What happens when a lease ends, and your tenant moves out of your rental property, and they still owe back rent or have caused so much damage that the security deposit isn’t big enough to cover those damages or outstanding charges?
This is a frustrating situation for any owner, and it highlights the absolute necessity of carefully screening tenants and collecting a security deposit that’s large enough to protect you. However, even good tenants can do bad things, and if you find yourself losing money because of one tenant’s behavior, you’ll need to be patient in your collection pursuits.
In South Carolina, there are a few steps that landlords can take, and today we’re talking about our experience with such situations.
Obtaining a Judgment in Court
In South Carolina, you can go to the magistrate court and pursue a judgment against that tenant for the amount of outstanding payments that are due. You’ll probably even win your judgment and feel pretty good about getting that money back. But, you’re going to be left with a problem.
According to South Carolina law, there are limits to how you can collect that money. In fact, there’s only one legal way to do it. You can only take that judgment and attach it to real property. So, the tenant has to own or purchase other land in South Carolina before you can get this money back through the judgment. If they don’t own any real property in the state, the judgment has little value to you.
This probably doesn’t seem fair. However, it’s the law, and you have to work within it. If your former tenant does own property, you’re in luck. However, most tenants will not have property, and you’ll have to wait until they decide to buy something before you can collect what they owe.
Use a Debt Collection Agency
In our experience as South Carolina property managers, the best thing to do is to submit all the outstanding debts that are due to a collection agency. There are some aggressive companies that specialize in tracking folks down. They can influence their credit, and at some point down the road, the tenant will want to rent another property or buy something that requires a loan or some sort of good credit history. When their credit report is pulled, these outstanding landlord charges will show up on the credit report. Then, those tenants are interested in coming back and trying to settle the debts so they’re cleared off the credit history. It’s the only way your former tenants can move on.
While you certainly have the right to go to court and file a complaint and get a judgment against a tenant who owes money, our experience is that the law doesn’t provide much help in our state. We encourage all our landlords to consult an attorney, who can look at specific situations and determine what should be done.
Please contact us at New Heights Property Management if we can be of any help with your Charleston property management needs.