1. Not evaluating whether you really have a case.
Whether you are the party seeking damages or the party presumed to owe money, you must know:
The ins and outs of your lease agreement
The laws in your state
Does your lease state that you, the tenant, must give notice in writing 30 days before moving out, and you never gave it? Does your lease state that you, the landlord, must do requested repairs in a timely fashion but you never did? Honestly evaluate whether you have violated the terms of the contract.
If you didn’t sign a lease, or if the issue is outside the scope of your lease, look into your state’s landlord-tenant laws, as laws vary by state. Not only that, but some states, like Florida, are known to be landlord-friendly, while others, like New Jersey, are known to be tenant-friendly. Knowing this may help you decide whether you even want to pursue the matter. Ask yourself if it’s worth the time and money.
Settling the matter out of court is the ideal situation, if you do choose to pursue it. If you cannot come to terms with the other party between the two of you, consider arbitration or mediation.
2. Not knowing the difference between a real lawsuit and a mere threat.
Sending a letter is often the first step in cases like these. The party requesting money can write the letter, or better yet, get an attorney to write it. The letter should state the amount of money being sought, what for, and when it is due. Advise that you will take legal action if you do not receive the money by that date.
But a letter is not a lawsuit. If you send such a letter, don’t expect it to work immediately, if at all. If you receive such a letter, don’t be pressured to pay right away. Consider that amount the opening bid, and discuss the matter further. Ideally, you’ll both reach an agreement and that will be the end of it.
3. Not getting legal advice.
If the letter isn’t effective, mediation and arbitration have failed, and you are sure you want to pursue this, file a suit in small claims court. Go to your county court and speak to a clerk who can help you file the suit. Limits for claims vary by state, but most are under $10,000. The party being sued should countersue at this time if they believe they are owed money.
Because the amount of money being sought is fairly low in cases like these, the hourly price of an attorney will likely not make it worth it to you to hire one to represent you (and some states don’t allow attorneys in small claims court anyway). But an hour or two of advice to help you prepare can be worth it. Your attorney will discuss your case with you, give you advice on how to present your side in court, and tell you what documents to bring, among other things.
Avoid Being Sued in the First Place
The simplest way for tenants and landlords to avoid the chance of a lawsuit is to always sign a lease, read the lease closely, and live up to it. Both landlords and tenants need to know their rights as well as responsibilities.
Have renters sign a lease. Make rules clear about subletting and who is responsible for what. The lease should limit your culpability to the amount applicable by law, and no more. (Landlords should also get landlord insurance to protect them.)
Maintain the property and make requested repairs on time. Your lease should make provisions that tenants are required to notify you of things that need repair (so that they can’t use that as an excuse to leave without giving proper notice) and that you can enter the apartment with proper notice in order to make those repairs.
Be nice to tenants! They are more likely to sue if you have a bad personal relationship.
Pay rent on time. If you must pay in cash, get a receipt for your records.
Detail damages before moving in and keep the property in good condition. The security deposit you paid is only to be used for damages, so if you can show that you didn’t cause anything beyond normal wear and tear, you are entitled to receive your security deposit back once you move out.
Notify your landlord of problems in writing and request prompt maintenance. If possible, show that you weren’t responsible for the damages.
Give required notice to vacate in writing. Your lease will state how much time you have – usually 30 or 60 days.
Be nice to your landlord! If you suddenly have to move and you don’t have 30 or 60 days, and you are willing to help find a new renter, then maybe your landlord can work with you and let you off the hook for the remaining rent instead of suing. If your relationship has always been contentious, this will be more difficult.