Rental Rules for Landlords who rent Property in Florida- Rent Deposits

Florida's Landlord Tenant Law falls under Chapter 83 of the Florida Statutes.

Rent and other Deposits: Direct quote from  Section 83.49 of the Florida Statutes
A landlord has the discretion to collect various deposits as well as some rent in advance. These advance payments generally vary in range. You should be careful about making any deposit unless a definite decision has been made to move into the unit. A tenant who puts down a deposit but then decides not to occupy the unit, MAY NOT be entitled to a refund. If a deposit is non-refundable it should be stated in the rental agreement.

A damage deposit is the most common requirement of landlords. At the time of the pre-rental walk-through with the landlord, you should make note of damaged items or areas, worn rugs, broken fixtures, etc. and give a copy to the landlord. Keep a copy for your files, which may help eliminate or minimize disputes later.

When you move out, the landlord must either return your deposit within 15 days of termination of the rental agreement, if the landlord does not intend to impose a claim upon the security deposit; or justify in writing by certified mail, to the tenant's last known mailing address within 30-days upon termination of a rental agreement, as to why they are keeping a portion of or all of the deposit. If the notice is not sent as required within the 30-day period, the landlord forfeits his/her right to impose a claim upon the deposit, unless you fail to give proper notice prior to vacating.

Next:   What is the Responsibility of the Landlord?

US tax rules on rental property- Expenses you can deduct

  The following was taken from the IRS website 2010.

Rental Expenses (continued)

Other Deductible Rental Expenses

In addition to mortgage interest and property taxes, deductible rental property expenses include:

• Advertising
• Auto and travel expenses to check on the property
• Cleaning and maintenance
• Commissions paid for collecting rental income
• Insurance premiums
• Legal and professional fees
• Property management fees
• Repairs
• Utilities paid for the tenant
• Homeowner association fees
• Other rental-related expenses, such as rental of equipment and long distance phone calls

US tax rules are a bit different- excerpt from the IRS website on rental property

Personal Use of Rental Property

Whether to Report Income and Expenses

Taxpayers who do not use a dwelling unit as a home (for personal purposes) should:

• Include all the rent in their income, and
• Deduct all the rental expenses, even if expenses exceed income

Taxpayers who do use a dwelling unit as a home and rent it out 15 days or more during the year should:

• Include the rent in their income, and
• Deduct the rental expenses

However, rental expenses that exceed rental income may not be deductible.

Taxpayers who do use a dwelling unit as a home and rent it out fewer than 15 days during the year should:

• Not include the rent in their income, and
• Not deduct the rental expense

This topic discussed when to report rental income and deduct rental expenses for property a taxpayer used for personal purposes.

If the property was used as a rental for the entire year, the income and expenses can be reported on Schedule E.

If the property was used partially as a rental and partially as a residence, some expenses may need to be allocated as rental use or personal use; these expenses are reported separately. The most common methods used are based on the number of rooms in the dwelling or on the total area of the dwelling.

Taxpayers who do not use a dwelling unit as a home (for personal purposes) should include all the rent in their income and deduct all the rental expenses.

Taxpayers who do use a dwelling unit as a home and rent it out 15 days or more during the year may not be able to deduct rental expenses that exceed rental income.

Taxpayers who do use a dwelling unit as a home and rent it out fewer than 15 days during the year should not report any of the income or deduct any of the rental expenses.

Canada -Tax form and guide pertaining to Rental Income reporting for Tax purposes- for CANADA

 The official Rental Guide used in Canada  can be found on the CRA site or  you can just click on the LINK.  It is about 32 pages and it is the 2010 version.    It basically spells out the expenses you can claim and those you cannot.  It gives you the different classes in order to determine your rate of depreciation also known as the capial cost adjustment (CCA)This guide will be updated every year as soon as Canada Revenue Agency comes out with a new guide.  The Statement of Real Estate rentals also known as the T776 has also been download from the official CRA site.  It can be used as a guide on what expenses are allowed.  It consists of two pages. The first page lists all the expenses and page 2 is recerved for CCA or depreciation calculation.  I hope this is not too tecnical for you.  I can post small snippets as we get closer to tax time. If you have a specific question, post it here and I will try and answer it with a new post.
Click Here for the rental guide .
Click here for the T776 - this form lists all the expenses for your rental property.

      

How to get ready for Income Tax time ....How can I make this less painful?

