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Can landlord send move-out debt to collection agency without notification

The dreaded move-out date arrives and the one thing on your mind is the security deposit. What happens when you don't get the security deposit back plus the landlord sends a balance to a collection agency that reports it on your credit files.

On June 2017 I co-signed for my boyfriend now husband for an apartment. His lease was up on May 14, 2018, we gave our notice on time and left by that day. At the initial of the move in, they required a $350 cleaning deposit non-refundable & an additional $500 refundable for damages.

When he left the apartment and turned in his keys he asked about the deposit and the worker told him “oh yeah don’t worry about you’ll get the refund back” and my husband asked if there happens to be any balance you guys will call? & he says “oh yeah don’t worry we call but you should be fine you should get your deposit back”.

Now by mid-September we get a notification that our credit took a hit and we have an account in collections and come to find out it’s from the apartment. We went down to talk to some phony about it and all they said was there was more damage to the apartment while the majority was just cleaning as the carpet had stains. We got nowhere with them, they stated if we did a walk through after leaving because that’s what they usually do, once we let her know no one gave us that option or told us anything about that she then said “well it’s not required, and we won’t call you to ask you”..?? Makes no sense.

Aside from that we never received any sort of notification through email or phone call by the apartments that we had a balance, they stated they usually mail the paper work but since we didn’t provide a forwarding address they’ll mail it to the last address on file which makes no sense as it’s their own address we’re moving out of. We weren’t made aware of the balance or got no notification for it whatsoever. What do you recommend our best option is?

When you move out of an apartment there are several steps a landlord should take. It appears as though some steps were missed, in which case the debt you are now being assessed should be reviewed by an attorney.

Option 1: Review your local city and state landlord/tenant laws in respect to the refund of security deposits. Laws can differ from state to state but typically the landlord is responsible for providing a list of damages and estimates/receipts for repairs within a particular number of days of the tenant moving if they aren’t going to return the full security deposit.


In most states the landlord must send you a letter stating exactly what they’re going to withhold from your security deposit for damages plus any damages the landlord is going to assess over that amount. If proper steps were not followed upon move-out, you may have grounds to sue the landlord; or, at least use it as leverage to call off the collection agency.

That letter must be sent to the forwarding address that you provided them. In some states if a landlord cannot prove they mailed you a letter stating the damages and amount owed, they may owe YOU for damages. If landlord/tenant laws have been violated, you may be able to have the negative notation on your credit reports deleted due to violations of the Fair Credit Reporting Act and Fair Debt Collection Practices Act.

There appears to be several laws (landlord/tenant and credit laws) that may have been violated. That’s why I say contact an attorney in your area. Many states have consumer law attorneys that may give you a free consultation. You can also check with your city or state housing office for advice.

Option 2: While it's legal for a collection agency to place a debt on your credit reports, without prior notification, there are actions you can take. Request debt validation from the collection agency. Demand all written documents including ORIGINAL lease, payment history, and final walk-through paperwork, with your signature.

Option 3: Consider a pay for delete offer. Offer full payment in exchange for deletion; or, negotiate a settlement for less in exchange for deletion. The collection agency may counter with the option of reporting the debt as paid or settled for less. The problem with this is that it would not help your credit scores. The debt would remain, even though paid, on your credit report for up to 7 years.

The best of luck to you.

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