How to improve your chances of collecting a bad debt from a tenant Part 1

• 1) Complete application.  Don’t settle for anything less than an application that is filled out completely!  Itsounds simple, but you would be amazed how many rental applications we see as a collection agency that arrive at our office half empty.  A partially filled in application will rob you of future income. 
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2)  A verified Social Security Number, previous address verification and three personal references are a must!

• The previous address and Social Security Number will help identify a debtor when he or she skips and is living elsewhere. 
• The three personal references could be instrumental in helping your collection agency find them and collect any money owed.
  
  

3)  Bank Accounts!

Make a photocopy of a prospect’s check, and the rent check every month. 

• That way, you will have the right information for recovery, and you may discover a secondary bank account or other changes crucial to collection. 
• If this person skips owing money, a record of their current back account numbers can spell the difference between successful collection and no collection at all
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4)Check Their Driver’s License.  Make a photocopy of the prospects’ driver’s license and Social Security card.  It is not uncommon for a bad ex-tenant to avoid a bad reference by claiming identity theft and saying he or she “never lived there”.  Copies of these documents will be crucial in identifying the debtor and collecting your money

5) Avoid the “Company Name” Scam.  If your prospect says “I would like to put the apartment in my company’s name,” your mind should hear “RED ALERT! “ It is a common scam for people with bad credit or rental history to try to rent under a company name to prevent you from running their credit. 

• It is often far more difficult to collect a debt from a company than it is from an individual. 
• Even if the ‘company’ exists, you must go through proper channels to bind it to the lease.  If you do write a corporate lease,  ALWAYS acquire the proper documentation to show the company is in good standing, and the person signing the lease is authorized to do so.
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• 6) Background Check Co-Signers.  One way to rent to someone with questionable credit or rental history is to require a co-signer. But avoid the common mistake of accepting a co-signer without checking their credit and rental history. It is crucial to collection to have the co-signer complete a rental application and sign an iron-clad agreement.  In fact, it is extremely important for every adult moving into the apartment to complete an application and sign the lease.  This gives you far more leverage and ability to collect any future debts
  7) Signed Move-In Statement.  Congratulations, you found a new tenant!  No need to walk through the unit – we’re all friends here, right?  Wrong!  For both your and your new tenant’s protection, walk through the unit with them before they move in.  Make accurate and legible notes about the condition of the unit. ”I wish I had a nickel for every debtor who says the apartment was cleaner when he moved out that when he moved in.” A signed Move-In Statement can prove him wrong