If you are going to go into the rental business you should also be prepared to keep meticulous records if you don't want the taxman to exclude any of your expenses. .
There are various scenarios:
1) you live in the house and rent part of the home out
2) you own a condo and rent it out part of the year
3) you own a condo and rent it out for all of the year
4)You rent out the whole house to one or more tenants.

First, buy a cheap Hilroy spiral notebook and put all your receipts pertaining to the rental properties  in that book.  It would be a good idea to staple or tape it on each page with a small explanation of what the product is. At the end of the year, you will have every receipt in one place.  Depending on your bills, you may find that you need more than one book. Another way to keep your receipts organized is to keep an Index at the back of the book. Number all the pages starting with 1.  As you tape each receipt on the back put a brief description,  the total amount of that specific receipt and the page number where you can find it. I use this index to enter the information at the end of the year in an excel spreadsheet and then add them up automatically. .

In addition to the regular expenses such as, electric, heat, water, property taxes, house or condo insurance, you can also include  interest paid on mortgage payments.

If you keep a small office in your home, office expenses are allowed if it pertains to keeping records for your rental property. If the office is off site and in your house, all the house expense receipts should be kept.  The portion of the room as compared to the rest of the house will determine what percentage of your bills can be claimed as office expense.  The easy way to do it is to take the square footage of the office area divide it by the total square footage of the house and  multiply by 100. This is the percentage  of the bills you may claim
Example:
The house is 1500 sq. feet.  The office is 500square feet.  (500/1500) = .33333 *100= 33%
You may claim 33% of all your household bills except for telephone unless you have a separate line for your office.   Then it would be 100% of that telephone bill. Your household bills would include: property taxes, house insurance, heating, hydro, water.

Your office expenses( of which you could claim 100%) would include:
Paper, printer and other office supplies- pens, staples, scotch tape, ink jet or laser jet toners. Lighting, desk, chair, pad on the floor, filing cabinets, file folders, file holders etc.
Computers  ( Class 10) you can claim 30% depreciation.  Fax machines, you can claim 20%.

 Any tools or furniture or appliances costing  less than $500 can be claimed at 100%.  Anything over $500 you can claim depreciation of 20% ( class 8)

In Canada, CRA site of the different classes and depreciation levels can be found on http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/rprtng/cptl/dprcbl-eng.html.

In the US information on the calculation of the depreciation of properties and rates is found at http://www.irs.gov/publications/p946/index.html


Other expenses are background checks,   Purchase of lease forms,  Legal advise, the cost of  Tribunal proceedings and evictions , repair work , collection fees and  advertising fees.

If you use your car to drive to the rental properties you can claim a portion of these expenses.  Car insurance, gas, car wash, license fee, depreciation, and if you have a loan, interest on that loan, and if you are leasing, lease payments. The way that s calculated is usually done by kilometers or miles..  If you drive 20,000 km or mi per year and  5,000 of those miles or km  relate to the rental property the you would use the same formula as the home expenses.    5,000/20,000 =.25 *100= 25% of all expenses.
 If you use an accountant to do your taxes, his fees would also be tax deductible.
If you furnish the apartment, depending on the cost of the items they could be discounted 100% or you can claim depreciation expense. If the item is worth more than -

What is important is to keep all those receipts.  The more organized you are, the cheaper the cost to do your taxes.  Without those receipts the accountant and the tax man can disallow your expenses.   By taping or stapling the receipts in the book, you will never lose them and they will be at your fingertips.  Heaven forbid you should be audited, but if you were, you would be able to substantiate your expenses with the relevant receipts.

 My advice: If this is the first time you are renting out property, have a specialized tax specialist do your taxes the first year.  Compare what he does to the list I just gave you.  Make sure he/she covers everything.  Some good tax specialist will offer information and will ask a lot of questions  as they are trying to  do the taxes in your favor. If you deal with someone that does not ask too many questions, you may be dealing with someone that doesn't want to work too hard for you.  But if you supply all the receipts, be prepared to ask if any of them are not used and why, especially if they have been mentioned here.

Another tip is to use a credit card that you devote solely for the expenditures that pertain to the rental units. You still have to keep detailed receipts so that the reason for the expediture is clear.

LIght Humour- Tenant Excuses for not paying the rent

Tenant Excuses For Not Paying The Rent

"I can't pay my rent as my BMW is in the shop, 

and I cannot affordto pay for both."

