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THE RUNDOWN

Is it worth it to pursue a delinquent tenant through the courts?

November 11, 2017

Getting a judgment for non-payment of rent is a lot easier than being able to collect.

 

So how to decide? 

 

It may be worth pursuing if:
1. There is a personal guaranty of the lease
2. The tenant relocates and continues to operate its business under the same name or related entity
3. The tenant that has multiple locations and closed only the location subject to landlord’s lease
4. If you want the judgement to send a message to other tenants that you will pursue damages claims in order to keep other tenants from defaulting.

 

It is probably a lost cause if:
1. The tenant doesn’t defend the lawsuit and knowingly permits the landlord to get a money judgment against them 
2. There are multiple judgments against the tenant and/or guarantor(s) then you may have to get in line behind the other outstanding judgments in order to collect. 
3. The tenant’s representative(s) and/or guarantor(s) are no longer living in the country. While you may be able to obtain a judgment, there may not be any assets or bank accounts to collect from.

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