returned, the case is over and the fees for the process are lost. That’s it. Maybe collecting that money satisfies the client, but maybe accepting that money, sometimes much less than the tenant owes, keeps the client from proceeding with dispossessing the tenant, and the tenant knows that. The tenant is conning the owner by making direct deposits that are nowhere near the unpaid rent and late fees (and sometimes utilities.) If an owner accepts one penny during the same calendar month that I have filed the case, the judge will tell that owner the case is over because that was rent for the month – whether it was old debt or current rent or – like I said, one penny deposited by a con artist.
Tenants con landlords all the time. Partial payments are part of the con. Promising to pay here and there to catch up is also a con.
Landlords and owners con themselves all the time. Accepting partial payments stops the process. Dwelling on collecting rather than dispossessing wastes time and can cost thousands in lost rent.
After we have concluded the actual dispossessory process through the courts and have removed the tenants, if there is adequate information to find the evicted tenant, then it’s time to garnish that tenant; then maybe there will be collection. But, getting to collection after beginning the dispossessory is months away, and the debt needs to be large enough to warrant what it costs in both time and money to collect it. The fee to file a garnishment and the collection bounty runs about 40% of the debt total.
Dispossessory is not debt collection; they are entirely separate processes. Successful dispossessory does, however, set the course to collect debt. Sadly, debt collection not performed before dispossessory filing must come after the entire dispossessory process ends. Period. You cannot collect one penny of money during the same calendar month that I file a dispossessory proceeding; it does not matter what day the rent is due. You cannot collect on penny of money during the dispossessory process until after the tenant as been physically removed from the home by the marshal, or the case is over and must be refiled.
Dispossessory first. Debt collection second. Separate processes.
I know, you finally to want dispossess your tenant this month because right now, you have had enough foolishness. You do not want to hear about more problems, more reasons why there is only part of the rent, none of the rent, and how that is not really their dog/cat/chicken(s) or subtenant. Yeah, I know. However, stop right now and think back to how many times you have already allowed that tenant to slide. Think about each month you have allowed infractions, shortfalls in the rent, unpaid utilities, and any other breaches in your lease. Now, think about this; your lease is a contract. Your lease does in fact, fall under Landlord/Tenant law but is also covered by Contract law. If you are habitually letting your tenant slide about rent and late fees and then accepting the money late over and over, you are altering your contract, maybe even creating a breach in that contract. Yep. You can break your own contract by habitually not adhering to it, and that means that you may no longer be able to enforce your lease, and by that I mean – exercise the right dispossess tenants because they aren’t following – you guessed it – the contract.
Here is what happened.
Last month, despite having a contract which states clearly that my owners can refuse late rent and evict, and despite the tenant agreeing to that in the contract, we could not evict this tenant. Despite Landlord/Tenant law that clearly states that an owner is only required to accept late rent once in any calendar year, this judge decided that the owners’ behavior of regularly accepting late rent created a breach of their own contract, and they could no longer enforce this contract and dispossess him for continually being late to pay. That’s right. Owner actions negated their contract, and the tenant walked out of court, not only remaining a tenant, but a tenant whom the owners had to reimburse for his court costs. The judge told all of us that the lease is henceforth going to be strictly enforced. Which means we must demand payment immediately when the tenant does not pay, file the dispossessory and go to court to collect and/or evict him.
Now, as a property manager, I am advising all my owners that we must notify all tenants that leases will be strictly enforced, no exceptions. We must give everyone notice that we will now follow the lease and then – do it. It is a bit sad when I consider that means normally good tenants cannot have an occasional slip-up without getting a demand letter and a maybe a court date because my owner can no longer be merciful in emergencies. But now, we have no choice if we want to be able to evict when this person cannot come through with the rent or with remedies immediately. Charity is no longer an option. Patience is no longer an option. To be flexible about rent could make the lease unenforceable.
Lease vs Actions. Actions may trump the contract and subvert Landlord/Tenant law; it depends on the judge; it depends on the county; it depends – on many things. But learn from my experience in Cobb County. Enforce your lease; make your actions consistent if you want to evict without a problem.
If your rental property is in foreclosure, it can complicate your dispossessory. When you stop paying your mortgage, the foreclosure notices likely start showing up at the rental property address. Your situation becomes very clear to your tenants when they get all those notices in the mailbox.