"I can't pay my rent because the checks come

 out of Japan and theplane crashed."

"If I move, my friends won't know where to find

me."

"Well, you see, I cannot pay the rent

 because my daughter ate my husband's paycheck."

"I deposited my paycheck in the bank teller

machine and it got caught in the rollers. 

It took six days to tear apart the machine."

"I had my choice of paying the rent or buying 

a car.  I bought a car.  I knew you would understand."

"I am sure I paid you -- YOU must have lost it."

"You towed my car away that was illegally parked

 and I refuse to pay my rent until you get my car

 out of impound."

"It's your fault.  You deposited my check too late.  

My automatic withdrawals went through the bank before

the rent check."

"There is nowhere else to go.  The place I applied to

 will not take me because you are evicting me."

Finally, courtesy of Randy Chapman, office manager for

the Apartment Association of Seattle & King County, this

reason for not paying the rent: "The house is haunted."

Information of how the Landlord Tenant Act works for the different states.- New Jersey, Wisconsin, Virginia

In New Jersey the way landlord tenant cases are clearly illustrated. Just click on this link to take you to the site.

In Wisconsin a legal company provides the following guidance. Click on this link to find out. 

In Virginia, the Department of Agriculture and Consumer Affairs has a web page that answers questions regarding the landlord tenant issues.  Click on this link for access.

Each week I will try to add a few different states until all are covered.

Comment or Question?

Leave a comment or ask a Question and I will try to provide the info on the next posting.

Access to all the Landlord Tenant Laws that pertain to Canadian Provinces

If you live in Canada and would like access to the actual Landlord and Tenant Act just click on the appropriate  link and it will take you directly to the government site. Every province has their own set of rules.  Provincial Law governs the Landlord and Tenant Act. You can bookmark this link or just bookmark my blog and you can check it any time.  Since this is a direct link to the government web site, the rules and regulations together with any of the forms will always be up to date.

1) Ontario -http://www.ltb.gov.on.ca/en/index.htm -- if you would like to take a peak preview of the coles notes version of the Residential Tenancies Act click here and if you need help with disputes this is the site that will help you with forms etc check out the  Landlord and Tenant Board, 

2) Quebec - http://www.rdl.gouv.qc.ca/en/droits/droits.asp

3) British Columbia -http://www.rto.gov.bc. -ca/

4) Alberta-http://www.slsedmonton.com/userfiles/file/Landlord%20Tenant.pdf

5) Saskatchewan -http://www.justice.gov.sk.ca/ORT

6) New Brunswick and Labrador –http://www.gs.gov.nl.ca/faq/landlord_faq.html

 7) Prince Edward Island - http://www.irac.pe.ca/rental/

8) Nova Scotia - http://www.gov.ns.ca/snsmr/access/land/residential-tenancies/contact.asp

9) Northwest territories and Nunavut -http://www.justice.gov.nt.ca/RentalOffice/rentaloffice_information.shtml

10) Yukon - http://www.community.gov.yk.ca/consumer/landtact.html

If your property is located in Canada or in the United States

Check out our page  on Canadian laws  This is a quick summary of the rental rules in each of the provinces.  It is not in depth but it gives you an idea of how different the laws are depending on which province you live.

Federal initiatives for low-rental housing: A study of the application of Section 16, National Housing Act, 1954 (as amended) to Metropolitan Toronto

If your property is located in the United States check out these links:
There are books in the market that can help you be a better landlord and get to know the laws. It would not hurt to have something in writing to refer to when you need it and you don't have access to the internet.  "The written word is always more powerful than the spoken word".  People always give more credibility to a fact that is written down on paper as opposed to someone yelling at them.

American Landlord: Everything U Need to Know... about Property Management

Secrets to a Successful Eviction for Landlords and Rental Property Managers: The Complete Guide to Evicting Tenants Legally and Quickly

Above The Law     The California Landlord's Law Book: Evictions       Landlord and Tenant Law

Rent Control: Regulation and the Rental Housing Market      

Does the Landlord have legal access to a Tenant's apartment?

1.5.3 Can the landlord show the rental unit when the tenant is not at home?

If the landlord complies with the rules given in the answer above, the landlord can show the rental unit when the tenant is not at home.

