Alberta tenant abandonment: questions on correct process

[Matt Crowley]

Thank you for your input!

Last week I had a tenant provide no notice and moved out on March 1, 2016. This tenant has previously paid late but usually remedied the situation. I was prepared for late payment and after receiving no response from the tenant, filed with RTDRS on March 2, 2016. I proceeded to hand deliver the court notice and discovered by looking through the glass door that the suite was abandoned.

I have tried calling the tenant to no avail. I am unclear on how best to provide service. My somewhat limited experience with legal matters is that you should provide exactly the requirements as there are no points for being overly generous in providing notice. I want to fully fulfill my legal and moral requirements but at the same time, this tenant left me without a moment of notice. The month previous I had even allowed him to start making bi-monthly rent payments to accommodate some cash flow challenges with the understanding we would have a conversation if any events would arise that would threaten his ability to pay on time in future. So, yes, the writing was on the wall. But I was prepared.

We have already mitigated the immediate problem. The suite was cleaned, painted, and a new tenant was selected this weekend.

Key questions for which I would value receiving input:
1. Tenant's insurance: does this give me the ability to collect for damage or lost rent? He was required to provide proof of this when he took possession about 1.5 years ago
2. He didn't pay likely because he was embarrassed about losing his job. So 99% chance he has no money to pay me if I did receive a judgment against him. How does this process actually work? My court date is on the 15th. What judgment should I seek from RTDRS? While there are damages to the suite, I do not believe they are above the DD. The loss in rent will be in the neighbourhood of $1.800. Total damages have not yet been tallied. Are there any potential negatives to going to RTDRS? If damages are less than his DD may I have to pay them out and separately claim for loss of rent? His DD was ~$1350 as I recall.
3. Optimal method of collections? Hire an agency?

I'm just weighing my options and would like to receive input on how you would proceed forward. I am not after any kind of vendetta but I want to be fair to myself and also weigh the fact that he has obligations due to me that he did not fulfill.

 

[RE123RE]

Hi,
He moved out - Do nothing. Do Thank yourself for finding another tenant.
Go to court only for thousands. For hundreds it would be a waste of your time, money, effort and energy.
While collection is a given expense, it is not properly taken into consideration (its cost is too often underestimated) even in REIN's great property analysis.
Thanks

 

[Matt Crowley]

Thanks RE123. Conversations with a local eviction expert suggested that proceeding with the court hearing at this point is really nothing lost. I have already paid the $75 filing fee. I lost rent for March because the month was offered for free, which is $1900. Plus repairs to the property, the loss is in the thousands.

Apparently, with a judgment, you can file it at the courthouse against their credit. This will show up as a judgment permanently in their records. Eventually, it is likely they will want to settle it as they want to make larger purchases.

I think there is value in this. Plus it is a low pressure time for me to learn another dimension of management.

 

[Thomas Beyer]

Hi,
He moved out - Do nothing. Do Thank yourself for finding another tenant.
Go to court only for thousands. For hundreds it would be a waste of your time, money, effort and energy.
While collection is a given expense, it is not properly taken into consideration (its cost is too often underestimated) even in REIN's great property analysis.
Thanks

I agree 100% here.

Save yourself the grief and move on for smaller amounts, say sub $1000.

Time is money too.

Small claims court work quite well though.

 

[LAndersen]

Thank you for your input!

Last week I had a tenant provide no notice and moved out on March 1, 2016. This tenant has previously paid late but usually remedied the situation. I was prepared for late payment and after receiving no response from the tenant, filed with RTDRS on March 2, 2016. I proceeded to hand deliver the court notice and discovered by looking through the glass door that the suite was abandoned.

I have tried calling the tenant to no avail. I am unclear on how best to provide service. My somewhat limited experience with legal matters is that you should provide exactly the requirements as there are no points for being overly generous in providing notice. I want to fully fulfill my legal and moral requirements but at the same time, this tenant left me without a moment of notice. The month previous I had even allowed him to start making bi-monthly rent payments to accommodate some cash flow challenges with the understanding we would have a conversation if any events would arise that would threaten his ability to pay on time in future. So, yes, the writing was on the wall. But I was prepared.

