5 Things Every Landlord Should Know About Small Claims Court

No one enjoys going to court, but due to the nature of the landlord-tenant relationship, there's no doubt that landlords will see their fair share of the inside of a courtroom. From watching daytime court shows, it may seem as if small claims decisions are a toss-up between who will win. This simply isn't the case, and landlords who understand the following nuances of the process have a distinct advantage in the courtroom.

Preparation is Key
Regardless of how sure landlords are that they're right, they have no excuse to not fully prepare for their day in court. Small claims cases should be treated seriously, because even a landlord who is right could lose a case if their case isn't presented properly.
Fortunately, small claims court isn't an improvisational routine. It's perfectly fine for a person to take notes into court that list all important points. Detailed notes should also be taken related to the occurrence that led to the court case. Finally, collecting canceled checks, bills, contracts, photos, and other evidence should be done long before the court date approaches.

An Appeal is Possible
After a small claims court decision has been handed down, it's important to remember that some states do allow for appeals of these decisions. This is important for a landlord to remember in any situation, considering the fact that a tenant also has the right to appeal if he or she ends up on the losing side.
Landlords will have to look at the laws specific to their state to find out whether or not small claims appeals are allowed. Even in states that do allow appeals, though, it's likely that the case will be denied if there wasn't a mistake by the judge in interpreting or applying the law.

Landlords Can Lose
The majority of landlords simply won't waste the time on a small claims court trial if they think they're wrong, but even going in fully confident that the law is on their side doesn't guarantee the landlords a victory. This becomes especially important when it's the tenant, or former tenant, who is suing for damages.
A landlord who is ordered by the court to pay damages could be ruined financially if they're not prepared for the loss. Fortunately, taking steps far in advance of court cases can help. There are several types of landlord insurance, for instance, that can be purchased.
Fortunately, some of these liability policies will cover court costs and awarded damages. Having this type of insurance can prove essential, so landlords should review their policies completely to ensure they're covered.

There Are No One-Way Streets
Regardless of whether landlords are taking their tenants to court or vice-versa, it's important to remember that it's not a one-way street. What this means is that the respondent in the case can counter-sue the individual who is suing them.
So for landlords facing lawsuits, it's smart to review the entirety of that specific landlord-tenant relationship to see if there's a potential for minimizing damages by counter-suing. Similarly, if something happened, unrelated to the initial filing, that could leave the landlord liable for damages, they need to remember that the tenant could strike back if they're sued in court.

Sometimes It's Not Worth It
It may seem counterintuitive, but taking a tenant to small claims court may not always be worth the trouble. Some individuals are known as "judgment proof," and this basically means they don't have the money to pay a judgment even if they were to lose in court.
Individuals with no job -- or a low-paying job -- and no assets are often considered judgment proof. A court can't place a lien on someone's assets or garnish an individual's wages if the person has neither. In the end, taking a person to court could result in losing even more money with nothing to show for it. This is a serious consideration that should be taken into account before filing a lawsuit.
Landlords often have the law on their side, but small claims court disputes can go south relatively quickly. This is why comprehending as much about the process as possible is key to success. By simply understanding the aforementioned truths, a landlord can get through the small claims process with level head intact.

POSTED April 09 2015 11:18 AM

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