Bad Dept Collections
Boca Raton Property Management warns the consumer (tenant) in a letter to bring the account current, and if ignored, we then post the Bad Debt / Collections report to the Bureaus for a 1 time charge of $34.00 for each submission. We separate the charges ($12. for the letter and $22. for the posting).
If the consumer/tenant pays in response to the warning letter, we do not post the debt and the total charge is only $12.00.
A "Collections" posting like we use, is a much more serious event than a 30 day late payment to an account (like some other associations use). But it should be; 30 days late is already time for eviction with decent property management.
"Account" reporting we feel is inappropriate because the account needs to be at least 30 days late and is of little help to property management. It only remains on the credit report for 4 years, whereas “Collections” stay on the report for seven (7) years and severely affects the individual's credit record. Rather than simply a “late payment”, it is a “Bad Debt” .
The debt must be at least 30 days old, but the credit bureaus require that the money amount you report must be a final amount. That means the tenant must already be out of your rental, all costs and expenses totalled and the security deposit already dispersed or applied to the debt. You must also be able to provide proof of the debt with copies of a rental lease agreement, receipts, and a notorized statement from you of the full amount.
Credit for the article is given to the author and The Landlord Protection Agency, www.theLPA.com