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  • 1.  Collections

    Posted 06-01-2023 03:12 PM

    We are a new facility. Just wondering how you all handle non-payment from tenants who have moved out and taken their belongings.? For example, we have a couple who have moved out without giving notice and the contract states 10 day move out notice required, or tenant has moved out and left dirty and taken lock.  Is this worth pursuing?  Does anyone use a collections agency for these scenarios?  Thanks for the info!

    J Clint Robertson
    CLC Storage, LLC (Safe Simple Storage)
    Wichita Falls TX
    (208) 770-0829

  • 2.  RE: Collections

    Posted 06-02-2023 09:10 AM

    Our lease states that we have a $50 cleaning/dump fee. If they have a credit card on file and leave it dirty, we do go ahead and charge that fee. We also ask for a 10 day move out notice but we don't pursue it for collections if they move out and don't give us notice. If they are on auto pay and move out without telling us and the 1st of the month charges have already been processed, it's at our discretion if we refund that or not. However, the locks on the units are the tenants' at our facilities. If it is your lock you may try another avenue. Good luck!

    Terri Wood
    Executive Assistant
    Ideal Self Storage
    Waco TX
    (254) 301-4071

  • 3.  RE: Collections

    Posted 06-02-2023 12:26 PM

    Clint, I am just down the road in Bowie.  We have a $40 deposit on each rental unit up front.  I have had people move out without notice, people move what they wanted and leave the rest (JUNK) and I have had them just say "I'm gone and you can have the rest".  Just mark it up as a loss.  Sometimes (most times), your first loss is your CHEAPEST loss.

    Thomas Kent
    United Storage of Bowie
    Bowie TX
    (972) 672-2120

  • 4.  RE: Collections

    Posted 06-02-2023 02:43 PM

    Thomas Kent seems to follow my experience.  Chasing bad money is not worth my time.  Having them move out without an auction, lets me get the unit re-rented quickest.  I make money by having rented units.  

    Lester Strait
    Grande Self Storage
    Grapevine TX
    (817) 481-5796

  • 5.  RE: Collections

    Posted 06-02-2023 01:12 PM

    Following. Same issue essentially. Tenant moved in. Made the first payment. Next month, ACH payment was returned twice. Tenant paid a 3rd time and a few days later moved out. Third payment failed and they are long gone, no response.

    Ryan Stalling
    Steel Roots Storage LLC
    Waxahachie TX
    (972) 921-7309

  • 6.  RE: Collections

    Posted 06-02-2023 04:13 PM

    We have used a collection agency with very little success. You may try calling them to say they will be turned over for collection if they do not pay but good luck....

    Allen Kaiser
    Arena Properties LLC (DBA: Arena Self Storage
    Center Point TX
    (830) 634-3168

  • 7.  RE: Collections

    Posted 06-04-2023 08:10 AM

    Send them a 1099-C, Cancellation of Debt. Social Security number is not necessary, name and address are enough.

  • 8.  RE: Collections

    Posted 06-05-2023 02:02 PM

    Is a Third-Party Management Company a "Debt Collector" Under the Fair Debt Collection Practices Act?

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    The Fair Debt Collection Practices Act (FDCPA) was enacted in 1978 to protect consumers from abuse by debt collectors. The FDCPA defines a debt collector as "any person who regularly collects, or attempts to collect, consumer debts for another person…". A person is certainly not considered a debt collector when it seeks to collect its own debts under its own name.
    But what about a third-party management company acting on behalf of a property owner? Can a third-party manager seek to collect unpaid rent from an owner's tenants and avoid claims of being subject to the Act?

    Reynolds v. Gables Residential Services

    One such case was Reynolds v. Gables Residential Services, Inc.(Southern District Florida, 2006). In that case, the tenant, Reynolds, sued the property management company alleging violations of the FDCPA. The court found that while the property manager would "appear on the surface to meet the statutory definition of a debt collector", the claim by the tenant ignored the exclusionary language of the Act, most notably the exclusion for any person if such activity "is incidental to a bona fide fiduciary obligation".

    The court found that it was clear not only under the terms of the lease agreement but also based on the general relationship between the property owner and its property manager that Defendant Gables "had a fiduciary relationship and obligation…to manage the apartment property and collect monthly rent". Ultimately the Court held that the monies due from the tenant were payable to Gables "not as a debt collector but as Manager of the property."

    While that clarification is good news to property managers making calls to recover unpaid rent, the FDCPA still provides a number of clarifications regarding "best practices" when it comes to collecting a debt (even unpaid rent) from a customer that is protected under the Act.

    Understanding Debt Collection

    There is a lot to understand when it comes to debt collection practices. For example, a debt collector should not communicate with a consumer at any unusual time (generally before 8:00 a.m. or after 9:00 p.m. in the consumer's time zone) and calls should not be made to the consumer's place of employment. If the consumer has retained a lawyer, all calls should be made to the lawyer. Communications with a consumer should cease if the consumer requests that the debt collector stop communications; and the debt collector should not discuss the debtor's status with third parties without the debtor's consent (most rental agreements include an alternate contact or emergency contact section).

    Lastly, the debt collector cannot participate in any harassing or abusive practices to collect the debt (threatening violence or using profane language) and must not make any false or misleading representations about the collection of the debt (such as threatening criminal prosecution).

    As more and more property managers, especially in remote or virtual facilities, begin communicating with their tenants regarding unpaid rent, it becomes more and more important that the role of the property manager be made clearer, including the obligation of the property manager not only to rent the units but to collect the rent for those units. Property managers should include language in their management agreements specifying that any actions taken to collect rent are done pursuant to the manager's agreement with the property owner and that they are being delegated to do so on the owner's behalf.

    Stay Safe and Happy Storing!


    Read more from Scott Zucker and others on our Legal Department Page.


    Caroline Hart
    Owner/Property Manager
    X-15 Enterprises, LLC
    Jasper TX
    (409) 382-0266

  • 9.  RE: Collections

    Posted 08-22-2023 04:14 PM
    Edited by Tammy Wheeler 08-22-2023 04:16 PM

    Thank you! Paula Lash   1099-C...  I've been looking for a way to effect non-paying customers.

    Tammy Wheeler
    Co-Owner/Property Manager
    R&M's RV/Boat and Self Storage
    Whitewright TX
    (903) 815-5679

  • 10.  RE: Collections

    Posted 06-06-2023 08:30 AM

    Here's another resource on best practices for debt collection from TSSA Legal Counsel. When Tenants Stop Paying: Best Practices for Collections

    Kristy Spurr
    Deputy Executive Director
    Texas Self Storage Association, Inc.
    Round Rock TX
    (512) 374-9089

  • 11.  RE: Collections

    Posted 06-06-2023 11:13 AM

    Thank you, Kristy

    I received a lot of valuable input from your article and will use it when a situation arises for such a need. 

    Best regards,

    Caroline Hart

    Caroline Hart
    Vice President
    X-15 Enterprises, LLC
    Jasper TX
    (409) 382-0266