Published Friday, February 10, 2023 by Alan Holdren

Rental property collections have grown drastically over the last decade in volume and the complexities in dealing with them. Many common issues exist for all owners. Atlas Services' experience is in both the commercial and the individual/family rental situations. There are some differences to explore in both how they are handled from a collection perspective and the rules governing them.

Commercial collections are usually simple straightforward breach of contract, non-payment or abuse to the property or all of the above rolled into one debt. The biggest challenge is sometimes identifying the entity owing the debt. Was it an individual with a company running out of the space, a company owned by someone not working there with a lease signed by a third party, or something else? When signing the leases make the person paying the bill sign the lease is the best rule of thumb. When these come to being collected on, do a couple of things in advance; one, get good numbers for a home office and some type of a personal guarantee if you can. Second, make sure you get bank information or at least keep a copy of one of their checks, so that a bank garnishment option will be in play when you have to go after them for back rent.

In dealing with individuals on rental property in Indiana, at least there are a couple things to consider. The first is what we call the 45-day rule 37-7-5-12, as always consult with your local attorney on all things legal. If you do not have a lease drawn up by counsel, please have your hand-me-down lease reviewed by counsel to make sure you are protected and have some valid enforcement power in it. The 45-day damage deposit rule states that you must provide a renter with an itemized copy of how a damage deposit was applied if one is in play with 45 days of the renter’s lease being terminated. This clock does not start ticking until the renter supplies the landlord in writing with a mailing address to which they can send the notice.

A couple things to keep in mind when looking at your rental collection policies, get signatures from everyone living there along with place of employments, forwarding address, social security numbers if allowable by law, relatives information, references and a copy of a check or bank information on all individuals, If dealing with minors, make sure you are getting parents or guardians signatures to hold responsible when the tenants do not pay you. You want to swing at everyone with everything, because they scatter after the fact and you have to go find those that owe you money.