1.5.4 What can the tenant do if the landlord enters illegally?

If a landlord does not follow these rules, a tenant can contact a Residential Tenancy Branch office to help resolve the dispute. If the dispute goes to dispute resolution and the dispute resolution officer believes the landlord may continue to enter the rental unit illegally, the tenant may be allowed to change the locks and keep the only keys. The tenant must give the landlord the keys when they move out. If the tenant does not do so, the landlord can deduct the cost of changing the locks from the security deposit with the tenant's permission or a dispute resolution officer's order.

1.5.5 Can a tenant change the locks?

Tenants must not change the locks without the landlord's permission or without a dispute resolution officer's order.

If an emergency occurs when the tenant is not at home and the door cannot be opened, the landlord or emergency personnel may remove the door.

RentalAgreement 2010.doc - This is a word document

  This is a word document that you should be able to download. If you are having a problem downloading it , please let me know by putting a comment in the "comment section.
RentalAgreement 2010.doc 

Lease Forms- Tips on how to complete

Make sure that the lease forms indicate the total number of pages and have the tenant initial each page.  You as the landlord will also initial each page at the bottom  The Free Lease Form published on this Blog, has the footers at the bottom of each page.  This will ensure that no pages will be removed or changed.  Your copy of the lease will have their initials on every single page.

Another important hint: Make sure you see a minimum of 2 pieces of ID.  You'd be surprised what people will do to hide their real identity.  By ensuring that every page is signed, any unscrupulous tenants or landlords will be thwarted.

Bonus - Free Lease form accessible on the Internet

Obtain a free copy of the Lease Form.  No strings attached. No advertising.  This is a copy of the actual lease form.  There is no charge to use this form. It is free. It is a Word document so that you can change anything you want once you download it onto your computer.  You can save it and keep it for future reference. Or if you lose it, you can just come back here and click on the form for another copy.

Screening Tips for Landlords

Tenant ScreeningTips

1)In your initial phone interview, be sure to ask 'why' they are moving. If they fumble, stumble or complain about their current landlord, this may be a red flag.

2)-When you take their application, tell them you will be checking all references, employment history and credit history...ask them if there will be any problems with that. Listen and don't interrupt them. Silence is a powerful thing, use it.

3)When you take an application from a prospective tenant ask to see their drivers license. Make sure the picture is the same person and that the address listed on the license is the same one they wrote on the application. Professional BAD TENANTS have other people rent for them. Ask for 2 pieces of Identification.

4)-An anxious tenant needing an apartment NOW is a big RED FLAG. Tenant needs a place immediately either has recently been evicted or has some personal problems that will only get worse.

5)-Personally meet everyone that will be occupying the property. Make no exceptions.

6)- ALWAYS call the people listed as their previous landlords. Before you tell the person you call who you are, ask the following question: 'Do you have any apartments for rent'? If the person IS a landlord-- his usual answer will be either 'I don't have any apartments right now' or 'Yes-- I do have an apartment for rent' If the person listed as the alleged landlord doesn't respond in this way, then they are probably NOT the landlord, but most likely a friend or relative.

7)When you 'set the tone' up front from the first meeting, tenants will determine whether you are a professional landlord or professional pushover.

8) Make sure you do a complete tenant investigation, not just a credit check. This means, an employment check, a courts record check, a bankruptcy check, eviction check, rents vs income vs expenses ratio, and a credit check. There are companies that will do this for a fee. Either have the tenant pay for it and if you are going to pay for it, it will be tax deductible.
Instant Background Checks includes criminal background check, property value, lawsuits, judgments, bankruptcy, liens and much more!

9) Always get a lease and make sure you list all the people who will be living in the house or apartment.

10) ALWAYS give a receipt for the rent and keep a copy for your records.

Funny Humour to lighten your day

I Know This Laywer

A small town prosecuting attorney called his first witness to the stand in a trial-a grandmotherly, elderly woman. He approached her and asked, "Mrs. Jones, do you know me?"

She responded, "Yes, I do know you Mr. Williams. I've known you since you were a young boy. And frankly, you've been a big disappointment to me. You lie, you cheat on your wife, you manipulate people and talk about them behind their backs.

You think you're a rising big shot when you haven't the brains to realize you never will amount to anything more than a two-bit paper pusher. Yes, I know you."

The lawyer was stunned. Not knowing what else to do he pointed across the room and asked, "Mrs. Williams, do you know the defense attorney?"

