Most landlords and property managers do nothing when a tenant moves out owing more than the security deposit. Either time, money, or just not knowing what options are available prevents a landlord from pursuing the outstanding debt. The following are options available to landlords that would like to satisfy the outstanding balance.
Obtain A Judgment
If you have a current address for the tenant, either a forwarding address or the address of an employer, you are able to serve process. Obtaining a judgment in small claims court is the most effective way to collect the outstanding debt. Once the judgment is issued, the landlord can garnish wages, bank accounts and state income taxes, place liens on real property, and/or seize personal property. The judgment becomes a public record and is recorded by the consumer credit bureaus so any time a credit report is obtained the outstanding debt will be noted. This may make it difficult for the former tenant to obtain rental housing, as most landlords would not rent to a potential tenant that has an outstanding balance with another landlord.
It is generally inexpensive to file a small claims case and should you win, the court costs are added to the outstanding balance, however, it does take time to prepare the case and appear in court.
Collection Agency
If you do not have a current address and are unable to obtain it on your own, but you do have other contact information, a landlord can hire a collection agency to pursue the outstanding debt. Depending on the agency, expect to pay about 25%-33% of the amount collected. If they Collection Agency also reports the outstanding debt to all three Consumer Reporting Agencies, you may pay as much as 50% of any amounts collected.
This costs nothing upfront and requires only the time necessary to find the agency and complete/submit the paperwork.
Report The Debt To The Consumer Credit Bureaus
A landlord is unable to submit a derogatory report directly to the three major Consumer Reporting Agencies (Experian, TransUnion, and Equifax). However, there are a few associations online that can do this for you. You must become a member and pay an annual membership fee of approximately $80. Once you become a member, it is very inexpensive ($8) to report a derogatory to a Consumer Reporting Agency. This takes little time and can be effective in the long term. If another landlord runs a credit report, they will see the outstanding debt. It will be difficult for the former tenant to obtain rental housing with this on their record. Also, should the former tenant decide to purchase a home in the future, they will have to satisfy the debt in order to obtain a loan for a mortgage.
Online Resources
Use online resources to report the tenant’s rental history. Prepare a tenant report at http://www.AboutTenants.com. Tenant reports take just a few minutes to complete and include questions relating to the type of expenses charged to the tenant upon move-out, the total amount charged to the tenant before applying the security deposit, and the total outstanding balance as of the date the tenant report was prepared. The reports have no effect on the former tenant’s credit rating; however, tenant report’s act as a reference and provide enough detail about the tenant’s rental history so that other landlords can make an informed decision as to whether or not to rent to this tenant. The report also provides the option to be contacted by other landlords if the tenant applies for housing.
This is a free resource for landlords nationwide.
Showing posts with label how to screen a tenant. Show all posts
Showing posts with label how to screen a tenant. Show all posts
Sunday, February 1, 2009
Saturday, January 3, 2009
How To Screen A Prospective Tenant
Thorough screening of prospective tenants by the landlord is a must! A large percentage of problems relating to tenants can be avoided by adhering to a strict screening policy.
The screening process begins the moment a prospective tenant responds to the advertisement. If the tenant leaves a message on an answering machine, is the message clear and concise? Do they use proper grammar and speak intelligently? When the call is returned, how is the telephone answered?
When first speaking with a prospective tenant, take note of how they respond to the questions. Do they answer all of the questions asked and share information about themselves? Are they polite and respectful? What is their financial situation? Is the potential tenant concerned about paying the move-in costs (i.e. rent and deposits)? Will more than one family be sharing the space in order to pay rent? Be prepared to provide information and ask pertinent questions. This is an opportunity to weed out those that are not viable candidates up front. For example, if a prospective tenant discloses that they have a prior eviction and you have a strict policy of not renting to those with prior evictions, the screening process would end here on the telephone. You would politely disclose your policy, thank them for their interest and say goodbye. Your time has not been wasted and neither has theirs. During this first conversation, a landlord typically provides and obtains the following information:
If, at this point, the prospective tenant is a viable candidate, you can provide the address of the property and schedule an appointment to show the rental. Obtain contact information in case there is an emergency or if you need to confirm the appointment. If the appointment is not scheduled for the same day, make sure to confirm the appointment. Many times prospective tenants are looking at several places and may have forgotten about the appointment they scheduled with you, lost the directions, or have already found a place to rent. You will save yourself time and money by confirming appointments that were not scheduled for the same day.
