Pursuing a Money Judgement Against An Ex-Tenant . . . Should You Even Bother?

Once you have evicted a tenant and have your property returned to you, you are confronted with the decision of whether to invest the time and money to pursue the ex-tenant for money damages or not.

Some of my landlord clients always pursue the ex-tenant for money judgments. Within that segment of landlords, some will obtain the judgment, docket it, and then sit on it, hoping the tenant will eventually pay it off (plus 12% interest) when they need to obtain a loan to purchase a home. Other landlords I work with will not only obtain judgment against the tenant but also proactively attempt to collect it through garnishment.

At the other end of the spectrum are landlords who never seek a money judgment against a tenant, as they consider it a waste of time and would merely result in "throwing good money after bad" because the tenant is not collectible. Still other landlords opt to try and collect from past tenants via alternative means, such as using the service of Rent Recovery Services, which allows you to report the ex-tenant's debt to the 3 credit bureaus without the need to obtain a judgment.

There are many options for a landlord to choose from when collecting from an ex-tenant. There is no single correct option for all situations or for all landlords. The correct option depends on many factors. I will sift through all the information (or lack thereof) my client has about the tenant to assist with the collection process. Sometimes, a discussion regarding the client's financial situation is needed. Determining my client’s ultimate goal is essential.

I believe time should be taken up front to discuss these matters with the client so there are no misunderstandings going forward. Many landlords are astonished to learn that once they obtain a judgment, they must spend more time and money to collect on that judgment. It is important to remember that a judgment is merely a piece of paper saying that your ex-tenant owes you money; it does not mean that you will get paid. Collecting on a judgment is a whole different ballgame . . . . and a different blog post.