This document summarizes a presentation on finding money owed from tenants. The presentation covered pre-lease investigations of tenants, proper lease documentation, handling tenant defaults, the eviction process, post-judgment collection options, and common mistakes to avoid. Topics included conducting thorough background checks, using personal guarantees, promptly serving default notices, enforcing judgments against tenants and guarantors, and developing a consistent collection strategy.

1. Finding the Money!
MSCA Learning Session
October 22, 2013
Presented by
Tom Jaeb
Heartland Investigative Group
George Warner
Warner Law, LLC

2. Presentation Agenda
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Pre-Lease Investigation
Lease Documentation
Tenant Concerns/Defaults
Evictions
Post-Judgment Phase
Top 5 Takeaways
Audience Questions and Answers
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3. Pre-Lease Investigation
“The What”
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Credit reports
Bankruptcy/Civil/Criminal/Judgment and Lien searches
Bank verification
Reference verification
Media/Internet scan
Confirmation of corporate status and good standing
Confirmation of principals of the business
Verification of collateral
Financial standing of guarantors
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4. Pre-Lease Investigations
“The Why”
• Determine the prospective tenant meets objective criteria for
leasing – uncovering any disqualifying information
• Searching for patterns of personal or financial instability, past
business dealings
• Assessing and confirming current financial condition of tenant
and principals, plus their known financial history
• Setting a financial “base line” for potential use in post-leasing
setting
• Avoiding liability – build out costs, lost rent income, damage
to facility or negative impact to other tenants
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5. Pre-Lease Investigations
“The How”
• Using detailed Personal Financial Applications with
appropriate FCRA/FDCPA and related release forms
• Ensuring appropriate “evergreen” clauses in original
application materials
• Due diligence on both corporate entity and all individual
guarantors
• Avoiding dependency on simple credit reports alone
• On-site versus on-line (the internet myth)
• Consider periodic monitoring/updates
• Use experienced agents
• Create a realistic, consistent, and documented program
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6. Lease Documentation
• Using an appropriate and up-to-date commercial lease
agreement (not that 1930s form no one – including your
attorneys – truly understands)
• Obtaining absolute, unconditional, and properly drafted
personal guarantees from everyone possible
• Ensuring appropriate follow-up efforts and file documentation
regarding all significant disclosed
• Engaging professionals to conduct appropriate background
checks in appropriate depth and scope given the transaction.
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7. Tenant Concerns/Defaults
• Ensuring close monitoring of chronic late payments, bounced
checks, switching accounts or other tenant “danger signs”
• Promptly and properly serving “Notice of Default” and
observing any appropriate cure periods
• Documenting the tenant’s file with all lease violations, even
minor conditions, to build the record for a cancellation if
ultimately necessary
• Beware any “hidden” lease provisions or conditions that could
enable tenant to fight cancellation
• Ultimately serve proper “Notices to Vacate” when called for.
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8. Tenant Concerns/Defaults
• If eviction becomes a reality - call your attorney first before
taking any specific action to talk the situation through
• Consider a pre-litigation asset search to determine the
prospects for collection
• Is tenant’s default an isolated incident; or, a developing
pattern of insolvency and eventual bankruptcy
• Determine likelihood of collection
• Determine validity of settlement offer
• Revisit the prospects of collection from any individual
guarantors
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9. Eviction: Top 5 Mistakes
• Using counsel that is not regularly in housing court or familiar
with the unique aspects of eviction
• Waiting too long to bring an action to recover the premises
• Failing to serve a proper Notice – hopefully multiple Notices –
when you expect a tenant will try to fight the action
• Accepting rent after bringing the eviction action (especially
from a new party!)
• Not accepting rent after bringing the eviction
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10. Post-Judgment Phase
• Ensure appropriate authorization to obtain financial
information on your judgment-debtors.
• Do you have a money judgment?
• Does it name the individual guarantors?
• Beware those federal statutes governing asset searches:
• Gramm-Leach Bliley Act (GLB)
• Fair Credit Reporting Act (FCRA)
• Fair Debt Collection Practices Act (FDCPA)
• Consumer or Commercial obligation?
• Is your time better served by using a professional service?
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11. Post-Judgment Phase
What
Why
How
Pull together known bank accounts
Garnish
Attorney garnishment or summary levy
Update credit reports
FCRA concerns? Ensure personal guarantee or
judgment
Databases/research/surveillance
Search for vehicles, watercraft, toys
Determine financial picture and
locate potential assets
Garnish W-2, 1099, or other
debtor income
Sheriff’s levy and execution sale
Search for real property
Foreclose or place lien on property
Conduct civil litigation searches
Determine potential assets
Intellectual property (trademarks,
copyrights, patents, contracts, software,
domain names, etc.)
Information on your subjects from third
parties
Levy on property and establish
leverage
Gather employment information
Additional information from
better/unbiased/cooperative
sources
Check DMV/DNR and verify location and
existence; Use Sheriff
Check national and local sources; Use Sheriff
Divorce, probate records; Plaintiff cases;
Potential employment or corporate affiliations
General research
Garnishment interrogatories; third-party
subpoena practice
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12. Post-Judgment Phase:
The Top 5 Takeaways
• Keep the big picture in mind – see the forest through the trees
• Create a consistent, documented program that makes sense
given the amounts in controversy and likelihood of collection
• Proceed in measured phases, build on each successive step
• Foster communication between the Creditor, Attorney and
Investigator for efficient and effective efforts
• Create a uniform strategy for collection so you do not have to
repeatedly reinvent the process or re-visit matters
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13. Questions and Answers
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14. Thank You
Tom Jaeb
Vice President
George Warner
Attorney at Law
Heartland Investigative Group
520 Nicollet Mall, Suite 520
Minneapolis, MN 55402
612-371-9255
tjaeb@heartlandinfo.com
www.heartlandinfo.com
Warner Law LLC
1515 One Financial Plaza
120 South Sixth Street
Minneapolis, MN 55410
952-922-7700
george@warnerlawmn.com
www.warnerlawmn.com
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