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Can An Attorney Actually Collect Past Due Rents from Commercial Tenants?

You bet they can, or, at least I can and do. OK, so this may be a little bit of shameless self-promotion, but I get tired of hearing from landlords:

“Why bother trying to collect if we are not going to get paid.”

Drum roll please:

In the last three months, I have settled three separate cases in which my client’s have sued both existing and former tenants for an aggregate amount of $335,000.00; that’s no mere chump change. One stipulation was for $80,000.00; the other for $110,000 and the first was for $145,000.00, plus continuing rents on the lease. The best part of these settlements was that the actual rents owed on all three leases was around $265,000 and we obtained all of our client’s attorney’s fees.

Now, I am not suggesting that we will always be successful, but these three collection suits are perfect examples of what can be accomplished if you carefully evaluate, before filing suit, the tenant’s obligations and their likely ability to pay on a judgment, if pushed to the brink. Choosing the right cases and tenant’s to pursue is half the work. But if you take the attitude, before you start that why bother, you will never collect what is owed to the landlord.

Part of the interesting thing about two of these cases is the fact that we were looking to and did obtain settlements for rents owing prior to a foreclosure. It is a common misconception that tenant’s who move out or owe rents, to a foreclosed upon, landlord, no longer have any lease obligations since the property was foreclosed upon. In fact, pre-foreclosure lease obligations may very will continue to accrue and be due to a secured lender and/or buyer after a foreclosure sale.

The economy goes in cycles and what goes up, usually goes down and back up again and so forth and so on. Just because the economy may be down, doesn’t mean that you can’t get your rent. If you are not prepared to go after your rent from tenants, I suspect that you shouldn’t be a landlord. Landlord’s need to, at the very least, look at what is owed, who owes it so that they can make a reasonable determination of what they can collect, when they will collect and how much it will cost to collect. This is very important information, even if you don’t want to evict a tenant and want to keep them in place.

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