LURLINE R. JOHNSON (R), ABR, CRB, CRS, GRI, RMP
Property Profiles, Inc.
Past President, Oahu Chapter
National Association of Residential Property Managers
Q. I have a “what if” kind of question. As an owner of two rentals, I’ve been careful and fortunate for the most part in the tenants I’ve rented my units to. However, I am wondering about the recourse a landlord would have if a tenant refused to pay rent for the last two months and left the unit in need of repairs. If you have information on the individual’s workplace and their bank, is it possible that their wages or bank account can be levied against? Do you file a claim, go to court, etc.? What about necessary repairs…if you have documentation, can that be added to the amount of rent in arrears if the deposit doesn’t cover the costs? Will this hypothetical tenant’s credit be affected and is there a service where a landlord can file a case history of a “bad tenant”?
A. This is a common problem that landlords face at some point, unfortunately, and questions on how to deal with it have been answered in this column in the past. The following is information and advice we provided not too long ago with one update I want to bring to your attention…the increase in the amount you can file for in Small Claims Court, previously $3,500, now $5,000.
If your tenant doesn’t make good on their rent payments or there are damages to the unit that exceed the amount of security deposits being held, then you can go through the small claims process to collect in District Court. In Hawaii, the maximum amount you can claim in Small Claims court is $5,000. If the judge ends up hearing the case – assuming you elect to not go through the arbitration process – and you win the judgment, it will be up to you to record the judgment and then collect on the monies owed. To collect, you can file to garnish the wages of your delinquent tenant, use a collection agency or pursue the tenant on your own. If you don’t get a judgment, turn it over to a collection agency, or report it against their credit, most likely no one will ever know they left with an outstanding balance. For those who are not set up to report the debt to the tenant’s credit, you may want to consider a collection agency to do it for you.
Since the court doesn’t do collections, you might want to ask yourself if it’s worth your time and effort to collect on the debt before you go through this process. Some people and businesses will prove to be harder to collect from than others, as they have little money, few assets, and aren’t likely to acquire much in the near future. On the other hand, if the person you’re pursuing has a steady job, valuable real property, or investments, you may have an easier time in the collection process. In any event, the advice we give is to get the place re-rented as soon as possible to get income coming in again.
Regarding the repairs – to be able to prevail in court you will need to have documentation of the condition of the property before the tenant took occupancy, as required in the Landlord Tenant Code (HRS 521-42(a). This is done with an inventory and condition form which is dated and signed by both the tenant and the landlord. Pictures are also helpful. You will also be required to submit a statement with receipts or estimates to the tenant within 14 days of termination. Without this documentation it will be difficult to obtain a judgment in your favor.
Answers to questions in Landlord Tenant Q&A are provided by members of the Oahu Chapter of the National Association of Residential Property Managers (NARPM), an organization that supports the professional and ethical practices of rental home management through networking, education, and certification. The Oahu Chapter, founded in 2004, has become the largest in the nation with 175 registered members.
Disclaimer: The answers provided in this column by Realtors address individual cases and should not be construed as interpretations of the law. For specific information on Hawaii State Law, go to http://hawaii.gov/dcca/areas/ocp/landlord_tenant or contact an attorney.