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Money Judgment

Most states allow you to pursue a judgment for money a tenant may owe you at the same time that you are proceeding to evict him. To do so introduces several complications so it will be worthwhile to study this section with care. Do not let the complications discourage you, however, as this procedure is really valuable. You may never again have the tenant pinned down in terms of location and jurisdiction.

There are advantages and disadvantages to seeking a money judgment as part of an eviction action.

DISADVANTAGES

Second: Most courts will require that the process server be able to personally hand copies of the summons and complaint to the tenant, If you are seeking only a judgment for possession (eviction of the tenant), the process server must attempt to personally serve papers upon the tenant, However, after he has attempted to do so without success, he may usually post the papers to the door of the rental premises. Such service is good enough to carry through the eviction, but may not be good enough to allow a money judgment in your state. In other words, it is more expensive and more difficult to combine a money judgment with the eviction. It is, of course, less expensive than starting a second suit for the money later on.

Third: Some tenants may be uncollectible under a money judgment, so why spend the extra money to get it. Welfare income and social security, for example, are "judgment-proof". However, times have changed. It is now much easer to track a dead-beat tenant and have rental debt posted to their credit report.

ADVANTAGES

There are several advantages of the combined action. It is definitely less expensive to sue for money as part of the action you are undertaking for an eviction than to do so separately. While you can sue the tenant for rent and damages at any time (until the statute of limitations runs out), you may have great difficulty finding him again. Finally, a judgment for money at the time of eviction means that you may begin collecting the judgment much sooner.

As important as the advantages and disadvantages listed above are the circumstances in the individual case. Often rent is not paid because the tenant has no income. A money judgment in such an instance only has value if you believe the tenant will be enjoying better circumstances in the future and that you can find him when that time comes. A tenant may be a welfare client. Welfare income cannot be collected by a creditor. Remember that a money judgment is only worth the extra cost and trouble if there is a good chance that it can be enforced. The landlord will have to weigh the facts of each situation and make the decision.

Remember that if you hold a security deposit from a tenant, whose income is otherwise unreachable, a money judgment will usually render the portion of that security deposit covered by the judgment entirely yours without any further compliance with the security deposit law; no check lists, inventories or notices of damages. Many landlords routinely seek a money judgment for the sole purpose of gaining full rights to the deposit without further hassle.

IMPORTANT NOTE: In an eviction lawsuit in most states it is better not to mention the security deposit, unless the judge addresses it. A security deposit cannot usually constitute rent to avoid eviction and a landlord cannot keep a deposit over the tenant's objection without a money judgment. In many states, however, you can automatically use security deposits to satisfy a money judgment without further compliance with your state security deposit law. You should never allow it to be used to lower the amount of rent a tenant must pay to avoid eviction.

If you decide to file for a money judgment, look carefully on the complaint form and select the appropriate box.

Collecting Money Judgments

Eviction returns possession of the unit to the landlord. But this is usually only a half solution-the landlord must still collect back rent. There are a variety of collection methods that can be used:

(a) Deducting from the security deposit. The landlord can deduct the judgment from the security deposit.

NOTE. The landlord must not forget to send the tenant a statement of disposition of the security deposit within the required time period.

(b) Filing an abstract of judgment. A copy of the money judgment can be filed with the county records office. This provides notice to state and local agencies (usually effective for 10 years) that the tenant owes money to the landlord. If the tenant obtains money through state agencies (e.g., inherits money through probate or gets a tax refund), the landlord could make a claim for that money.

(c) Obtaining a lien against the tenant's personal property. By filing a copy of the judgment in a state or local records office where the tenant's property is located, the landlord can attach that property to satisfy the judgment.

(d) Garnishing wages. If the tenant is employed, the landlord can garnish his or her wages. A portion of the tenant's wages are deducted from his or her paycheck and paid to the landlord.

(e) Creating a payment plan. The landlord can agree to accept payment of debt in monthly installments.

(f) Filing a small claims action. As a last resort, the landlord could file a small claims action to recover the balance of the tenant's debt.

NOTE. If the individual tenant has no job or assets, he or she is essentially judgment-proof~ in such cases, it may not be worth spending the time and money to attempt to collect the debt.

ADDITIONAL HELP

All too often, tenants quit the premises and disappear, still owing unpaid rent. The landlord must then go about the sometimes difficult task of finding the tenant to collect the debt; this process is known as "skip tracing." The following is a list of methods for tracking down these deadbeat tenants:

. Review the tenant's rental application. This document can yield information which can be used to locate the tenant.
. Contact the local Department of Motor Vehicles. If the landlord has the tenant's driver's license number, he or she can order a copy of the DMV file, which may contain the tenant's most recent address.
. Request a postal address correction. Send an empty envelope bearing the words "Do not forward-address correction requested" to the tenant's last known address. For a small fee, the tenant's new address can be obtained.
. Check the county tax assessor's office. If the tenant owns some real property, the assessor's records will have the address of the property.
. Check voter registration records. If the tenant is a registered voter, the county registrar's office will have a record of his or her registered address.
. Contact credit bureaus. The rental application should contain the tenant's social security number and an authorization to check credit. Run another credit check to obtain the tenant's current address.
. Contact state agencies. If the tenant holds a state license, e.g., to operate as a contractor, real estate agent or beautician, the applicable state licensing agency can provide the current address.
. Contact the tenant's employer. Even if the tenant has changed jobs, a former employer may be able to provide a new work telephone number or address.