During the face-to-face meeting, you will learn more about the prospective tenants. Were they punctual? If late, how late and what was the reason and the attitude? Remember, you are screening a potential tenant and looking for someone responsible enough to pay rent on time and take care of the rental. Punctuality counts! Take note of their appearance. Are they neat and clean? Do they smell of smoke? How did they get to the appointment? Did they take the bus, have a friend drive them, or do they own transportation? If they own a vehicle, does it leak oil? Are they respectful of you and the home? Do they wipe their feet before entering? Do they shake hands and make eye contact? When you are showing them around the rental, do they ask questions about the unit and show interest? Do they express any concerns? Are the concerns legitimate or is it a sign of a difficult tenant? This is a great time to continue the conversation you had on the telephone if you thought of any follow up questions? Do they have any additional questions for you?
The next step in the screening process is to have the prospective tenant complete an application to rent. If you do not have a good Rental Application, registered users can obtain one free at http://www.abouttenants.com/. The application is very important. It is where you are able to find out answers to question that may not have been discussed, such as whether they have been sued, filed bankruptcy, been evicted, etc. Ensure that the prospective tenant responds to every line item. Nothing should be left blank on the application. If they are uncomfortable providing social security numbers or bank account numbers at this point in the screening process, it is ok. Once you narrow the search down and notify the prospective tenant that they have been selected pending the credit check and verification of information, the prospective tenant can provide the sensitive information at this point, if they are still interested in the rental. You must obtain the social security numbers for every occupant over the age of 18, just in case there are future legal issues. No exceptions! Bank account numbers and branch information can be obtained from the personal check used to pay rent if it is not provided by the tenant on the application. Additionally, most landlords do not request this information, but if given the opportunity it is best to obtain upon move-in vehicle information (i.e. make, model, license plate number, and vehicle identification number). This information may useful if you need to collect on a judgment at a later date.
Once you have selected two or three prospective tenants, you can begin screening the tenants based on information provided in the application.
1) Is there anything on the application that would prevent you from renting to this potential tenant? For example, if the tenant smokes and smoking is prohibited, this applicant should be notified that they are no longer being considered.
2) Use online tenant screening resources such as http://www.abouttenants.com/. About Tenants provides landlords with a network to report a tenants rental history and research a potential tenants rental history. It is a free site, though does require registration to gain full access.
3) Use search engines such as Google and Yahoo. Search by first and last name. If the results are overwhelming, try narrowing it down by including the state(s) listed on the application. Review the results, if any.
4) Perform a free criminal search at www.CriminalSearches.com.
5) If you know their landline phone number, use the Google Phone Book querying function to search the number. Go to www.google.com and in the search box type in "phonebook: XXX-XXX-XXXX" then select “google search”. If found, the name and address will be displayed. If the reverse search yields no result, that means the number is either a cell phone or an unlisted phone number. Use this information to verify the current address listed on the application and the addresses of the references provided.
6) Use the various online people finder/search sites to verify any information on the application that you can for free. It is not recommended that you pay for information at these sites. Listed alphabetically are a few of the many websites: www.411.com, www.addresses.com, www.anywho.com, www.directory-assistance.net, www.iaf.com, www.infospace.com, www.switchboard.com, www.theultimates.com, www.ussearch.com, www.whitepages.com, and www.zabasearch.com.
7) Contact the employer to verify the date of hire, current salary, whether the employee is ever late to work and how often he/she is absent from work.
8) Contact the landlord(s) listed on the application and verify the date of move in, rental rate, number of times rent was paid late, was a late fee charged, did the tenant pay the late fee, did they own pets, were the pets authorized, who provided notice and why, and would you rent to this tenant again. Keep in mind, a potential tenant could list a friend or relative as their “landlord”. Or if the potential tenant is a problem tenant that has been given notice to vacate, the current landlord may not be willing to provide negative information since it would prevent the problem tenant from moving out and on.
9) Verify the authenticity of a social security number given to you by a prospective tenant at www.ssa.gov/employer/ssnv.htm. This is a free service provided by the United States Federal Government.
10) Run a credit report on your first choice (you must have signed consent prior to running a credit report, which is generally obtained on the application to rent). Are there any prior judgments associated with rental housing? Did the potential tenant have utilities they defaulted on? Were they evicted or foreclosed on? Are there any liens or other recent significant delinquencies?