Lately, I had a case where the tenants presented evidence to the judge about foreclosure on the property from which they were currently being dispossessed; I had no idea that this property was in that state of affairs because the owner did not tell me. The foreclosure, and moreover my not knowing about the foreclosure, caused major problems in court. The tenants got crazy time and rent concessions because the owner could only sue for the unpaid rent before the foreclosure happened. My team never had a chance to develop a strategy that would have benefited the landlord in this situation, and we had to make a consent agreement with the tenant. If I had known to research and get a warranty deed, it turns out, we could have gotten a judgment for more money for the owner; instead, I had to react right there, get what I could in consent, and walk away. We could not risk going to trial because the judge may have thrown out the entire case.
Don’t think you can hide foreclosure from a tenant. If you think tenants won’t open your mail, you are completely wrong. In fact, some mortgage companies will send mail to the house addressed to – CURRENT RESIDENT. It might as well say, Hear ye, hear ye; we’re telling your landlord’s business. Moreover, the tenant may then show up to court and tell the judge that you’re not paying, that you do not own this place anymore. Some judges will scold the landlord, dismiss the case, and send everyone away. If I know ahead of time that this stuff is going on, I can go get a warranty deed that shows you still own the house or at least owned the house up to a certain point and take that proof to court. Otherwise, as an owner/landlord, you may have a judge that lets the tenant have tons of time to leave and tons of concessions when it comes to paying you. You may get nothing if foreclosure is mishandled.
I know it’s bad. The tenant stops paying you, and then you cannot pay the mortgage. It can become a vicious cycle. But you must disclose this stuff to whoever you are working with at the time. And if you are doing a dispossessory yourself, you better have proof that you still have a warranty deed for the property or had a warranty deed up to the date of the dispossessory filing.
When you bring in a roommate, you are subletting space to someone; you are bringing in a subtenant. By definition, subletting occurs when a tenant rents to someone who does not have a direct relationship with the landlord. Well, to understand the entire picture here, ask yourself, am I a landlord. In Georgia, a landlord is the person who owns the property or the person who is the property manager with the authority to lease and act on behalf of the property owner. If you are not the landlord, then you are a tenant. If you are a tenant who has sublet a space to a friend or anyone else without the permission (in writing) from your landlord, then you have a roommate who is trespassing against your landlord because your landlord has not given that person permission to be there. You have no authority, in this case, to terminate the roommate’s tenancy. That situation can be truly awful.
Bottom line, if you want to evict your roommate, your actual landlord will have to do it. The problem with having your landlord evict your roommate could be that you get evicted too for subletting without permission.
If you own the property or are the designated property manager for that property, you can terminate a subtenant with 60-day notice. If the subtenant, who could be your kids, friend, family members, or anyone, does not leave at the end of that notice, dispossess them. Figure out where you fall in this scheme before you decide you terminate your relationship with your roommate. Keep it legal – even if that means going to your landlord to tell him or her you let someone into your house or apartment. Your landlord can get the roommate out.
In Georgia, it is customary to send a non-paying tenant a demand letter that demands payment of rent. Many of my clients, many potential clients, and certainly most tenants do not understand the demand letter’s actual functions. The demand letter, of course, pushes the tenant to pay up, and it is pretty effective. Otherwise, the demand letter simply meets a customary –not statutory- requirement for anyone who needs to evict a non-paying tenant. The demand letter is a legal check box. Seriously.
Despite the simple intent of the letter, some weird notions about demand letters seem to pop up, both from clients and from judges. I have had clients want copies of my demand letter; I do not comply with this request because, well, it’s mine, and I have paid my attorneys to help me come up with various letters for various counties. I never give those things away because they are proprietary. Additionally, clients do not understand that the demand letter is a custom made check box that is essential to the case, and yet as great as that letter is, I cannot make the tenant actually go to the post office and pick up the letter and open it; moreover, clients do not understand that most judges know that the tenants will lie about receiving (read - saying they never received) that letter if they do open it. After all, delinquent tenants lie about everything; why would this letter be treated any differently?
And that brings me to magistrate judges and to some of the judges’ expectations of the demand letters that we send. In my experience, no judge has ever thrown out one of my cases because a tenant said they did not get the demand letter; that is because I always have proof I sent that letter. However, these same judges require very specific language in that letter for each of his or her respective courtrooms. I know. That statement hurts my head, too. If the judge does not like a demand letter that is acknowledged and then gets discussed in the courtroom, the judge may toss out the case. Mind boggling.
