As a property owner or manager, we have all encountered this problem; It is the first of the month and the rent is due. The majority of tenants pay the rent, but for that one tenant, the rent does not come in and a notice to pay rent or quit is served… But alternatively, what if the tenant decides to do the latter and “quit” by vacating the property?

The first reaction is usually anger and outrage resulting from this unfair turn of events because the rent has not been received, and since they have quit so suddenly, there is a high possibility that damages have been done to the unit. After the initial emotions pass, it is more productive to look at the situation from a different perspective: It is better to have a sudden vacancy than go through the strain of waiting to see if they are going to pay, working through the excuses and behavior of a tenant stalling for time, and then having them vacate anyway; The property manager and owner now do not have to make the agonizing decision to start formal eviction proceedings or spend time waiting for the rent; Bypassing an eviction means avoiding more expenditures and time to remove the tenant; If the current tenant is not going to pay the rent, it is better to have the unit back so a paying tenant can be procured and the tenancy can be improved. Furthermore, the security deposit can be applied to damages and loss of rent.  

Still, you realize you have found yourself in a sticky situation. Here are some tips and suggestions about navigating your way through this quagmire of obstacles in which the runaway tenant has left for you.

Can you take possession? Yes, if a tenant abandons the property, you can take possession. If they have left personal properties in the unit, then consideration has to be given to the value of what is left behind and how to dispose of it. It is important that a property owner does not rush into selling off the personal properties of a tenant to regain what the tenant owes them.

Do they still owe the rent?  If they are on a lease, the tenant will still owe the rent until the property is re-rented or the expiration date of the lease, whichever comes first.  If they are on a month-to-month tenancy, the rent is normally due for what is specified in the rental contract regarding the amount of notice required.

Do you still have to send security deposit refund statement? Yes, even if it is to the property address with a “please forward and/or address correction required.” This way, the property manager and/or owner are covered for itemizing the monies deducted against the amount of the deposit. It is good business to itemize security deposit damages whether the tenant vacates suddenly or follows the terms of the contract.

Can you report them to a credit reporting agency? Yes, as long as there is written documentation, attempt at notification, and if the rental agreement and/or notice to quit contains important wording notifying the tenant that the landlord has the right to report them to a credit reporting agency. This is required under Federal Credit Reporting Act law.

Can you still seek damages?  Yes, you can always seek damages in any situation if a tenant owes rent or monies for damages. The first step is to obtain a judgment in small claims or report the loss to a credit reporting agency.

How can you collect damages? The best solution is to use a collection agency since they have the tools and expertise to track people who owe money. Although the agency does collect a fee, it is better to receive some remuneration rather than nothing at all.

How do you avoid this situation? As your property management company, our solution is to prevent this by obtaining a qualified tenant.  However, there are no guarantees this will work. People often encounter difficult situations such as divorce, drugs, loss of employment, or high medical bills, which more than often can lead to poor judgment in handling their personal situation. 

However, if the tenant quits, it is better to take the most productive course of action and move on to a better tenancy for your investment and your peace of mind. Don’t let this situation be a usual occurrence; tenant problems like this well disappear into thin air when you form a relationship with Madison, whose unusually high success and turnover rate which has each of our clients thoroughly satisfied. We invite you to be one of them!

For more information about The Madison Real Estate Group, visit us at www.madisonreg.com or please call the office at 213-620-1010!