It is up to the landlord to decide what can be overlooked and what cannot be. If the applicant does not meet the criteria for renting, do not rent to them. It is better to leave the rental vacant and continue advertising. When landlords overlook information and disregard red flag warnings to fill a vacancy quickly, more often than not it ends up costing the landlord more than it would have to leave the rental vacant. Paying an extra month of mortgage is typically less than the accumulation of unpaid rent, property damage, possible eviction costs, etc. These are expenses a landlord may not be able to recoup, especially if the tenant has a history of moving from one rental to the next and leaving behind unpaid bills and damage!
Once a tenant is selected and you have a tentative agreement to rent, drive by their current residence. If it is a house, is the yard being maintained? You may also decide to make arrangements to see the inside of their current rental prior to signing the lease.
Schedule an appointment to sign the lease at the rental property and let them know the approximate length of time it will take. Give the potential tenant information about the amount of rent and deposit that are due upon signing and the forms of payment you will accept (e.g. usually a cashiers check or money order so that payment is guaranteed at the time you turn over keys). Ask that they bring with them any pets that will be listed on the lease. It is important to meet the pet before the lease is signed and make sure you meet the pet at the rental. Allow the pet time to walk around inside. If a pet is not house trained, it will likely mark its territory during this time. It is best to find out now, before you have to replace all the carpet! Get a copy of the driver’s license for each tenant over the age of 18. Request that they bring copies, for your records, of pay stubs for the most recent month (or two) if you do not already have them. Employers may not be willing to verify income over the telephone, so this will serve as the verification of income and will be necessary should you need to file a lawsuit, serve documents, or garnish wages in the future. It is a best practice to ensure that rent is no more than 1/3 of the monthly gross income. If all checks out, it is time to sign the lease.
Most people do not read what they sign so take the time to discuss each term with the new tenants. This will help to reduce future problems by ensuring that they understand what they can expect from you and what your expectations are of them.
The screening process begins the moment a prospective tenant responds to the advertisement. If the tenant leaves a message on an answering machine, is the message clear and concise? Do they use proper grammar and speak intelligently? When the call is returned, how is the telephone answered?
When first speaking with a prospective tenant, take note of how they respond to the questions. Do they answer all of the questions asked and share information about themselves? Are they polite and respectful? What is their financial situation? Is the potential tenant concerned about paying the move-in costs (i.e. rent and deposits)? Will more than one family be sharing the space in order to pay rent? Be prepared to provide information and ask pertinent questions. This is an opportunity to weed out those that are not viable candidates up front. For example, if a prospective tenant discloses that they have a prior eviction and you have a strict policy of not renting to those with prior evictions, the screening process would end here on the telephone. You would politely disclose your policy, thank them for their interest and say goodbye. Your time has not been wasted and neither has theirs. During this first conversation, a landlord typically provides and obtains the following information:
1) The number of bedrooms and bathrooms
2) The square footage of the rental
3) The rental rate and any required deposits (refundable and nonrefundable)
4) What appliances are included
5) What utilities are included, if any
6) What services are included, if any (e.g. landscaper, pest control)
7) Discuss any item(s) that would exclude them from the process (i.e. no pet policy, no smoking policy, etc.)
8) Discuss whether references are checked, employment verified, and a credit report obtained. This allows the potential tenant the opportunity to tell you upfront about what you will find (i.e. foreclosure, bankruptcy, poor relationship with prior landlord, etc.)
9) The number of potential occupants
10) The number and types of pets
11) The date they would like to begin tenancy
12) How long they plan to stay in their next rental
13) The reason they are moving
If, at this point, the prospective tenant is a viable candidate, you can provide the address of the property and schedule an appointment to show the rental. Obtain contact information in case there is an emergency or if you need to confirm the appointment. If the appointment is not scheduled for the same day, make sure to confirm the appointment. Many times prospective tenants are looking at several places and may have forgotten about the appointment they scheduled with you, lost the directions, or have already found a place to rent. You will save yourself time and money by confirming appointments that were not scheduled for the same day.
During the face-to-face meeting, you will learn more about the prospective tenants. Were they punctual? If late, how late and what was the reason and the attitude? Remember, you are screening a potential tenant and looking for someone responsible enough to pay rent on time and take care of the rental. Punctuality counts! Take note of their appearance. Are they neat and clean? Do they smell of smoke? How did they get to the appointment? Did they take the bus, have a friend drive them, or do they own transportation? If they own a vehicle, does it leak oil? Are they respectful of you and the home? Do they wipe their feet before entering? Do they shake hands and make eye contact? When you are showing them around the rental, do they ask questions about the unit and show interest? Do they express any concerns? Are the concerns legitimate or is it a sign of a difficult tenant? This is a great time to continue the conversation you had on the telephone if you thought of any follow up questions? Do they have any additional questions for you?
