Can a landlord pursue the inheritance of a personal guarantor on the lease?
Full Question:
Answer:
A guaranty is a separate contract under which one person agrees to pay a debt, such as rent, or perform a duty if the other person who is bound to pay the debt or perform the duty fails to do so. Usually, the party receiving the guaranty will first try to collect or obtain performance from the debtor before trying to collect from the one making the guaranty (guarantor).
In the case of rental property, in order to collect past due rent, the landlord would have to bring a lawsuit against tenant and/or the individuals who guaranteed rent payment.
This lawsuit would be separate from any eviction proceeding brought by the landlord to regain possession of the leased premises.
Following an eviction (presumably for breach of lease for non-payment of rent), the tenant in most lease agreements will be held responsible for the remaining rent owed under the lease. However, the landlord has the obligation to make reasonable efforts to re-let the property so as to mitigate the damages.
If the landlord cannot re-let or re-let it for less than the prior rent, he may bring a civil action to collect the money lost.
If successful in obtaining a judgment in the amount of the oustanding balance of the rent, plus fees, that judgment could be enforced against the defendants. The judgment creditor (landlord) will try to collect from any assets held by the judgment debtor (personal guarantor).
The typical methods employed in enforcing money judgments include:
"Voluntary" Compliance - Very often a judgment debtor will pay the money owed to a judgment creditor and thus satisfy the money judgment. If the judgment debtor does not pay, the judgment creditor should contact him/her and ask for payment. Sometimes a simple telephone call or a short letter yields results, sometimes a lien or execution is required.
Judgment Lien - A lien is a charge, security or encumbrance on a piece of property. A judgment creditor can place a lien on both the real and personal property of the judgment debtor. When property subject to a lien is sold, either a portion of the proceeds are used to satisfy the outstanding lien or the property is sold subject to the lien.
Execution and Levy- Execution of a money judgment is obtained through a legal process of enforcing the judgment by seizure and subsequent sale of the property owned by a judgment debtor.
Wage Garnishment - a form of execution and levy, a legal process of enforcing a money judgment by directing the employer of a judgment debtor to pay a portion (typically up to 25% for a money judgment or up to 50% pursuant to a order of payment of support) of wages earned by the judgment debtor directly to the judgment creditor.
When a judgment debtor refuses to pay a money judgment, a judgment creditor typically will proceed with both judgment liens and execution to enforce the judgment.
It may be beneficial to you to consult with a local attorney or credit counselor who can assist you in attempting to negotiate with this creditor.
