LAURENE H. YOUNG, (B) MPM, RMP, REALTOR
Young Hawaii Homes, Inc.
2011 President, Oahu Chapter
National Association of Residential Property Managers
Q. I had to go to court to evict my tenant. The judge awarded me back rent and I was able to evict the tenant. But it took several weeks more to get the tenants out, they left a lot of belongings behind, left the house dirty and there were damages that were not included in my first court appearance. I have written the tenants letters, but they don’t reply. What can I do to collect my money?
A. First of all, I have to say that I am NOT a collection agency. So, I would highly suggest that you contact your attorney for advice on how to collect on your judgment, or hire a collection agency. You most likely evicted your tenants for non-payment of rent so it is likely that they are still unable or unwilling to pay you now. Your judgment is good for 10 years. You can extend the judgment for an additional 10 years provided you file with the court before the first 10 year period has expired.
You would have to go back to small claims court to increase the amount that the tenant owes you because of additional cleaning or repairs you had to do after the original judgment was granted.
Collection agencies will charge a fee, usually a percentage of the amount collected. You should contact the agency to find out what their fees are, what their recovery rates are and what they can do for you. They will write letters and make calls to the tenant but you must provide them with all the information needed, including current phone numbers and addresses. They will not do the research to locate a tenant.
Third party collection agencies have many rules and regulations they have to follow. They must be registered with the State of Hawaii (certain entities, including attorneys, real estate brokers, financial institutions, are exempt from this requirement). Third party collection agencies must abide by the Fair Debt Collection Practices Act. Some of the restrictions include only calling during certain hours, and not being able to call the debtor numerous times a day nor harass or threaten the debtor. If you are trying to collect on your own behalf, I would suggest that you still follow the Fair Debt Collection Practices Act guidelines and try to deal respectfully with the tenant. Besides, being verbally abusive or talking with the tenant’s friends, family or neighbors about them will only make the job of collecting more difficult and may lead to other problems.
You could garnish wages or property with a garnishment order. “Wages” might not include income from pensions, insurance proceeds, workers’ compensation, disability benefits or welfare assistance, among others. You had to pay a fee to file your eviction papers in court, but once you received your judgment, there is no additional fee necessary to file the garnishment documents at the court. However, you must pay a process server a fee plus mileage to serve the documents to the financial institution or employer. Be sure that you have the correct names and addresses. Sometimes the documents can’t be delivered because the tenant has closed his bank account or changed jobs; if this happens, the order is no longer valid. You will then have to try to find the new information, get another garnishment order and pay the process server again to serve the new employer or bank. There are limits on the amount they can deduct from each of the tenant’s paychecks, so it may take a while to get the entire amount owed to you. There may also be limits on amounts taken from joint checking accounts.
You could place a lien against the tenant’s real property. You’ll need to take a certified copy of the judgment to the Hawaii Bureau of Conveyances and record the judgment. If the tenant attempts to purchase or sell a home or refinance, they will be forced to pay you first. You may get lucky and one day receive payment from the tenant who can’t buy their new house until they satisfy the lien. If a tenant does pay you in full, you should file a “Satisfaction of Judgment” with the small claims court.
If a tenant does leave belongings behind, you have some obligations. Anything that is determined to be of value may either be sold, stored at the tenant’s expense or donated to a charitable organization. Before selling or donating anything, you must make reasonable efforts to notify the tenant of your intent to sell or donate the items. You must also advertise the sale in a daily paper of general circulation where the unit is located for at least three consecutive days. The sale or donation must not take place until fifteen days after the notice to the tenant is mailed. Any proceeds from the sale (after deductions for costs related to the sale and any back rent owed to the landlord) must be held in trust for the tenant for 30 days. Anything left unsold or determined by the landlord, in good faith, to be of no value, may be disposed of by the landlord.
All of this is very time consuming and will cost you additional money. As I stated at the beginning, before you go ahead with any collection, you should contact your attorney for advice, or hire a collection agency.