The next step in the screening process is to have the prospective tenant complete an application to rent. If you do not have a good Rental Application, registered users can obtain one free at http://www.abouttenants.com/. The application is very important. It is where you are able to find out answers to question that may not have been discussed, such as whether they have been sued, filed bankruptcy, been evicted, etc. Ensure that the prospective tenant responds to every line item. Nothing should be left blank on the application. If they are uncomfortable providing social security numbers or bank account numbers at this point in the screening process, it is ok. Once you narrow the search down and notify the prospective tenant that they have been selected pending the credit check and verification of information, the prospective tenant can provide the sensitive information at this point, if they are still interested in the rental. You must obtain the social security numbers for every occupant over the age of 18, just in case there are future legal issues. No exceptions! Bank account numbers and branch information can be obtained from the personal check used to pay rent if it is not provided by the tenant on the application. Additionally, most landlords do not request this information, but if given the opportunity it is best to obtain upon move-in vehicle information (i.e. make, model, license plate number, and vehicle identification number). This information may useful if you need to collect on a judgment at a later date.
Once you have selected two or three prospective tenants, you can begin screening the tenants based on information provided in the application.
1) Is there anything on the application that would prevent you from renting to this potential tenant? For example, if the tenant smokes and smoking is prohibited, this applicant should be notified that they are no longer being considered.
Additional warning signs that may be suspect on an application to rent:
a) If the applicant wrote that they “live with friends” and do not list a landlord. Most tenants write this when they have been given notice and do not want to provide their current landlord’s contact information.
b) If an applicant pays rent by cash only and does not have a bank account. The tenant more than likely has an outstanding judgment or has had their bank account seized in the past.
c) Line items were left blank on the application. The applicant may have overlooked the question(s) when completing the application or may not have wanted to answer the question(s). It is best to contact the applicant to discuss directly.
2) Use online tenant screening resources such as http://www.abouttenants.com/. About Tenants provides landlords with a network to report a tenants rental history and research a potential tenants rental history. It is a free site, though does require registration to gain full access.
3) Use search engines such as Google and Yahoo. Search by first and last name. If the results are overwhelming, try narrowing it down by including the state(s) listed on the application. Review the results, if any.
4) Perform a free criminal search at www.CriminalSearches.com.
5) If you know their landline phone number, use the Google Phone Book querying function to search the number. Go to www.google.com and in the search box type in "phonebook: XXX-XXX-XXXX" then select “google search”. If found, the name and address will be displayed. If the reverse search yields no result, that means the number is either a cell phone or an unlisted phone number. Use this information to verify the current address listed on the application and the addresses of the references provided.
6) Use the various online people finder/search sites to verify any information on the application that you can for free. It is not recommended that you pay for information at these sites. Listed alphabetically are a few of the many websites: www.411.com, www.addresses.com, www.anywho.com, www.directory-assistance.net, www.iaf.com, www.infospace.com, www.switchboard.com, www.theultimates.com, www.ussearch.com, www.whitepages.com, and www.zabasearch.com.
7) Contact the employer to verify the date of hire, current salary, whether the employee is ever late to work and how often he/she is absent from work.
8) Contact the landlord(s) listed on the application and verify the date of move in, rental rate, number of times rent was paid late, was a late fee charged, did the tenant pay the late fee, did they own pets, were the pets authorized, who provided notice and why, and would you rent to this tenant again. Keep in mind, a potential tenant could list a friend or relative as their “landlord”. Or if the potential tenant is a problem tenant that has been given notice to vacate, the current landlord may not be willing to provide negative information since it would prevent the problem tenant from moving out and on.
9) Verify the authenticity of a social security number given to you by a prospective tenant at www.ssa.gov/employer/ssnv.htm. This is a free service provided by the United States Federal Government.
10) Run a credit report on your first choice (you must have signed consent prior to running a credit report, which is generally obtained on the application to rent). Are there any prior judgments associated with rental housing? Did the potential tenant have utilities they defaulted on? Were they evicted or foreclosed on? Are there any liens or other recent significant delinquencies?
