That Time a Tenant Tried to Sue Me

Lessons from My First Big Property Management Dust-Up

Quick Summary:

• Managing your own property will teach you more than any book ever could

• Good tenants can turn into stressed-out monsters overnight

• The law matters—but so does how well you document things

• You will get stressed. That doesn’t mean you did something wrong

• Oversharing with tenants can backfire—less is more

Starting Out Small

When we first got into real estate, we started small—just two single-family homes. We used a property manager because, honestly, we didn’t know what we were doing.

That whole first year, we were mostly watching and learning:

• How does rent collection work?

• What counts as maintenance?

• What’s the property manager actually doing?

By the end of that year, we were feeling more confident. So we bought a duplex and decided to manage it ourselves.

The Big Leap

It felt like a huge step—twice the tenants, twice the issues, and no backup. But we figured: if we ever wanted to scale, we needed to understand what really goes into property management.

At first, everything was smooth.

The tenants were friendly.

Rent came in on time.

Maintenance requests were light.

I was starting to think: Hey, maybe I’m actually good at this.

Then One Tenant Moved Out

This is where the story changes.

Up until that point, I’d been doing the “nice landlord” thing—friendly, honest, transparent—figuring that if I treated people well, they’d treat me well.

And they usually do.

But money stress changes people.

She had just bought a house—let’s call her Betty—and I think Betty stretched her budget to the max. Moving is expensive. Buying a home is expensive. And I think she was counting on getting her full deposit back to help cover the cost.

She didn’t.

The Damage Report

The unit was a mess:

• Dirty walls

• Damaged drywall

• 100+ wall anchors left behind

• Beat-up kitchen

• Pet mess in the carpets

It cost about $1,500 to fix. Her refundable deposit was $1,900, so I sent her back about $400, along with a full breakdown.

I did everything by the book and then some:

• Provided an itemized accounting

• Billed based on the move-in report

• Included before-and-after photos

• Sent it all within the 21-day deadline (the law at the time in Washington)

She Freaked Out

She got the paperwork on Thursday and, by Friday afternoon, went nuclear.

She called me up:

• Screaming

• Threatening to sue me

• Claiming I was stealing from her

• Saying she’d go after me and my wife

• Threatening to come to my house

We had been on friendly terms before, so this was a complete shock. And it made for one of the most stressful weekends I've had in a while.

The Legal Reality Check

Because this all blew up late on a Friday, I couldn’t get ahold of my lawyer right away. So I spent the whole weekend wondering if I’d done something wrong—if I was legally exposed or about to get pulled into some messy lawsuit.

It was one of those weekends where your brain just won’t let go, no matter how many times you tell yourself, “I think I did everything right.”

Finally, on Monday, I got on the phone with my lawyer.

He asked me just three questions:

1. Did you provide a full accounting of the charges?

2. Did you have a move-in condition report?

3. Did you send everything within 21 days?

Yes. Yes. Yes.

He said, “You’re fine. This happens sometimes. If she actually takes it to court it'll be one of the shortest sessions you've ever seen.”

A few days later, Betty’s lawyer reached out asking if I was willing to get on a call. I passed his info to my lawyer. They spoke briefly.

Thankfully, he was reasonable and not trying to milk things.

He asked the same three questions, got the same three answers, and told Betty: “You have no case.”

About a week after that, Betty deposited the reduced refund check. I haven’t heard from her since.

It's crazy how financial stress can drive people to make expensive decisions that don’t actually help them.

So, What’s the Lesson?

If you want to scale your rental business, you’ve got to get your hands dirty at some point. Manage your own property for a while.

Learn how to:

• Talk to tenants

• Handle maintenance

• Collect rent

• Protect yourself legally

And here’s another big one I learned the hard way: less is more when it comes to communication.

With Betty, I made the mistake of being too open, too transparent—thinking it would build trust. Instead, she tried to twist and use my words against me when things didn’t go her way. Since then, I’ve learned to stick to the facts. Do what’s legally required. Don’t overshare. Keep communication clear, minimal, and documented.

You don’t need to do it forever. But do it long enough to understand the moving parts.

This story was stressful. But the experience for me?

Invaluable.