Options for Collecting Back Rent

[Ross321]

Jurisdiction

Colorado

We recently evicted a tenant at a commercial property for non payment of about $30k of back rent. I've asked several times what his plan is for repayment, not surprisingly, he indicates no plans. Just hoping we'll give up.

I think he does not currently have enough cash to pay, but he will be selling his house soon. The lease contained a personal guarantee. I'm wondering if this might be our only opportunity to collect. We've never had a bad tenant before, so no experience in this process. Is there a way to file a lien or otherwise route some of the home sale proceeds to this back rent debt?

If not, any advice for attaching future wages? Just no idea how to proceed.

thanks

 

[army judge]

Is there a way to file a lien or otherwise route some of the home sale proceeds to this back rent debt?

If not, any advice for attaching future wages? Just no idea how to proceed.

I suggest you speak with a couple local attorneys.

If a person is struggling financially, he/she can always file a bankruptcy. Should your former tenant do that, you'll never get one, thin dime.

Bottom line, after speaking with a couple local attorneys, you'll know what MIGHT be possible.

 

[adjusterjack]

We recently evicted a tenant at a commercial property for non payment of about $30k of back rent.

How did you let it get that far?

Is there a way to file a lien or otherwise route some of the home sale proceeds to this back rent debt?

If not, any advice for attaching future wages?

You will have to file a lawsuit and get a judgment before you can do any of that.

Were you not able to get that amount including in your eviction judgment?

Just no idea how to proceed.

That's what lawyers are for.

 

[Zigner]

How did you let it get that far?

For a commercial lease, that could easily be just a month or two of back rent.

 

[Tax Counsel]

I think he does not currently have enough cash to pay, but he will be selling his house soon. The lease contained a personal guarantee. I'm wondering if this might be our only opportunity to collect. We've never had a bad tenant before, so no experience in this process. Is there a way to file a lien or otherwise route some of the home sale proceeds to this back rent debt?

Who was the actual tenant, the person you were dealing with (lets call him Bob) or was it a business entity, like a LLC, LLP, corporation etc?

If you did not get a mortgage lien on the home as security for the rent then the only way you'll be able to attach the proceeds of the home sale is to sue Bob on his personal guarantee of the business debt (assuming it's well enough drafted to hold up in court) and get a judgment for the debt. Then you'd record an abstract of that judgment in the county where the property is located. You'd need to do all that BEFORE the sale goes through to be able to attach the funds at the settlement table.

If not, any advice for attaching future wages? Just no idea how to proceed.

You may also use the judgment to attach his bank account, garnish his wages, attach the judgment to his new home, etc.

I suggest you see a Colorado civil litigation attorney ASAP to get started. When it comes to collecting money from possible dead beats the general rule is that the faster you take action to collect the better chance you have to collect what you are owed. If he's got other creditors you want to be first in line to claim assets, not last.

 

[zddoodah]

We recently evicted a tenant at a commercial property

Is the tenant an individual or a business entity (e.g., a corporation or LLC)? Sounds like it's the latter, but it also sounds like the individual personally guaranteed the lease. Correct?

he will be selling his house soon.

How do you know this?

Is there a way to file a lien or otherwise route some of the home sale proceeds to this back rent debt?

You'll need to sue. If you win and get a judgment, you can put a lien on the judgment debtors' real property. You might be able to obtain a prejudgment writ of attachment. Seek counsel and don't wait.

 

[Ross321]

Tax Counsel, thanks, great information