for rent sign

How I’m collecting from an ex-tenant who owes me money

for rent signI can non longer count the number of times that tenants have bailed on my rental units, leaving unpaid rent balances. In the past, my management company would chase them for a bit and, when they got tired of being ignored by the ex-tenant, they would send the amount to collections. We have never seen a dime of the money owed to us and every one of the tenants in question had their credit harmed for years in the process.

Yesterday, as I faced yet another tenant who left without giving proper notice and who therefore owed a balance, I got tired of entering into an obvious lose-lose proposition. This tenant, whom I’ll call Sarah, had been very pleasant to deal with in the past. While she was in our unit she paid rent directly to me on the first of every month, so I had a chance to exchange emails and pleasantries with her. After Christmas, when she encountered a cash crunch, she asked for leniency regarding the date of payments, and we agreed. She expressed her gratitude in emails saying how much she appreciated our willingness to work with her. So when she did not respond to our property manager’s emails asking to set up a payment plan for the remaining balance, I was disappointed – not surprised given my long experience with tenants, but nonetheless disappointed.

A different approach

As I stared at my computer, ready to confirm with our property manager that Sarah had not paid, I thought to myself, “This is madness. I’m repeating a process that I KNOW will not work – that’s ridiculous. There must be a better way to approach this.” I thought about the irony of the fact that I spend a good chunk of every day working to help women become stronger financially and here I was about to harm a woman’s credit file. I thought about the fact that it really saddens me when women keep making foolish decisions financially. If you owe money, ignoring the problem will not make it better. There is only one way out, and that’s by facing the problem and finding a solution. So what to do?

In that moment I made the decision to be very honest with Sarah, to share my discomfort about the position in which she had placed me and to urge her, as a fellow woman, to work to find an appropriate solution. This wasn’t about a landlord and a tenant, it was about one woman to whom money was legitimately owed – because after all, I still have to pay the mortgage, the property taxes, the insurance and the condo fees when tenants fail to pay – and a second woman who was likely in a bind.

Here is the letter, word for word, that I wrote to her. After the letter I’ll share the outcome.

“Hi Sarah,

I’m reaching out to you because the deadline for you to contact (our property manager) to make a payment plan for the outstanding rent for (the rental unit) was yesterday. I emailed (the property manager) this morning to see if you have reached out to her, but as I have not heard anything I suspect that you have not.

I’m writing to you using my personal email address so that you can see, from my signature, that my work outside of real estate revolves around helping women develop their financial literacy and become stronger financially. When women get into a mess of arrears and collections, it can affect them for years.

I do not want to send your file to collections and to pursue a legal judgment thereafter if we are unable to collect from you, but if you don’t cooperate I won’t have any choice. I told (our property manager) to be flexible in working something out with you because I want to help you. I cannot help you though if you won’t communicate with us.

This is one last message to urge you to reach out to (our property manager), copied on this email, to set up a payment plan. Even if it’s only a small amount every week, just set something up to address the arrears and to prevent this from going to collections, or worse. Once that happens your credit file will be negatively affected for years, and that may affect your employment, your ability to get credit or even be approved for a rental unit in the future.

I have attached a copy of the eBook that I wrote with my business colleague on how to improve your credit score. A good score is at the heart of being financially solid. This is my gift to you to help you out.

Now please get in touch with (our property manager) today. If we haven’t heard anything by tomorrow morning we will assume that you don’t intend to communicate with us and we will proceed with collections.

Best regards,


The result

This morning my property manager emailed me to say that Sarah reached out last night and asked to set up a payment plan. They are in the process ofpaid-invoice-1413750-639x426 working out an arrangement for the debt to be repaid within six month. We will receive the monies we are owed, albeit it over a prolonged period of time, and Sarah will avoid a nasty hit to her credit bureau report. She is also taking responsibility for a debt, something that bodes well for her regarding her future success. It’s a positive outcome for all parties.

I’m sharing this with you because it’s yet more proof to me that to solve problems sometimes we have to think outside the box and take a compassionate approach. If one path has not worked in the past, why not? Why will the results be different this time? In my case I had multiple examples of failure by going the route of having our property manager chase the tenants for money and then send the file off to collections only to end up in total radio silence. What did I have to lose by trying a different approach?

I wanted to connect with Sarah on a human level, to tell her that I genuinely care about her financial stability. Yes, I’m a landlord and yes, I certainly will use every legal tool in my possession to collect money that is legitimately owed to me, but I wanted her to know that I am willing to work with her to ensure that we do it in a way that doesn’t harm her. It’s an approach that demands accountability from my tenants but that shows flexibility in how we hold her accountable. I firmly believe that if we connect with people on a human level while dealing with business challenges, we can achieve a great deal more. I’ve seen it happen over and over again in my business. This incident with Sarah is just the latest example.

Too much lenience

As women we have a tendency to be very lenient and understanding when people fail to honour their commitments to us. I want to be very clear: this post’s message is that first and foremost, you need to stand firm for what is owed to you and then use your compassion to come up with a solution that holds the other party accountable in a manageable way. Let’s use our creativity and our compassion to get positive results for everyone.

For those of you who are wondering what will happen if Sarah doesn’t honour the payment plan, the outcome from my end is clear: I won’t hesitate to go to collections. As someone whom I respect once told me, the first time you fail it can be called a mistake. The second time it’s a choice. If Sarah fails a second time I will not be willing to be lenient. Her actions will speak louder than words. That said, I fully intend for her to follow through and succeed.

I would love to hear from you about a situation that you resolved by thinking outside the box or one where, in retrospect, you might have used a different approach. Please share your stories below.


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