So, my company has various proprietary demand letters for each county. These letters have been crafted from my experience and knowledge of the judges there. I don’t share letters with clients because those letters took me time and money to craft with a team of experts and attorneys. Those letters are often so effective that the tenant pays after the tenant gets the letter. And in Georgia, a letter is a customary requirement of the law. The tenant receiving the letter in hand (or even acknowledging that the letter got there) is not necessarily a requirement as long as I can prove I sent the letter and show the judge what the letter said (again the letter must be pleasing to that particular judge). And if the tenant presents that letter in court, the judge better not find a flawed letter, or you the client may be starting from scratch – case over.
Know this; the demand letter is required in Georgia, although there is no statute for it. The demand letter must be sent properly to ensure that the judge accepts that the requirement has been met. The letter, should it be presented in court, had better please the judge. If you try your own demand letter, know your county magistrate judge.
Keep it simple, keep it legal.
I get emails and calls from clients who are completely freaked out about all sorts of things. I constantly remind myself that property owners and landlords do not deal with this all the time. Most people do not have my worldview. Many clients get really tired at the end of the process and say, “Your timeline says 6-8 weeks, and it has been much longer! My (friend, property manager, tenant, spouse) says they know a guy who got his tenant out in a few weeks.” Many landlords do not understand that each case I have has its own individual set of circumstances, and many times our cases end in a matter of days. A very few of our cases, because of extenuating circumstances, have taken six months to resolve because of appeals that no one could prevent. Well, I do not cut corners, and I do follow the letter and spirit of the law. Following Georgia law puts the process on a variable timetable. That being said, let me share my thoughts on the number one issue my clients get upset about – the eviction timeline.
If things go well, the timeline I provide really is the average time to get a judgment and to include the average seven day move out period that the evicted tenant gets from the judge. If things go well. Now let me tell you what can happen that makes the process not go well – that is stretch the timeline beyond average:
Again, I do not cut corners anywhere in the dispossessory process. I inform my clients with emails and video instruction about each phase and hope that this information keeps the process clearly outlined. Ultimately, though, everyone in the eviction process is at the mercy of the government. Read that last sentence again. I, the agent, am subject to the law. Our lawyers are subject to the law. Our landlords are subject to the law. The tenants are subject to the law. This is a government process. This is a process that follows rules of law. Please investigate landlord – tenant law to help set your own expectations of the process. We even have a link to that law on our website.
Setting expectations to all the possibilities can be downright discouraging. The law does not pick sides, and sometimes it feels like it is taking forever and the tenant is getting all the breaks. In the end, the law will land on the side of the landlord, if that landlord follows the process. And the process is not simple nor is it swift, but it is sure. Stay the course. And as always, keep it legal.
I get so much push-back from clients about obtaining a Writ of Possession at the end of the dispossessory process. After all, Georgia is one of a few states that does not legally require a Writ of Possession to reclaim property after the judgment has been handed down. Normally, after seven full days, you can legally take your property back if the tenant has abandoned the property. Seems simple enough, right?
But – how do you really know if the tenant abandoned the property? How do you know that the tenant has no intention to return to the home? How do you know that the tenant has intentionally abandoned (given up the right to) the possessions that were left inside that property?
Without a letter from the tenants stating to you, the property owner/landlord that they have willingly and intentionally left the property and do not plan on living there anymore, and that further, they have abandoned all personal items left in and around the property and no longer claim ownership of those personal items, you cannot prove they have abandoned anything.
In Georgia, if you are planning on entering and trashing out a property without a Writ of Possession, you must be certain of both non-use and tenants’ intent to relinquish all the rights to your property and their personal items. If you do not have the affirmative statement from the tenant asserting both those things to you, you are better off paying for a Writ of Possession. This Writ of Possession is the factual determination by a judge of the non-use and abandonment of personal property. This Writ of Possession protects you from future claims by former tenants that you wrongfully excluded them (yes, even after the judge said they were supposed to leave), or that you took their property and disposed of it, stole it, or sold it.
Personal property left behind in your home can really give you trouble. While Georgia law does not require you to keep possessions that you can prove have been abandoned, either by written statement from the tenants or by the Writ of Possession from the court, if you have neither the tenant’s written statement nor the Writ of Possession, the tenant can show up any time later and demand their property back.
If you are going down the dangerous road of forgoing the Writ of Possession, there are steps you should take to protect yourself.
There is no good way to protect yourself from problems without the Writ of Possession. The Writ of Possession legally protects you from all the work of inventorying, storing, and holding possessions. The Writ of Possession legally protects you from claims of lost and stolen items. The Writ of Possession gives you the power to schedule with a civil deputy to go into the home with a crew and have it cleaned out and locked up - with impunity – safety for you today and in the future. The Writ of Possession indemnifies you. Don’t skip out on this step to save money because it could cost you big if the tenant wants to make problems for you.