It is up to the landlord to decide what can be overlooked and what cannot be. If the applicant does not meet the criteria for renting, do not rent to them. It is better to leave the rental vacant and continue advertising. When landlords overlook information and disregard red flag warnings to fill a vacancy quickly, more often than not it ends up costing the landlord more than it would have to leave the rental vacant. Paying an extra month of mortgage is typically less than the accumulation of unpaid rent, property damage, possible eviction costs, etc. These are expenses a landlord may not be able to recoup, especially if the tenant has a history of moving from one rental to the next and leaving behind unpaid bills and damage!
Once a tenant is selected and you have a tentative agreement to rent, drive by their current residence. If it is a house, is the yard being maintained? You may also decide to make arrangements to see the inside of their current rental prior to signing the lease.
Schedule an appointment to sign the lease at the rental property and let them know the approximate length of time it will take. Give the potential tenant information about the amount of rent and deposit that are due upon signing and the forms of payment you will accept (e.g. usually a cashiers check or money order so that payment is guaranteed at the time you turn over keys). Ask that they bring with them any pets that will be listed on the lease. It is important to meet the pet before the lease is signed and make sure you meet the pet at the rental. Allow the pet time to walk around inside. If a pet is not house trained, it will likely mark its territory during this time. It is best to find out now, before you have to replace all the carpet! Get a copy of the driver’s license for each tenant over the age of 18. Request that they bring copies, for your records, of pay stubs for the most recent month (or two) if you do not already have them. Employers may not be willing to verify income over the telephone, so this will serve as the verification of income and will be necessary should you need to file a lawsuit, serve documents, or garnish wages in the future. It is a best practice to ensure that rent is no more than 1/3 of the monthly gross income. If all checks out, it is time to sign the lease.
Most people do not read what they sign so take the time to discuss each term with the new tenants. This will help to reduce future problems by ensuring that they understand what they can expect from you and what your expectations are of them.
Tuesday, December 2, 2008
I have obtained a judgment, now how do I collect?
Once a judgment has been obtained and you are ready to collect, the following options are available to you. This information is generic, as each state has its own court and collection procedures, which vary by jurisdiction. It is advised that you take the time to research the process for your specific state and contact a licensed attorney for legal advice.
GARNISHMENT
If you have obtained a judgment and the former tenant does not pay the judgment amount upon issuance, the best way to collect the money owed is to file a Writ of Garnishment. There are three types of garnishment: periodic, non-periodic, and income tax intercept.
A bank account or financial institution garnishment is very similar in process to a wage garnishment; however, instead of sending a writ of garnishment to the employer, it is sent to the bank or financial institution. The debtor is not entitled to prior notice of a bank garnishment and will be notified after the account has been frozen. You must know the name of the bank, the branch address, and the account number(s).
If the former tenant is self-employed, you must know the name and address of the business and the execution must specify that money from a “cash box” or “cash drawer” is being garnished.
LIENS
In some states, you may file executions upon automobiles, homes, land, or other property owned by the former tenant.
You may not need to do anything to record a lien on real property. In some states, a court judgment automatically creates a lien on any real property in that county. Contact the court clerk to determine if you need to take additional steps to record a lien on real property. If you do, the court clerk will issue an Abstract of Judgment-Civil for a nominal fee (approximately $15). You must be able to provide the legal property description, which is available from the County Assessor's Office. Once the Abstract is filed with the court clerk and returned to you, it must then be delivered to the County Recorders Office to be recorded (approximately $20). Once recorded, if the property is refinanced or sold, you will get paid the judgment amount plus interest.
You will need to contact the court clerk to determine if a lien may be placed on an automobile. Most states will not lien a vehicle for a small claims judgment unless the debtor voluntarily grants one to you. If granted, you will need a description of the automobile and location, the Vehicle Identification Number (VIN) (depending on the state), the name(s) of the legal owner(s), and any outstanding liens on the vehicle in order to lien the vehicle. This information is available from the state’s central Department of Motor Vehicles (DMV) office; local DMV offices cannot provide this type of information. There is a fee to obtain this information.
Liens need to be re-filed if the former tenant moves (without selling the property) or the judgment is renewed. Liens need to be removed once the judgment is satisfied.
ATTACH PERSONAL PROPERTY
A Writ of Execution must be filed with the court clerk (for a nominal fee). The Writ is then delivered to the Sheriff or Marshal with written instructions indicating what property to seize and where the property is located (fees vary). The Sheriff seizes the property and the property is sold at auction. Property may include major household appliances, tools, equipment, vehicles, etc. There are fees to store the property after it has been seized.
