5 Top Reasons Why Landlords Should Consider Using Small Claims Court for Dispute Resolution

The ongoing boom in property prices continues to put homes increasingly out of reach of most buyers. As such, the domestic and commercial sectors continue to drive great growth in the market among landlords and investors. 

From Airbnb to condo letting, from commercial properties to city and rural domestic lets, there is growing demand in the market. However, when there’s a legal issue or dispute, letting professionals should consider small claims as a quick and low-cost resolution ahead of more expansion options. 

There is plenty enough for landlords, investors and property managers to consider when running a portfolio of rental properties. Most don’t like the idea of adding lawyers and prosecutors to their list of expensive trades. That’s especially useful when legal issues can crop up relatively rarely during most rental operations, avoiding the need for retained legal advice. 

Among the many benefits of going the small claims route, property landlords and managers will find 5 key reasons to consider this approach. Typical cases include when there is rent owing, the landlord needs to claim possession, or the tenant is making unreasonable financial demands or claims. 

Note, before going to small claims or higher courts, always try mediation as a route to settling any dispute. And, if the amount in dispute is greater than $2,000 to $35,000 depending on the State, you will need to approach a higher court to deal with the case. 

1. A Quick Way to Resolve Disputes

Most property issues are down to non-payment of rent, and the Small Claims Court is a rapid and easy process to deliver justice. While any small claims court can have a backlog of cases, yours will typically be addressed in a few weeks, way faster than accessing the higher tiers of justice. 

Small claims courts around the world typically deal with a range of issues that a landlord may come across:

• Loss and damage to property
• Money owed as part of a rental contract or held as a deposit
• Compensation for personal injury on a property
• Breach of contract for trades, services or supply of goods 

2. A Low-Cost Way to Access Law  

Most small claims cases cost from $30 to $200 to bring, depending on the state and the type of case. For most landlord rent or repair claims in the $1,000s-range, that represents an effective method of resolving the problem and getting a binding agreement and enforceable judgement.

Given the repeatable nature of most small claims issues, once you’ve got your first couple of claims out of the way, you will be able to handle the process in a short period with the confidence of a positive result in your favor. 

3. Anyone Can Use the Small Claims Process

If you’re unused to dealing with the law, the small claims process is direct and simple. You can still use a small claims expert, if needed to provide the few documents required to process a case. 

The basic steps include: 

• Find your local small claims court, or the one with jurisdiction over the property
• File a case, completing a claim form with your details, those of the other party and the nature of the claim
• Submit the form, typically online and pay any filing fees to the court
• Notify the defendant that you are taking legal action
• Prepare any evidence you need to present the case
• Attend the hearing and present your case

4. The Deterrent Power of Small Claims

If a tenant doesn’t pay ahead of a small claims case, you will get a legal writ to collect the debt. You can deal with this and the tenant directly, or use a debt agency to collect on your behalf. If they can’t pay, you can arrange to garnish it from their wages over time, or find another agreement. 

Whatever the resolution, you can present your property investment or landlord business as one that deals firmly but fairly with disputes, reducing the risk of similar action by tenants. And as you can present a growing list of successful claims, tenants are less likely to take your business on in court. 

5. Small Claim Courts Stick to the Facts

There’s no room for emotional distress, punitive damages or additional factors in a small claims case. This helps keep the process lean and fast, which is to the benefit of landlords. Especially when dealing with tenants who veer to the hysterical or over-emotional approach when challenged over a debt or dispute. 
Whatever the case, property managers and landlords will find justice faster through the small claims court. For landlords involved in more complex disputes, including eminent domain issues, it may also be wise to get extra legal guidance on real estate transactions to ensure you receive fair treatment and just compensation.