Collecting rent is an important job as a landlord. But when you have unpaid rent, it's also one of the most frustrating issues. And if the tenant in question has already vacated the rental? It makes matters even more frustrating.
If you're experiencing unpaid rent, you're not alone. 43% of late tenant payments are, on average, one month behind. While the task of collecting past due rent can feel overwhelming, the good news is that collecting lost rent is possible, no matter the circumstances.
Whether you're managing one unit or working for a larger property management company, it's important to know how to collect unpaid rent after a tenant moves out. Here are the most effective strategies.
TL;DR
This is a common situation that many landlords face.
Best Strategies: How to Collect Unpaid Rent
Recovering unpaid rent after a tenant moves out can be frustrating and time-consuming. However, landlords who take a methodical, legally sound approach often have better outcomes. There are practical steps you can take to improve your chances of collecting what you’re owed.
1. Reach Out to the Tenant
This seems like a given, but it's important to be communicative first. In some cases where the tenant has vacated, reaching out and having a direct, professional conversation can save you the hassle of instigating formal action. A simple phone call, email or letter could prompt a rent payment without you having to do anything else, but do remember to document letters and keep payment records.
2. Review Your Lease Agreement
Before you make any move, it's vital that you review the written lease or rental agreement to make sure you fully understand the terms your tenant agreed to. Terms like rent amount, payment plan, and the consequences of non-payment can be helpful in determining your actions.
Some lease agreements allow the landlord to recover missing rent via the security deposit collected at the beginning of the tenancy. There are laws regulating what security deposits can be used for in certain states, so check your local laws.
3. Check the Property and Issue a Notice
Visit the rental to determine in the tenant has moved out. If there are clear signs the tenant is still living in the rental unit, then you'll need to post a notice to pay rent (a formal document that outlines the amount owed). This helps make your case if eviction is necessary.
- Some signs the tenant has permanently left include damage to the unit, such as holes in the walls or broken windows. Utilities may also be shut off or mail is in the mailbox.
- The tenant's vehicle may signal whether the tenant is still around or not
- It's not uncommon for tenants to leave their belongings in a unit after they move out, so it can be tricky to know if they're still living in the property based on that alone.
4. Send a Letter to the Previous Address
Where do you send a notice if they're not actually there? Find the tenant's previous address listed on their application. This is typically the rental property they just moved out of. Even though they're no longer there, they may have mail forwarding in place, which means it still counts as valid notice in many jurisdictions.
- Send the notice by certified mail with a return receipt requested. It gives you proof of delivery, which can be useful if the case ends up in court.
- Include the rent owed and due date. Provide a deadline for payment and clearly state that you'll take legal action if rent is not paid by this date.
- Always keep a copy for your records.
5. Let the Security Deposit Cover Unpaid Rent
If you've done all of the above measures and have checked if your security deposit can be put towards rent, it may be worth putting it towards those unpaid costs. Even if it doesn't cover the full amount owed, it can still reduce the size of what you need to collect.
- Always check your state's deadline for returning the deposit and sending the itemized statement. Missing it can cost you more than the unpaid rent.
Related: How ACH Payments Simplify Rent Collection for Landlords and Tenants
6. Take Legal Action in Small Claims Court
If the tenant does not respond to your notice, calls, or texts, you may need to file a claim in small claims court. Your local court should have a process laid out for resolving disputes with your former tenant. To file a claim, you'll need to fill out paperwork and pay any processing fees.
This is how it works:
- File in court and be as detailed as possible.
- Serve the tenant with an unpaid rent notice as directed by the court. You may also need to hand deliver or mail it to the tenant's previous address.
- The court gives the tenant time to respond to the complaint. If they don't, the proceedings move toward a hearing.
- At the hearing, each side presents their case and the judge will make a decision based on evidence provided. In cases where the tenant does not pay, the court may be able to garnish their wages.
While this is a lengthy process, it is often the recommended way to regain your losses as a landlord.
Consider Wage Garnishment
If you've already gone through the legal process and obtained a ruling in your favor, wage garnishment may be an option for you to consider. This court-ordered process allows you to collect what you're owed directly from the tenant's paycheck.
Hiring an Attorney
It's true that attorney's are not always necessary in small claims court, but having an attorney can help you speed up the process and tip the court judgment in your favor. In some cases, you may be able to have the former tenant cover the costs of your attorney fees, but this is not a guarantee. There's also no guarantee that the rent will be repaid, so that's also something to consider.
Contacting a Debt Collection Agency
If your former tenant stops responding altogether, it might be time to bring in outside help. A good debt collection agency will typically be experienced in recovering unpaid rent, as well as having the resources to locate and negotiate payment with hard-to-reach tenants.
Agencies will typically take a percentage of whatever they recover, but for property owners who lack the time or bandwidth to chase past due rent, this can be an effective route to take.
Tip: Choose an agency that specializes in rental debt. They're more likely to understand landlord-tenant laws and get better results.
Preventing Unpaid Rent Issues in the Future
Taking steps to ensure you're finding reliable tenants with a positive rental history can help reduce having tenant issues down the road. Screening tenants, checking their credit history, and talking with previous landlords can help gather the information needed to make the right decision.
Use a Clear Lease Agreement
The best kind of rental agreement is one that is clear and easy to read. Make sure your agreement does the heavy lifting for you, clearly outlining when rent is due, consequences of non-payment, grace periods, and other important terms.
Collect Rent Consistently
By establishing consistent, regular rent collection, you can help tenants get into a groove and stay on top of payments. With a rent collection software, tenants can automate billing, get payment reminders, and track transactions.
Consistency builds clear expectations and reduce the risk of late rent or misunderstandings.
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Hire a Property Management Company
If chasing unpaid rent isn't something you want to handle personally (or if you're managing multiple rental properties) bringing in a property manager can make all the difference. A good manager will enforce rent collection policies consistently, follow up on late payments, issue notices, and even coordinate with legal professionals if things escalate.
They also bring structure to lease enforcement, ensure documentation is properly handled, and act as a buffer between you and difficult tenants. There are property management fees involved, but the cost may be a smart trade-off for peace of mind.
Consider a Rent Collection Software
If you used automated rent collection tools while the tenant was still in the property, you already have a digital paper trail of payment activity. Even after they've moved out, many platforms can help you track delinquent rent, send follow-up notices, and maintain accurate records.
These systems are especially useful if the situation escalates to court, as they provide timestamped documentation of missed payments and communications.
Stay on Top of Your Rent Collection with TenantCloud
Dealing with unpaid rent starts long before a balance goes overdue. Clear lease terms, consistent communication, and organized records give you leverage if you ever need to escalate, whether that means filing in court, working with a collection agency, or pursuing wage garnishment. When your documentation is solid, you’re always prepared.
The easiest way to stay ahead of rent issues? Use a property management software with built-in rent collection tools. With TenantCloud, you can automate rent collection, send reminders, track payment history, manage maintenance, and keep clean financial records, all in one place.