A NOTE ABOUT SEIZING VEHICLES: If a vehicle is to be seized you must include the name and address of any person or company that has an interest in the vehicle (i.e. include the lender’s information if the vehicle is not paid in full or if there is another person that has filed a lien, that information needs to be included). It is a requirement that you make reasonable efforts to find out if anyone else has an interest in the property (i.e. check with the DMV to find out who is registered and the Secretary of State’s Office/County Recorder to see if anyone has filed a lien). This can be a complicated process and become very expensive (i.e. fees to tow, impound, and store the vehicle, and if not claimed, fees to advertise and sell the vehicle).
Each state also has a list of personal property that is exempt from seizure. Please check with the court clerk to obtain a list of exempt personal property.
DEBTOR EXAMINATION
If you know the former tenant has assets, it may be worth your time to file a motion that forces the debtor to come into court and answer questions about assets, debts, and earnings. It may be called a "supplemental examination," "debtor examination," or "disclosure hearing", depending on your state. This procedure allows you to obtain asset information from the former tenant (e.g. account numbers for bank and non-retirement investment accounts, information about property or land owned, owned interest in a business, type and location of vehicles owned, etc. If the former tenant does not show up for the examination hearing, the court can issue an arrest warrant. You may want to consult an attorney to discuss this option and the fee.
If you are unable to satisfy the judgment using any of the methods above, at a minimum, judgments are recorded by credit reporting agencies and the former tenant’s credit may be adversely affect by the judgment and their ability to rent a home will be greatly diminished.
If the judgment is not satisfied, then it must be renewed after a ten-year period, for one more ten year period, by completing the required forms and submitting them to the court clerk.
BEST PRACTICE NOTE: Always make sure to obtain adequate information about the tenant’s assets on the “Application To Rent” and keep pertinent tenant information current by having the tenant update the information annually. This will make the task of obtaining and satisfying a judgment easier should the tenant leave an outstanding balance.
An Application To Rent and the Annual Update of Pertinent Tenant Information is available to registered users at http://www.AboutTenants.com.
GARNISHMENT
If you have obtained a judgment and the former tenant does not pay the judgment amount upon issuance, the best way to collect the money owed is to file a Writ of Garnishment. There are three types of garnishment: periodic, non-periodic, and income tax intercept.
A periodic writ of garnishment is used to garnish wages or other income paid to the former tenant on a regular basis or via installment payments (other income includes but is not limited to self employment income, commissions, rent payments, and land contract payments). It is valid for a given number of days depending on the state (e.g. 90 or 120 days) or until the judgment is paid off, whichever comes first.If you know the name and address of the former tenant’s employer, begin by garnishing wages. Provided the former tenant remains employed, the debt will be satisfied over time. Federal statutes limit the percentage of wages that can be garnished each pay period to 25% of disposable earnings (i.e. gross pay minus taxes, Social Security, and other mandatory deductions). Employees may also claim hardship thereby reducing the percentage garnished even further. Depending on the amount of the judgment, it may take a while to satisfy the judgment and you may need to file another writ of garnishment if it expires before the debt is paid in full. If the former tenant’s employer already has orders of garnishment that are in effect, you will have to wait until that judgment has been satisfied to have your garnishment processed. Garnishment orders are paid in the order that they are received by the employer, with one exception, if the employer receives garnishment orders with a higher priority than yours (i.e. orders for support or taxes) then the garnishment order from you will be set aside until the garnishment with a higher priority has been satisfied.
A non-periodic writ of garnishment is used to garnish accounts from banks or financial institutions (i.e. checking, savings, money market accounts, etc.) or other property. The writ is used one time. Once money has been garnished under the non-periodic writ, the writ is no longer valid. If there is a remaining balance on the judgment, you must obtain another writ. Each state has a list of funds that are exempt from garnishment. A few examples include social security benefits, veteran’s benefits, unemployment compensation, public assistance payments, and certain retirement benefits. Contact the county clerk for a complete list of exemptions.
An income tax intercept writ of garnishment is used to garnish a state income tax refund payable to the former tenant. The writ is used one time. Once the income tax refund has been intercepted by the Department of Treasury, the writ is no longer valid. Seven states do not impose a state income tax and two additional states limit income tax to dividends and interest income only. Other states do not support the garnishment of state income tax refunds at all. You may need to do a little research to determine if this option is available in your state. If it is, it is an easy process to garnish the refund but the amount garnished is usually a small amount. NOTE: this applies only to state income tax refunds. You are unable to garnish a federal income tax refund or local income tax refund.
