Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

Real Estate Education: When is Litigation Necessary?

Written by Than Merrill

Will a proper real estate education inform landlords when it is appropriate to pursue litigation against unruly tenants?

Is pursuing litigation really necessary for landlords, and if so, should they haul tenants into court for property damage, failure to leave or neglecting to pay rent?

Accordingly, a real estate investor recently posed the question in a popular online real estate forum as to whether or not they should take a previous tenant to court for not paying the last month’s rent.  While subjective, how can you tell when litigation is necessary?

These are situations that are not often covered in the most basic of real estate education courses. However, they arise when investors get out on the playing field. So what should you do if you find yourself living out one of these frustrating scenarios?

Recognize that there are several factors to consider when facing a situation such as this. A good preliminary qualifying question to ask yourself is whether or not suing a tenant will stop the problematic behavior?

Whether it is a renter allowing a property to fall into disrepair, paying the rent late, damaging property on exit, or sneaking out without paying the last month’s rent; real estate investors can either tap upfront money received or they can easily take a renter to small claims court.

However, this doesn’t automatically mean that you should. Blame aside, starting a lawsuit can be expensive, time consuming, and bring a whole lot of negativity that can sap other real estate investing efforts.

Your reputation is always at stake.  So remember that it won’t take much for an angry tenant to stir up trouble at a local news station with claims that you are a shady landlord.

Finally, give serious thought to whether or not this is the type of behavior and industry you want to create and encourage. There is already enough unnecessary litigation flooding our courts.