She again replied, "Why, yes I do. I've known Mr. Bradley since he was a youngster, too. I used to baby-sit him for his parents. And he, too, has been a real disappointment to me. He's lazy, bigoted, he has a drinking problem. The man can't build a normal relationship with anyone and his law practice is one of the shoddiest in the entire state. Yes, I know him."

At this point, the judge rapped the courtroom to silence and called both counselors to the bench. In a very quiet voice, he said with menace, "If either of you asks her if she knows me, you'll be in jail within 3 minutes!"

Some provisions that Appear on a Lease are not Legal nor Enforceable

Some provisions which may appear in rental agreements or leases are not legal and cannot be enforced under the law. These include:

• A provision which waives any right given to tenants by the Landlord Tenant Act.

• A provision that tenants give up their right to defend themselves in court against a landlord's accusations.

• A provision which limits the landlord's liability in situations where the landlord would normally be responsible.

• A provision allowing the landlord to enter the rental unit without proper notice (for complete information on tenant's right to privacy, see page 9.)

• A provision requiring a tenant to pay for all damage to the unit, even if it is not caused by tenants or their guests.

• A provision stating the tenant will pay the landlord's attorney's fees under any circumstances if a dispute goes to court.

• A provision that allows the landlord to seize a tenant's property if the tenant falls behind in rent.

Deposits and Other Fees

When a new tenant moves in, the landlord often collects money to cover such things as cleaning or damage. The money collected may be refundable or nonrefundable.

Refundable Deposits
Under the Landlord-Tenant Act, the term "deposit" can only be applied to money which can be refunded to the tenant.

If a refundable deposit is being charged, the law requires:

• The rental agreement must be in writing. It must say what each deposit is for and what the tenant must do in order to get the money back.

• The tenant must be given a written receipt for each deposit.

• A checklist or statement describing the condition of the rental unit must be filled out. Landlord and tenant must sign it, and the tenant must be given a signed copy. (The Attorney General's Office offers a free sample checklist for this purpose.)

• The deposits must be placed in a trust account in a bank or escrow company. The tenant must be informed in writing where the deposits are being kept. Unless some other agreement has been made in writing, any interest earned by the deposit belongs to the landlord.

For information on returning refundable deposits when a tenant moves out, see page 16.

Nonrefundable Fees

These will not be returned to the tenant under any circumstances. If a nonrefundable fee is being charged, the rental agreement must be in writing and must state that the fee will not be returned. A nonrefundable fee cannot legally be called a "deposit."

While You're Living in the Rental Unit Landlord's Responsibilities Under the Landlord-Tenant Act, the landlord must:

• Maintain the dwelling so it does not violate state and local codes in ways which endanger the tenant's health and safety.

• Maintain structural components, such as roofs, floors and chimneys, in reasonably good repair.

• Maintain the dwelling in reasonably weather-tight condition.

• Provide reasonably adequate locks and keys.

• Provide the necessary facilities to supply heat, electricity and hot and cold water.

• Provide garbage cans and arrange for removal of garbage, except in single family dwellings.

• Keep common areas, such as lobbies, stairways and halls, reasonably clean and free from hazards.

• Control pests before the tenant moves in. The landlord must continue to control infestations except in single family dwellings, or when the infestation was caused by the tenant.

• Make repairs to keep the unit in the same condition as when the tenant moved in (except for normal wear and tear).

• Keep electrical, plumbing and heating systems in good repair, and maintain any appliances which are provided with the rental.

• Inform the tenant of the name and address of the landlord or landlord's agent.

• Set water heaters at 120 ° when a new tenant moves in.

• Provide smoke detectors, and ensure they work properly when a new tenant moves in. (Tenants are responsible for maintaining detectors.)

• Investigate whether a tenant is engaging in gang-related activity when another tenant notifies the landlord of gang-related activity by serving a written notice and investigation demand to the landlord. (See RCW 58.18.180 for details)

Important Note: A landlord is not responsible for the cost of correcting problems which were caused by the tenant.


Tenant's Responsibilities
Under the Landlord-Tenant Act, a tenant is required to:

• Pay rent, and any utilities agreed upon.

• Comply with any requirements of city, county or state regulations.

• Keep the rental unit clean and sanitary.

• Dispose of garbage properly.

• Pay for fumigation of infestations caused by the tenant.

• Properly operate plumbing, electrical and heating systems.

• Not intentionally or carelessly damage the dwelling.

• Not engage in or allow any gang-related activity.

• Not permit "waste" (substantial damage to the property) or "nuisance" (substantial interference with other tenants' use of their property).

