@Anonymous wrote:I am looking for advice regarding how to handle a fraudlent debt that a former landlord sold to a collections agency. When I moved out of an apartment complex last year after 6+ years of residence, the property management company (a huge privately owned company with hundreds of properties) tried to claim that my $300 security deposit did not cover all necessary repairs to the apartment and sent me a bill for $700+. I called the property management company directly to dispute the validity of the charges. Since this isn't a lanlord/tenant forum, you'll just have to take my word for it that what the company agent said in "defense" of the charges was neither legal within the law of the state nor valid within the terms of the lease. They essentially were just making stuff up (example for the skeptical: they tried to charge me for the cost of repainting becuase "there wasn't any damage, but paint just normally fades over time from sunlight and cleaning products, and since you had lived there for 6 years, we needed to repaint, and that's why you were charged").
I told them I disagreed with the charges, that the charges did not comply with the terms of my lease (which--like most leases--expressly excluded charges for "normal wear and tear") and that I would not pay.
Several months later. I get a call from a collections agency. My former landlord has sold the fraudulent debt to a collections agency. I told the collections agency that I did not owe the debt, would not pay, that the debt was fraudulent and that they should not call me again. I then called the property management company AGAIN, and they kindly "offered" to remove only a $150 charge for cleaning (AFTER I sent them a receipt showing I had paid $350 for a professional cleaning when I moved out) and to recall the debt from the collections agency if I pad the remaining $500+. (I did confirm with the property management company that they had actually sold the debt, not just hired a collections agency to harrass me.) When I told the landlord I did not owe them any money and would not pay $500 or anything at all, the conversation ended.
The collections agency does not appear to have reported this to my credit reports.... yet. But I'm sure they will. Any advice on how to handle this fraudulent collections account?
UGH. The major problem you have is the time to dispute their laundry list of charges what when they withheld your security deposit. When a landlord creates a long list of alleged damages that are not accurate (and they often to do get former tenants to pay for renovations not repairs) you have to dispute it IN WRITING immediately via CMRR. If they do not back down then you have to sue for the return of your deposit in court where you force them to actually PROVE their damages. When you did not do any of this basically all your verbal protests amount to nothing and the charges are deemed accurate. You may still be able to sue under your state laws but you would need to check with a lawyer. You would also have to list the apartment complex and the assignee.
When I moved out of my apartment last year they tried to hit me with bogus damages as well. I immediately send notice in writing I disputed their claim and outlined why. One reason was under the law where I live a landlord has 30 days to return your deposit and/or send a letter detailing all damages and the cost(s). They failed to do that. They did not send it until 56 days after I moved out. Under the law where I live on day 31 I was immediately entitled to triple my deposit back. They tried to charge me for resurfacing the tub in the master bathroom. I reminded them that the apartment was completely renovated before I moved in. I demanded to know if resurfacing of both tubs was done at that time. When the tub(s) were resurfaced prior and if these were the original tub/showers installed on construction. I also pointed out that my move in inspection showed that I had reported yellow stains on the tub on move in 2 years earlier. That charge was removed. In the end all the damages were removed and I got a big refund from them including the triple damages on the security deposit. I also had pictures and video of the condition of the apartment when I moved out.
What proof do you have there was no damages beyond your verbal dispute with management?
@Anonymous wrote:I do have pictures, and I did dispute that I owed them in writing, though not in as much detail as I would have done if I'd realized what was going to come next. I just sent brief emails that were followups to phone conversations pointing them to various clauses in the lease. This seems like a huge gaping hole in the credit laws--landlords can just make up fraudulent charges and then send you to collections if you don't pay up? They charged me for cleaning the carpet AND alleged that when they removed the carpet to replace it they saw evidence of "pet stains" under the carpet. I did not have a pet. 1) Did they clean the carpet? Or replace it? It was at least a few years old when I moved in, so probably 10 years old by the time I moved out--i.e. beyond normal time to replace cheap apartment complex carpet, 2) if there was damage only evident when you pulled up the carpet, how could they possibly know that I did it instead of one of the previous tenants who lived in that apartment with that carpet?
The issue with suing them is that my problem is less that I believe they owe me money and more than I believe I do NOT owe them money. Can you even sue preemptively in small claims court? Or do I sue for the return of my security despoit and wait for them to countersue for the $700+ they believe I owe them?
What do I if/when the collections agency reports to a CRA?
Landlords cannot just make up baseless damages and bill tenants legally. They get away with it because most tenants fail to fight back. Those that do fight back usually win.
It isn't "pre-emptive" suing. When the landlord sends you a letter stating your deposit was $300 and they have $1000 in damages and after applying your security deposit as a credit you owe $700 you dispute formally in writing. If you cannot reach an agreement on what actual damages are (some landlords immediately back down like mine) then you file in small claims court for the return of your deposit. When in court they will have to prove that the costs they are seeking are from actual damages and are reasonable. Failure to do that means they cannot collect the balance they claimed in the move out letter.
FYI: carpet replacement is one of the biggest areas of fraudulent damages in rentals. ALL of the questions you ask are completely valid and why you sue and force them to answer those to the court. When they can't the court will toss those damages out. The life of most carpet in apartments is 5 years. Questions for court: When was the carpet installed? How many times was it professionally cleaned and when? Plus, all the other questions you asked.
Waiting until it is in collections after a year makes fighting now very very difficult. If they report to the bureaus you can dispute the charge the problem is YOUR dispute on why you don't owe it has nothing to do with credit reporting. The debt does exist even if it is not accurate in your opinion. I would start by calling a good attorney. They may have dealt with this with your particular landlord before.
@Anonymous wrote:Thanks. I didn't wait a year. I moved out in mid-September. It's only been a few months, and I was trying to deal with the landlord for most of October. During that time I was moving out of state and buying a home. One of the things I just realized is that this company also owns properties in the state I've moved to, which I believe means they can be sued in small claims court here instead of in the state where the apartment was (where I no longer live). Maybe they won't want to send someone from my old apartment complex to show up in small claims court in a wholly different state? The properties they own in my new state are also at least 2 hours away, i.e. not really convenient for them
Oh if only that were true. My instincts are telling me you lived in the other state, the apartment complex is there and therefore you would have to sue them there in that county. You REALLY need a legal opinion. If they have actually sold the debt (in which case they cannot recall it) then you have a major complication to suing over this.