How to Collect Unpaid Rent via a Collection Agency: A Step-by-Step Guide

As a landlord, dealing with unpaid rent is never easy, especially when a tenant leaves without settling their dues. In such cases, using a collection agency can help recover what is owed to you. Below is a detailed example and step-by-step guide on how to go through this process efficiently.

Example Scenario

Tenant Move-In: September 1, 2024
Issue Begins: Tenant fails to pay October rent.
Promise to Pay: Tenant promises payment by October 15 but fails to follow through.
RTDRS Filing: Landlord files for unpaid rent and lease termination with the Residential Tenancy Dispute Resolution Service (RTDRS).
Tenant Vacates: Tenant leaves the property on October 26 without a forwarding address.
Additional Claim: An extra month of unpaid rent is added to the RTDRS hearing for November, making the total claim exceed $2,000.
RTDRS Order: RTDRS issues an order for the tenant to pay the outstanding amount.
Filing at King’s Bench: The RTDRS order is digitally filed at the King’s Bench of Alberta.

Step 1: Serve the RTDRS Order to the Tenant

The King’s Bench of Alberta requires the RTDRS order to be personally served to the tenant. However, if the tenant cannot be located, follow these steps:

Apply for Alternative Service:
- Visit the Edmonton Court in person to request approval to serve the tenant via email.
- Provide evidence that the email address has been used by the tenant in prior communications.
Judge’s Decision:
- If the judge grants permission, proceed to serve the RTDRS order via the approved email address.
Affidavit of Service:
- After serving the tenant via email, complete an Affidavit of Service and submit it to the King’s Bench of Alberta to confirm compliance.
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Step 2: Contact a Collection Agency

Once the RTDRS order is processed and the service requirements are met, you can approach a collection agency to recover the unpaid rent. Below is the typical process:

Checklist for Collection Agency Requirements

Before contacting the agency, prepare the following documents:

RTDRS Order: Include all pages with the court stamp.
Affidavit of Service: Submit a copy confirming the RTDRS order was served.
Tenant Vacate Date: Provide the date the tenant left the property.
Payment History: Include details of any payments made after the RTDRS order was issued.
Rental Application: Provide demographic information such as previous addresses, date of birth, phone numbers, email, employment, and banking details.
Copy of Driver’s License: If available.
Forwarding Address: If known.
No Lease Required: A copy of the lease is not necessary for the collection process.

Steps with the Collection Agency

Initial Consultation:
- Share all required documents with the agency.
- Sign an agreement detailing the terms of the service.
Agency Charges:
- Collection agencies typically charge 35–50% of the recovered amount.
Collection Begins:
- The agency will handle contacting the tenant and pursuing the recovery process, allowing you to focus on managing your property.

Final Thoughts

While pursuing unpaid rent through a collection agency can be costly, it provides a chance to recover funds that might otherwise be lost. The process requires diligence in filing and serving documents, but by following these steps and working with a reputable agency, you can increase the likelihood of recovering what is owed.

By being organized and proactive, you can protect your rights as a landlord and ensure tenants understand their financial obligations, even after they’ve vacated the property.

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