Author Topic: "Online Collections" Collections from Property Management company for a rental.  (Read 3461 times)

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I am trying to clean up my credit report to buy a house next year.

I have a collections on my credit report from "Online Collections" on behalf of a Property Management company that I rented a house from.

The lady I dealt with at the Property Management company was nasty (starting when I asked her to get a couple windows fixed on the rental) plus they inflated the debt unfairly so I am trying to avoid paying the debt off.

I'll explain step by step:

(I'm in Florida).
Signed lease in June 2010 that included 1st month's rent ($600), security deposit ($600) and pet deposit ($200).
A year passes, I was late a handful of times. I asked her to repair a couple windows that wouldn't latch. She was about it.
Signed a new lease in June 2011, rent went up to $625. End of lease was noted as June 30th 2012. Both previous security deposits were noted on new lease. Lease included an Early Termination Fee / Liquidated Damages Addendum that said "I agree, as provided in the rental agreement, to pay $1,250 (an amount that does not exceed two months' rent) as liquidated damages or an early termination fee if I elect to terminate the rental agreement and the landlord waives the right to seek additional rent beyond the month in which the landlord retakes possession." This box wasn't checked on the first lease.

I fell behind in rent around may of 2012. In June I gave them notice that I intended to vacate the premises. I moved out the end of June.

In November 2012 they sent me to collections and the amount was $1,600. I remember receiving a letter where they noted a window on the back of the garage was broken. I don't have the letter anymore.

So I was behind in rent and moved out owing 2 months rent. But I didn't "Early Terminate" the lease exactly, I was there until the end, I just didn't pay them the rent for the last two months.

So they had $600 + $200 Security. I owed $1,250 back rent. That looks to me to be $450 owed plus whatever the window was (I can't remember). She noted when I emailed her that security deposit could not be used for back rents, but that specific language is not in the lease.

So what should I do? The mortgage lender I am working with wants this gone from my credit report but that's a lot of money to me.

I had a couple ideas:
1. Write an ITS letter with some language about fraudulent credit reporting (the $1,600 is way too much, no matter how you read the lease). I was thinking about writing it to both the property manager as well as naming the land owners themselves and basically saying that I was going to dispute this with the credit bureaus and that if they didn't confirm it I would not submit my suit.

2. Contact the collection agency and offer a settlement?

3. Get a lawyer and sue someone?

4. Should I try to get a copy of the letter they sent? How?
5. Something else?

I've read through these boards for months and have used what I've learned to help me get 3rd party debt collectors with old debts to stop calling. So I'm starting to get familiar with the basics but I'm just not sure which direction to head with this.

So any advice at all would be greatly appreciated.

Bruno the JDB Killer

  • Posts: 14304
Pay them or make a settlement, or you will not be getting a mortgage. If you go to court in Florida for this, bring a rope and the chair to stand on because they will just hang you. You will lose.

You have NO leverage. They are holding all the cards. ITS letters go into the garbage. No lawyer will take this because you have no grounds to sue anybody.

I just didn't pay them the rent for the last two months.

Explain this to a judge and see what he says.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.


  • Valued Member
  • Posts: 5
Fair enough.

So it seems reasonable that because I owed them $1,250 in back rent they can hit me for $1,600 and just ignore the $800 in security deposit?

I guess I'm lucky they didn't slap me with a cool million dollars or something since arbitrary amounts are acceptable.

Strictly speaking, I'll be getting a house regardless, FHA doesn't require that collections be paid off and the underwriter has made it clear we're okay either way....they just asked if I could make it go away, they won't require it. My scores are good enough without paying it off.

Anyway, is there anyone else with a second opinion?



  • Valued Member
  • Posts: 10750
Ok, they inflated the debt unfairly...

But did they inflate the debt illegally

You're going to have to prove that to have a case.

Listen to what Bruno is saying...It's not what you want to hear, but he's right on target.


  • Valued Member
  • Posts: 6
Why don't you offer to pay them what you actually owe, in light of the security deposit?

According to your own calculations, you owe them $450 plus whatever the window damage came to.

Did you offer them that, along with your explanation of why that's fair?


  • Valued Member
  • Posts: 3840
  • They forced arbitration into your contract. Use it
This will depend on how much time you have to deal with this due to your mortgage,  but the easiest first step you can take is to simply dispute this collection account with all 3 CRAs.  Just send a letter in writing CMRRR saying "the amount is incorrect, please remove".

You never know, sometimes this will just get removed without a fight.  However, that could take up to 30 days and then if it is not removed, you would still need to work out a settlement deal with the CA.

If you try to work out a settlement, I agree with the others above.  I would offer roughly $600 as settlement in full.
11 Arb Settlements (9 AAA, 2 JAMS)
3 JDB Suits Dismissed With Prejudice (2 pro-se, 1 consumer atty)
3 TCPA Settlements (2 pro-se, 1 consumer atty)
2 FCRA Settlements (consumer atty)
1 FDCPA Settlement (w consumer atty)
1 Small Claims Win (pro-se; Landlord/state consumer law violations)
1 State UDAP Settlement (ITS)
1 Federal PTC Settlement (before hearing; pro-se)


  • Valued Member
  • Posts: 449
You said you let them know in June you were moving out and moved out at the end of June. I am thinking you may not have given them 30 days notice so they are including July as rent owed as well. It will depend on what is in your lease but they may have a claim there. So that would be $1875 minus what you paid up front.

I would try to settle it. Did they send you a letter explaining how the up front money was credited, or even if it was? If they claimed early termination it may be in the language of your lease that you forfeit your deposit. If that is the case that is probably where the $1600 is coming from.

I think you may have a problem in that you are just now claiming the figures were not correct. It has been over 2 years.

Bruno the JDB Killer

  • Posts: 14304
If the mortgage company doesn't care if this is paid or not, that gives you more negotiating room. The amount has to be verified, of course, so you aren't overpaying. Make sure you take advantage of the homestead law in FLA.

You don't want to ignore this and let it go to a judgment, because then you are subject to a bank levy and or wage garnishment. 
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.


  • Valued Member
  • Posts: 5
Thank you everyone for your advice. I have until maybe July of next year as I'm in a lease now. I don't have to clear this up, as I mentioned it wont kill the deal, but I'm sure I'll be paying for it in interest rates or something. Also, I've managed to clean almost everything else up...left these people until last because I was angry with them.

They (the CA) are not actively pursuing this. Never sent any letters nor called me, just posted to my credit report. This gives me a weak hand as it forces me to approach them with a settlement rather than responding to them. I think anyway.

I will try to do a settlement but I think I will try to dispute it with the CRA's first and then if it's still there in a couple months I'll try to negotiate. Trying to guess whether this (disputing) will make them more resistant to settling than they otherwise would be is probably fruitless.

Just Plain Bill

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Anytime your buying a house, old debts will have to be paid off to qualify for a home mortgage.
I Donated


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Sorry, that's simply not correct Bill.

Depends on the mortgage company. And as I said, FHA doesn't require them to be paid off if they are minor.

I already have approval. Just looking to improve my rate a little.


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  • Posts: 272
Three years ago I owned a house in TX and decided to buy another house through USDA. At that time I owed two debts totaling a bit more than seventy thousand. It was on my CR, Santander was one of them, yet I got a loan at a hundred per cent no money down and low interest. All the old debt did was raise my interest about two points.


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Just to follow up, I disputed this in January and it's since been removed from all 3 reports. Thanks for your help everyone.