We have already mitigated the immediate problem. The suite was cleaned, painted, and a new tenant was selected this weekend.

Key questions for which I would value receiving input:
1. Tenant's insurance: does this give me the ability to collect for damage or lost rent? He was required to provide proof of this when he took possession about 1.5 years ago
2. He didn't pay likely because he was embarrassed about losing his job. So 99% chance he has no money to pay me if I did receive a judgment against him. How does this process actually work? My court date is on the 15th. What judgment should I seek from RTDRS? While there are damages to the suite, I do not believe they are above the DD. The loss in rent will be in the neighbourhood of $1.800. Total damages have not yet been tallied. Are there any potential negatives to going to RTDRS? If damages are less than his DD may I have to pay them out and separately claim for loss of rent? His DD was ~$1350 as I recall.
3. Optimal method of collections? Hire an agency?

I'm just weighing my options and would like to receive input on how you would proceed forward. I am not after any kind of vendetta but I want to be fair to myself and also weigh the fact that he has obligations due to me that he did not fulfill.

Here is a tip we learned at the SOS. What this tenant has done is theft. Plain and simple. If someone was caught stealing from you, what would you do? Weigh it against the stress and decide. If you let it go this time what will you do next time?

 

[Matt Crowley]

^ not helpful. Sounds like information marketing soft speak.

Or maybe I'll have a better understanding of what to do if I REALLY think about my "why"...

Maybe there is a binder at the back of a room I can buy

This is a business decision. Let the $ speak for itself.

 

[Matt Crowley]

Just an update on this thread.

We decided to go the legal route, went through RTDRS. Tenant attempted to evade service but we ultimately were able to serve him ourselves. Tenant did not show up to court date. We were awarded with $2,100 in damages and allowed to keep $1000 damage deposit. We then registered the court order with the Court of Queens Bench to obtain a garnishee of wages form.

Today we received a letter from the court that the full $2,100 has now been garnisheed by the government and will be distributed to us.

It took just over 5 months to achieve this result. Long and painful but achievable.

 

[housingrental]

Hi Matt
When you are owed small amounts in the future you might want to consider a collection company.
Your time and stress are often worth more than their fee.

 

[Matt Crowley]

I looked into credit collection company. No interest until there is a court mandated amount owing. Once you get there, the rest is easy.

 

[Wayne Hillier]

So looking back on it now, would you have done anything differently? You had said the writing was on the wall. But you made an attempt to help him with bi-weekly payments.

I'm having similar issues with a tenant missing rent, among other issues but he truly treats this house like his home. I've made some exceptions and tried to accommodate too but I read topics like this and it makes me second guess everything.

 

[Matt Crowley]

One important thing I would change is to communicate home cleanliness. I was hesitant to say very much because his wife was very proud of how "clean" she kept the house and he was proud of her for keeping it so clean as well. I don't think things got out of control in this instance. Just troublesome.

It was a high rent and he was living beyond his means. It wouldn't have mattered if I had cut the rent $500. He was defaulting on someone, that was imminent. I'm overall happy with the outcome. Probably the most important thing I learned was the process and how critical it is to find a way to achieve service after RTDRS filing. I'll be more creative with that next time around.

For me, late rent is totally unacceptable. I deal with it in different degrees of severity depending on the person. If it is someone who has been really troublesome, I file with RTDRS the first day late. Sometimes good tenants screw up and are late too. Really depends on the person for me.

One tool I have found helpful in reducing late payments is signing the lease for $50 more than the advertised price then having a rental incentive addendum attached. Late once, lose the incentive for the whole lease (works out to several hundred dollar penalty). When someone is late once, incentive is gone for the whole lease. Then the late fees kick in. No bullshit. Rent incentives are for good tenants who pay on time. Don't pay on time? Riskier tenant and rent is higher.

 

[Wayne Hillier]

Great information. And greatly appreciated. The rental incentive is something I'm definitely going to implement.