• When moving out, restore the dwelling to the same condition as when the tenant moved in, except for normal wear and tear.

My Story of the Nightmare Tenant- What experts call the professional tenant.

My story:

I am in the business of renting. I have been a landlord for 27 years and yes I got burned as a landlord. I ended up with a professional tenant that ran me $7,000 in legal fees and $12,000 in rent arrears and I could not evict him. I learned the hard way. A very expensive lesson. Everywhere I turned just cost me more money. Even the lawyers I turned to did not know how to handle the case. The first lawyer I called brought in a Paralegal and charged me $786.00 for a one and ahalf hour consultation because he had no idea what to do. He sat in on the meeting with the Paralegal and myself. Since he had no idea of what to do, it cost me money for him to learn. The result, he sent a letter to the tenant threatening legal action, of which he had no idea what the legal action would be except to scare the tenant into paying. It did not work. When I received my bill $786 I asked for an explanation for the exhorbitant amount for one letter sent. His explanation of the fees: the paralegal charged $150 per hour while the lawyer's fee was $350 per hour. All they did was listen to my case with no idea of what to do.

My tenant knew all the tricks on how to avoid paying the rent and how to prevent eviction. We filled out all the legal N4 and L1 papers and they were all completed correctly, but he managed to avoid enforcement. Although the tribunal ruled in my favour he was able to avoid eviction.( I am purposely leaving out specific details as to how he managed to avoid eviction in order to prevent unethical tenants from using the same system.

I found another lawyer in another city that dealt with tenancy issues who knew what he was doing and his final bill came in at $7,000. After almost a year I was able to have the tenants evicted but no rent was paid for the past 11 months and my legal fees were horrendous. Although I was able to obtain a judgement in my favour, went through small claims court I was unable to recover any of my costs or rent arrears. My tenant went to jail for other reasons unrelated to my case. It turned out he was on parole at the time that I rented the house to him and he has since been charged with over 100 fraud charges- having to do with giving out checks with insufficient funds and so the checks would bounce.

Landlords are all alone when it comes to help with their problems.. There are sites where you have to register as a landlord. It is worth the registaration for your protection as well as the tenant. Since a credit check is being done, this will go on record that you are checking their credit. You should have the tenant sign a consent form. This form will protect you in case of privacy issues that clearly demonstrates that you had his/her consent for the check.

Credit Checks may not be enough to determine whether a tenant is a good risk or not. You need the full check that also confirms their identity and confirms if the information they provided to you matches what is on file.

Check out the State Laws for Tenant Landlords

Here's a great site for checking on the State laws. They have all the tenant Landlord laws listed for every single state; Here's the link :

http://www.uslandlord.com/laws/

Not only will it give you the laws for each state, but it will also give you the telephone number and department address together with a quick synopsis of what is required by both tenant and landlord. A coles note version in one easy page. It also allows you to go through the whole law if you wish. This is a useful link if you want to make sure that you are covered and know your rights as a landlord.

Rules to live by in order to succeed as a Landlord

Rule # 1)

Call your local Property Standards and or By-law enforcement office give them the area that your rental property is in (do not give them the exact address) and ask them the date you are required to turn the heat on and off.

Rule #2)
Thoroughly and extensively screen all potential tenants, using careful business practices and with full adherence to all governing laws, so that you do not rent to someone who will prove to be an inappropriate or problem tenant.Instant Comprehensive Background Checks. Search here for criminal records, property & business ownership, lawsuits, warrants, & more!

Rule # 3)
Confirm legal procedures and policies prior to doing tasks that you are not sure about.

Rule #4)
Cultivate a relationship with your tenant(s) based on honesty and openness - a relationship in which both you and your tenant(s) will seek to resolve disputes in an amicable and professional nature.
Remember if you don't, you lose because you pay court, or tribunal, and legal costs.
Also point out to your tenant, that if they don't work to settle they may be listed on Delinquent Tenant Database and their Credit Report may be updated to show delinquency.

Rule #5)
Read one book specifically in regards to Landlord and Tenant Laws, Acts and Regulations in your area, or find out one piece of information every month that will protect you as a Landlord.
Do not listen to the many myths and horror stories, most can be avoided if you take simple precautionary step

It Pays to Screen your tenants

It pays to screen your tenants. There are a lot of companies out there.  Check whether they do a criminal check in all 50 states, not just where your are renting.