Collecting a Judgment By Levying A Landlord Security Deposit

I am not an attorney, I am a Judgment and Collection Agency Broker. This article is my opinion, from my California experiences, and laws vary in each state. If you want a strategy to use or legal advice, please contact a lawyer.

Your judgment debtor is sneaky, and does not work at a conventional employer. You can't find their bank account, and the debtor seems to work for cash. But, they rent a nice place, and they put in a security deposit to the landlord. Is there a way to levy on that rental security deposit? The answer is maybe.

Everything depends on which state, which county, which judge, which judgment debtor, the landlord, and the steps you already took to enforce your judgment.

To levy on the judgment debtor's rental security deposit, you would buy a writ of execution from the court, and pay a sheriff serve the levy. The levying officer sends the judgment debtor a copy of the memorandum, and serves the landlord with the third-party levy.

The renter's paid security deposit, is not their sole property, until after the landlord refunds it (if any remains) to them. The landlord may own some or all of the deposit, when the lease or rental ends, for unpaid rent, damages, etc.

One may serve the landlord with an order, to levy the money owed to the debtor. But, at the time of service, there is no money due, because they are still renting the rental.

Most of the time, security deposits are not returned to judgment debtors. The debtor will know their security deposit was garnished. When they move out, they often do not pay their last rent payment, which leaves the creditor nothing. Sometimes the security deposit is actually the first and last month's rent, which also leaves the creditor nothing.

Garnishment a rental security deposit of commercial renters judgment debtor can work better, because the deposit requirements are higher, with more restrictions.

Garnishment a renter's security deposit is usually a weak enforcement tactic. Usually, one gets better results when you serve the landlord an information subpoena, requesting requesting copies of the rental application and the front side of the last check received for the judgment debtor's rent.

This might lead to an employment or a banking lead. Of course, some judgment debtors pay with money orders and debit cards. One might find the judgment debtor is a Section Eight renter, which means the debtor might be judgment-proof.

In California, CCP 695.030 is a somewhat vague law. Whether this law applies to rental security deposits is debatable. If the landlord or another valid party contests your claim, it is best to drop the issue, unless the deposit is big enough to fight for in court. Not opposing valid claims, and simply dropping them, might be a good general policy.

If you wish to argue in court about your right to the judgment debtor's rental deposit, you might bring up CCP 701.020. Arguably, the security deposit the landlord holds is, by law, property of the debtor, held by the landlord, and therefore subject to levy. See CCPs 699.710, 695.010, and 1950.5.

A debtor could replace a depleted security deposit. If a debtor is a sneak, and you document some other methods you tried to recover the judgment, and showed how the judgment debtor is uncooperative; some courts might permit a rental deposit levy.

There can be one more reason to attempt a levy a rental security deposit, if you maintain a policy of never challenging landlords on this issue. It might change the landlord's attitude about their judgment debtor renter. There have been cases of judgment debtors paying off judgments within a week of a levy served on the landlord for their security deposit. This is not just a coincidence, but your mileage can vary.


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