Friday, December 10, 2010

Landlords Say They Lose Thousands To Bad Tenants

MANCHESTER, N.H. -- Landlords call it a growing problem in a down economy -- tenants getting evicted and never paying their back rent.

Some said the overdue money is nearly impossible to get back, causing some landlords to call for laws to be changed.

"To me, it's like a theft," said landlord Thomas Rudinsky. "They basically stole the money."

Rudinsky said an eviction can take months by the time a tenant is legally thrown out of an apartment and ordered to pay overdue rent. He said the tenant can then disappear, and it falls on the landlord to pay a collection agency.

"It becomes good money after bad money," he said. "You could spend $1,000 to collect $1,500."

Even if they're found, many of the delinquent tenants admit in court that they don't have the money, landlords said. By law, someone can't be forced to pay a debt that the person can't afford, so many landlords said they don't try.

"The goal is, if they don't pay rent, to get them out," said Ronald Dupont of Red Oak Apartment Homes. "Very kindly, very compassionately."

Dupont said he rents almost 1,000 apartments through his Manchester company. Each year, he said, he loses $60,000 to $80,000 in unpaid back rent.

"Once they leave, they just leave," he said. "I don't bother with it 99.9 percent of the time."

According to the New Hampshire Property Owners Association, the economy has caused more evictions and more unpaid rent. The group said it wants the court system to do more to enforce orders that tenants pay up.

"A judge is entitled to bring them up on contempt charges and jail them if they do not pay," said Debbie Valente of the NH Property Owners Association. "They don't enforce that at all."

Valente said that for some tenants, that's a license to scam. She said they're called "career tenants" -- tenants who will move in, stop paying rent and stretch out the eviction for months of free rent.

"There's no ramifications, no consequences," she said. "So why should a tenant pay?"

Judge Edwin Kelly, head of the district court system, said people are sent to jail for failure to pay, but in most cases, the former tenant is broke, and no action is taken.

Some argue that landlords need to be more careful choosing who they rent to. Landlords can pay for a screening service such as Landlord Connection in Merrimack.

The service weeds out bad applicants through court and credit checks and keeps a list of notorious tenants.

"We had one woman who was so creative," said Jeannine Richardson of Landlord Connection. "She used eight different last names."

But landlords already on the hook said they believe the courts should do more. Rudinsky is pushing for a state law that would require more court help in the collection process.

He said that if the state did more to track down old debts, it would be a boost to the state budget.

If I'm not collecting that back rent, this is lost tax revenue for the state of New Hampshire," he said.

There is no statewide estimate for how much the state loses each year on taxes it would have claimed on rental revenue. But some landlords said the cost can be so much that it drives them out of business.

"We are a necessity to the state," Valente said. "Yet you're breaking us. You're crippling us."

Kelly said he doesn't think there is more the courts can do. He said it's the court's role to issue judgments, not investigate former tenants.

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