A bank account or financial institution garnishment is very similar in process to a wage garnishment; however, instead of sending a writ of garnishment to the employer, it is sent to the bank or financial institution. The debtor is not entitled to prior notice of a bank garnishment and will be notified after the account has been frozen. You must know the name of the bank, the branch address, and the account number(s).
If the former tenant is self-employed, you must know the name and address of the business and the execution must specify that money from a “cash box” or “cash drawer” is being garnished.
LIENS
In some states, you may file executions upon automobiles, homes, land, or other property owned by the former tenant.
You may not need to do anything to record a lien on real property. In some states, a court judgment automatically creates a lien on any real property in that county. Contact the court clerk to determine if you need to take additional steps to record a lien on real property. If you do, the court clerk will issue an Abstract of Judgment-Civil for a nominal fee (approximately $15). You must be able to provide the legal property description, which is available from the County Assessor's Office. Once the Abstract is filed with the court clerk and returned to you, it must then be delivered to the County Recorders Office to be recorded (approximately $20). Once recorded, if the property is refinanced or sold, you will get paid the judgment amount plus interest.
You will need to contact the court clerk to determine if a lien may be placed on an automobile. Most states will not lien a vehicle for a small claims judgment unless the debtor voluntarily grants one to you. If granted, you will need a description of the automobile and location, the Vehicle Identification Number (VIN) (depending on the state), the name(s) of the legal owner(s), and any outstanding liens on the vehicle in order to lien the vehicle. This information is available from the state’s central Department of Motor Vehicles (DMV) office; local DMV offices cannot provide this type of information. There is a fee to obtain this information.
Liens need to be re-filed if the former tenant moves (without selling the property) or the judgment is renewed. Liens need to be removed once the judgment is satisfied.
ATTACH PERSONAL PROPERTY
A Writ of Execution must be filed with the court clerk (for a nominal fee). The Writ is then delivered to the Sheriff or Marshal with written instructions indicating what property to seize and where the property is located (fees vary). The Sheriff seizes the property and the property is sold at auction. Property may include major household appliances, tools, equipment, vehicles, etc. There are fees to store the property after it has been seized.
A NOTE ABOUT SEIZING VEHICLES: If a vehicle is to be seized you must include the name and address of any person or company that has an interest in the vehicle (i.e. include the lender’s information if the vehicle is not paid in full or if there is another person that has filed a lien, that information needs to be included). It is a requirement that you make reasonable efforts to find out if anyone else has an interest in the property (i.e. check with the DMV to find out who is registered and the Secretary of State’s Office/County Recorder to see if anyone has filed a lien). This can be a complicated process and become very expensive (i.e. fees to tow, impound, and store the vehicle, and if not claimed, fees to advertise and sell the vehicle).
Each state also has a list of personal property that is exempt from seizure. Please check with the court clerk to obtain a list of exempt personal property.
DEBTOR EXAMINATION
If you know the former tenant has assets, it may be worth your time to file a motion that forces the debtor to come into court and answer questions about assets, debts, and earnings. It may be called a "supplemental examination," "debtor examination," or "disclosure hearing", depending on your state. This procedure allows you to obtain asset information from the former tenant (e.g. account numbers for bank and non-retirement investment accounts, information about property or land owned, owned interest in a business, type and location of vehicles owned, etc. If the former tenant does not show up for the examination hearing, the court can issue an arrest warrant. You may want to consult an attorney to discuss this option and the fee.
If you are unable to satisfy the judgment using any of the methods above, at a minimum, judgments are recorded by credit reporting agencies and the former tenant’s credit may be adversely affect by the judgment and their ability to rent a home will be greatly diminished.
If the judgment is not satisfied, then it must be renewed after a ten-year period, for one more ten year period, by completing the required forms and submitting them to the court clerk.
BEST PRACTICE NOTE: Always make sure to obtain adequate information about the tenant’s assets on the “Application To Rent” and keep pertinent tenant information current by having the tenant update the information annually. This will make the task of obtaining and satisfying a judgment easier should the tenant leave an outstanding balance.
An Application To Rent and the Annual Update of Pertinent Tenant Information is available to registered users at http://www.AboutTenants.com.
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