Tenant vacations in Bahamas, can’t pay rent
November 1, 2009
Q: I am writing this to get some advice as to what my legal recourse is. I live in the state of Maryland and I have a rental property located there also.
Recently I had a tenant that was behind in her rent one to two months. I felt bad for her as she was a single parent and had multiple car problems, so I never really pursued aggressively evicting her until she was two months behind on her rent and garbage started to pile outside her back door. At this time I approached her about starting to get the rent back on schedule and getting caught up, as well as cleaning up the yard outside. Also at this time I informed her that she needed to fix the basement door that her dog chewed through and broke. She told me that she would fix the door and get the trash cleaned up. She also asked me for a decrease in the monthly rental. I told her at that time that I could not do that without first talking with my husband. She gave me a check for one of the two months’ rent that she owed.
After talking with my husband and thinking about it for a week or so we decided that we would decrease the rent for a period of a year then it would go back to the original amount. I tried to notify her of our decision but was unable to get her. She had gone on vacation to the Bahamas. With this information we made the decision that we would not decrease the rent (if she could afford this then she should be able to afford rent). When she returned I told her that there would be no reduction in the rent and that the rent for that month was due. She assured me that she would get caught up by the end of October. About two weeks after this she informed me that she was moving and that she would not have the October rent till the end of November. I stupidly agreed again, taking her at her word. My husband and I worried that the weather getting cold would freeze the pipes and burst them if she moved and no one occupied the house right away so we placed a “For Rent” sign up. Immediately we started to receive calls about the house.
I wrote a letter to her telling her that she needed to be out by Nov. 14 in order to avoid being charged any further rental than what she already owed, and that if she went over this date that the rent would be prorated on a weekly basis of $100.00 per week. With this she moved out by the 12th of November.
On Nov. 14 we started to fix the house up to show it to people, she had not turned the keys in yet. There were 14 bags of trash in the basement and none of the repairs she was to have made were done, among other deficiencies that were found in the house.
On the 14th she returned the house key but not the shed key. When she returned the key it was late in the evening and my husband and myself had worked all day hauling most of the trash away and restoring the things that needed to be fixed. When she returned the key my husband caught her by accident because she was going to drop the key in my mail box and leave.
We had some of her mail and got her new phone number and told her that we would drop off the mail. My husband asked her about paying the rent and she restated that she would pay at the end of November when she got paid. When December came we could not get a hold of her by phone and so I sent her a letter and told her that if she didn’t pay the rent plus late fees that she owed us ($420) that I would go to small claims court and file a suit against her. I sent this by registered mail to her place of employment. She received this and sent me a letter back with a check for $20 and stated that she couldn’t pay any more than this per month and that I couldn’t take her to court if she was making an attempt to pay. I had also told her in the letter that if I took her to court that I would be asking for damages that she had done to the house plus court fees etc.
I am so angry that I could just scream. Can you help me out? Do I have a legal right in the state of Maryland to file a claim? Thanks for your help.
—Pam Bennett
A: I’d be angry, too. Apparently she was seeing how far she could go and how much she could get away with. Aren’t you glad you found out she had headed off to the Bahamas before you told her that you were willing to lower her rent?
I am not familiar with the specifics of the law in Maryland, but in most states you still have the right to take her to court to collect the money she owes. I don’t know where she got the idea that she wouldn’t owe any more than $20 per month if she decided she wouldn’t owe it. In order for her to only have to pay that amount, she and you would have had to have worked out a mutually agreeable payment arrangement. In that payment arrangement would be spelled out the penalties for her not abiding by her payments of $20 per month or whatever you all agreed to.
It may be in your best interests to accept $20 a month from her. But if you do, make sure that she agrees in writing with appropriate penalties for failure to abide by the agreement, such as immediately being taken to small claims court for the entire amount plus interest. You could charge her interest on the money she owes you. For example, if you charged her 18 percent interest on the $400 for a period of two years, her monthly payment to you would be $19.97.
Before you get her to sign anything, go to a legal supply or office supply store and get a promissory note form where you can spell out the penalties for failure to pay what she owes you. One thing you would want in it for sure is a clause that says that she is responsible for attorney’s fees if you have to sue her for failure to hold up her end of the bargain.
For extra added protection, you could take the note to the county courthouse and record it. Then it would show up as a debt on her credit report.
About the Author: Bob Cain
Some 30 years ago Bob Cain went to a no-money-down seminar and got the notion that owning rental property would be just the best idea there is for making money. He bought some. Trouble was, what he learned at the seminar didn’t tell him how to make money on his rental property. He went looking for help in the form of a magazine or newsletter about the business. He couldn't find any.
Always ready to jump at a great idea, he decided he could put his speaking and writing skills to work and perform a valuable service for other investors who needed more information about property management. So Bob ferreted out the secrets, tricks and techniques of property management wherever he found them; then he passed them along to other landlords.
For over 25 years now, Bob has been publishing information, giving speeches, putting on seminars and workshops, and consulting for landlords on how to buy, rent and manage property more effectively.