Remember, keep it simple; keep it legal. Keep yourself protected by a Writ of Possession.
Again, let me say - dispossessory is not collection. I hear from people every single day in every stage of the dispossessory process who are frustrated that no one is telling them how to collect the overdue rent. Moreover, these people get frustrated that I, personally, am not collecting their overdue rent. And I agree with every single client that it is just wrong to be out that much money - despite of a judgment in their favor.
Dispossessory exists to get non-paying tenants out of your property, and in many cases, it provides a judgment against the tenant for unpaid rent, utilities, and court costs. Winning your dispossessory means that those who do not pay must get out of your property; it also means those same folks are supposed to pay what they owe. Supposed to pay.
Judgments are not self-enforcing. Your tenants already proved to you that they did not pay as they agreed in your lease contract before you took them to court; sadly, the court that ordered them to pay you in the judgment does not enforce that judgment to pay you after court.
So, what can you do? Get a writ of Fieri Facias, also called by the abbreviation – Fifa. A Fifa is a court issued document that is proof of your judgment; it places a lien against your former tenant and any property that the tenant owns. Fifas can be recorded in any county in the state. The Fifa perfects the judgment was handed down in court and is valid for seven years. After seven years, you can renew the Fifa so that the judgment stays on the tenant’s credit report, and you may continue pursuing that tenant for as long as possible.
Fifa will help you in your collection efforts by providing you with a court issued lien - proof that you are entitled to pursue that tenant’s future income and assets to make yourself whole with official documentation.
I have already blogged about this subject. I blogged about this messy scenario the very last time I blogged about anything. Yet, another homeowner came to me with this same issue, and when we got to court, the personal property left at the home, almost played against the homeowner. The homeowner left personal property in a basement area and an attic area, and the tenant seemed fine with this arrangement right up until that he quit paying and was about to be ousted; then those personal items became a huge issue.
The homeowner’s personal property had been there at the very beginning and throughout the lease without any complaint from the tenant. Ever. Yet when the tenant stopped paying and got served with a dispossessory, he went nuts about the homeowner’s personal property taking up all his space. He said that he had never had the entire house that he rented because there was “stuff everywhere.” Even more bizarre, in pictures of the home that the tenant brought for evidence of the inconvenience, it became clear that one of the personal items left in the house, a television, was such a detriment to him that he had to move it to his bedroom to watch it. That’s right. This guy had moved the homeowner’s television from the basement to upstairs, so he could use the television throughout his lease. However, when this victim quit paying, and he got called on it, he complained that this television had interfered with his rights to the proper use of the house. There were several instances of this lunacy with several pieces of property in the house. I caught the tenant in this game when I reviewed his pictures and scared him into negotiating. This guy was trying to counter-sue the homeowner for prorated back-rent for entire portions of the house that he claimed he could not use during the lease. Pay attention to that. The tenant tried to ask for partial monthly compensation for his so-called loss for the entire 12 month lease. He had not even paid his rent on part of that lease, yet here he was demanding to be reimbursed. Seriously. Had he not messed up and brought pictures showing he was enjoying the homeowner’s property, she could have lost much of the value of that house, and likely, she would have had to pay up to the deadbeat. I have seen it happen to other people in various courtrooms. Luckily, it did not happen to my homeowner this time.
This is how personal property could hurt you; I will use my homeowner’s home as an example. This homeowner has an upstairs, a main floor, and an unfinished basement. She left property upstairs and in the unfinished basement (I stress that unfinished parts of the house are still part of the house.) In extreme cases, a judge can award the tenant who starts objecting to that situation, up to 2/3 off the rent that the homeowner has been charging – three floors of home with two floors containing personal property becomes one fully usable floor of the home (again, it doesn’t matter if it is unfinished space). This devaluation can happen despite the terms of the lease; despite the established precedent that the tenant has been paying full rent until he decides to quit; despite the tenant using the personal property for enjoyment. None of that matters.
I will say this again. Do not leave any personal property in the house; do not leave a television, a picture on the wall; a paper cup in a window sill. Do not do it. It could cost you big. A judge could cut the value of your lease by the percentage of entire area, an entire floor of your property, if you leave anything there that the tenant chooses to complain about. Protect the value of your rental; take your stuff out of the house. Period.
All posts coauthored by
Evict Them For Me and Southern Real Estate Services DO NOT provide any legal advice. We have lawyers to whom we can refer you, or you may seek your own legal counsel.
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