One of the biggest struggles of being a landlord is collecting delinquent rent from non-paying tenants. On the one hand, you need to collect money to keep your business going. On the other, you’re held back — if not by compassion to your tenants then by the law itself.
New York recently updated its rent laws by enacting the Housing Stability and Tenant Protection Act of 2019. The purpose of this law is to create an affordable rental housing market, which constitutes two-thirds of all dwelling units in the city. It made sweeping changes in residential tenancy when it came into effect last October 2019, and one of them was the process of eviction and collection of delinquent rent.
Changes in New York Rental Laws
According to the new law, landlords must:
- Send the tenant a notice by certified mail if they don’t receive the rent on the due date.
- Give an early notice if they want to increase the rent or refuse to renew the contract of a tenant. The notices should be given 30 days prior for 1-year-old tenants, 60 days for 1 to 2-year-old tenants, and 90 days for tenants of 3 or more years (up from 30 days notice for all tenants).
New restrictions on rent increases and fee collection were also introduced in the new housing bill:
- Landlords can only charge late payment fees if the rent is five or more days late.
- Late payment fees shouldn’t exceed $50 or 5% of the monthly rent, whichever is less.
- Landlords must give non-paying tenants a written rent demand that states the amount they need to settle. If tenants still don’t pay after 14 days, landlords may then file a case for eviction due to non-payment (up from three days notice).
- Once the case is filed, landlords must make sure that the tenants are served with legal papers at least 10-17 days before the court hearing (up from 5-12 days).
- The proceedings for a non-payment case may stop if the tenant settles the debt before the first court date.
- A tenant who faces eviction because of non-payment can stop the proceeding and eviction by paying his or her debt before the first court date.
- The NYC Housing Court can allow a tenant to stay in the unit for, at most, one year while looking for a new place to stay. However, the tenant must pay the rent on time during this period.
- If a tenant leaves before the end of his or her lease, the landlord can only charge the rent due for the remainder of the lease after proving that they exerted reasonable efforts to find replacement tenants.
Process Service is Key to Delinquent Rent Claims
Take note that many of the new rules set by the Housing Stability and Tenant Protection Act of 2019 extends the number of days landlords must give notice before initiating proceedings for non-payment and eviction. Moreover, the law also states that these notices must be delivered by a process server, and not merely sent via mail.
How to Collect Unpaid Rent After a Tenant Moves Out
Collecting unpaid rent after a tenant has moved out can be challenging. Still, there are several steps you can take to recover the owed funds. Here’s a guide on how to proceed:
Take the Rent out of the Security Deposit
You can deduct any unpaid rent if you’ve collected a security deposit from the tenant. However, review your state’s laws regarding security deposit deductions and provide the tenant with an itemized list of deductions.
Refer to the Lease Agreement
Check your lease agreement for any clauses related to unpaid rent after the tenant moves out. It may outline the procedures for collecting overdue payments and the actions you can take.
Notify the Tenant through a Certified Letter
Send a certified letter to the tenant’s forwarding address detailing the outstanding rent amount and providing a deadline for payment. This formal communication may prompt the tenant to settle the debt.
File a Small Claim in Court
If the tenant doesn’t respond to the certified letter or fails to pay, consider filing a small claim in court. This process allows you to present your case before a judge and seek a judgment for the unpaid rent.
Hire Debt Collection Services
Engaging a professional debt collection agency can be effective in recovering unpaid rent. These agencies specialize in debt recovery and can apply legal pressure to the tenant.
Consult with a Lawyer
If the situation becomes complex or you encounter legal obstacles, seeking legal advice from an attorney experienced in landlord-tenant matters can be beneficial. They can guide you through the legal process and ensure you take the proper steps.
Each jurisdiction may have specific rules and regulations governing the collection of unpaid rent, so it’s crucial to familiarize yourself with local laws. Always maintain accurate records of communications, transactions, and legal proceedings when pursuing these steps.
How to Start a Case for Non-Payment
If a tenant still refuses to pay rent after being served with a demand for payment, the landlord can initiate a case in Housing Court.
Step 1: File a non-payment petition that details the missed dates or rental periods and the total amount owed.
Step 2: Have the petition notarized.
Step 3: Submit the petition and other required forms to the Landlord-Tenant Clerk’s Office.
Step 4: Pay the fees and claim a court index number.
Step 5: Wait for a postcard with the court date.
Step 6: Hire a professional process server to deliver the legal documents to the delinquent tenants at least 10 days before the hearing.
Step 7: Appear at the court hearing. Bring the Affidavit of Service along with relevant pieces of evidence.
Ideally, the tenant would be encouraged to settle the debt and save everyone the hassle and cost of going to court. However, if the tenant resists and contests the claim, the landlord must wait for a ruling from the judge.
Contact Serve Index LLC
If time and money are essential right now, don’t waste time talking to tenants who’ve made a habit of turning a deaf ear to payment reminders. Take the first step to claiming the rent you’re owed and hire process servers from Serve Index LLC.
Get in touch with us today. Call 1 888 994 6339, email info@serveindex.com, or fill out our contact form.