Being a landlord is often a balancing act, and one of the most challenging parts of the job can be dealing with tenants who consistently pay their rent late. The frustration of frequently seeing “past due” notices can be overwhelming, especially considering that a tenant’s rent payment is part of your income. However, before you take action, it's essential that you know there are several strategies you can implement to handle this situation effectively. Here are some steps you can take when you find yourself in this predicament.
1. Review the Lease, Local Laws, and Payment Records
First things first, you'll want to revisit your lease agreement, local regulations, and payment records. It may seem like an obvious step, but it's crucial to make sure that the payment is indeed late. This involves checking your records and receipts and confirming the due date stipulated in the lease.
Understanding your local laws is also pivotal. Each state or city might have different regulations when it comes to late rent payments, grace periods, and eviction processes. Make sure you're familiar with these rules to avoid any legal complications down the line.
Lastly, consider your grace period. If you've specified a grace period in your lease, you're legally obliged to observe it. So if a tenant pays within this period, technically, they're not late.
2. Talk One-on-One with Your Tenant
Once you've confirmed the payment is late, contact your tenant. A phone call usually works best - it's direct and personal. If you can't reach them on the phone, an email will do. This conversation serves as a verbal late rent notice and gives you a chance to understand what's going on with your tenant.
While consistent late rent payments may be frustrating, remember that you’re trying to find a solution, not take your irritation out on the renter. Keep the conversation professional and limit yourself to one call or email. You don't want to give them the impression that you're trying to bully them into paying.
3. Create a Payment Plan
If your tenant is going through financial or personal difficulties, consider setting up a payment plan. A payment plan can involve breaking down the rent into manageable installments spread over a specified period. Let's say your tenant can't pay the full rent on the first of the month. You could agree to them paying half on the first and the rest on the fifteenth. This way, they get some breathing room, and you still receive the full rent amount, just a bit later than usual.
It's important to remember that while you're showing understanding, this is still a business transaction. So, make sure to put this payment plan agreement in writing. It doesn't have to be anything overly formal—a simple document outlining the terms of the payment plan will do. Include details like the amount of each installment, the dates when each payment is due, and any late fees if applicable.
Having this agreement in writing helps avoid any misunderstandings or disputes down the line. Both parties know exactly what's expected of them, which can prevent a lot of headaches.
4. Give Tenants an Easy Way to Pay Rent
Making life easier for your tenants can go a long way in ensuring timely payments. If renters have to jump through hoops just to submit a payment, they might be less inclined to do so if they’re stressed, tired, or trying to pay last minute. Offer an easy, streamlined platform instead.
Apartments.com offers an online rent collection platform that can streamline the payment process for both you and your tenant. Renters can set up automatic monthly rent payments through bank account, credit card, Apple Pay, or Google Pay, so they won’t have to worry about remembering to hit submit.
5. Send Rent Reminders
Sending out rent reminders can also be helpful. A gentle nudge a week or a few days before the rent is due can prevent late payments. When it comes to crafting these reminders, being professional and courteous goes a long way. A harsh or demanding tone may strain your relationship with renters. Instead, opt for a polite and friendly message.
While sending these reminders manually each month might seem like a lot, there are plenty of tools available that can automate this process for you. Through Apartments.com, you can send automated rent reminders to tenants via our online portal. If a tenant happens to pay rent late, you can also view that information through their resident profile and act accordingly.
6. Send a Late Notice, Too
If the rent is still not paid on time, don't hesitate to send a late reminder. This should clearly state that the rent is overdue, list any additional fees incurred, the total amount now owed, and what will happen if the rent isn't paid in full. This notice can serve as a formal record of late payment and can be useful if you end up in court.
7. Serve a Pay-or-Quit Notice
If the rent and late fees remain unpaid despite your efforts, it may be time to serve a pay-or-quit notice. This is technically the first step in the eviction process and shows your tenant that you're serious about taking further action if the rent isn't paid.
This notice is formal and legal. It needs to clearly state the amount of rent due, how long the tenant has to pay it (usually three to five days), and that if they don't pay, they need to move out. Remember, you're not trying to scare your tenant. You're simply making them aware of the severity of the situation.
Once you've served the pay-or-quit notice, the ball is in your tenant's court. They've got a set amount of time to either pay the rent or vacate the property. If they do neither, then it may be time to proceed with the eviction process. It is crucial that you do not accept partial payments after this point. Accepting a partial rent payment may terminate the eviction process, and you will have to start the process over again without ever receiving the rest of the payment.
Even as you serve this notice, make sure you're following all local and state laws. The rules for evictions can vary greatly, so it's important to get it right. It is best to send this notice via mail with a return receipt. If you proceed with eviction down the line, you’ll want proof that the renter received your notice.
8. Offer Cash for Keys
If eviction seems daunting or cost ineffective now, another option is offering “cash for keys.” It's exactly what it sounds like—you offer your tenant a cash incentive to leave the property voluntarily. This isn't about rewarding bad behavior; it's about finding a solution that works for both parties, and it can be a quicker and less stressful alternative to eviction.
If you decide to go down this route, make sure you handle it properly. Discuss the arrangement with your tenant and come to an agreement on how much you'll pay them and when they'll move out. Once you've agreed, put it in writing. This protects you if there are any disputes later on.
9. Evict the Tenant
If all else fails, eviction may be your only option. While this is a last resort, sometimes it is the only solution left. No one likes to go this route. It's stressful, time-consuming, and can be quite costly. However, you're running a business, and if the rent isn't coming in, you've got a problem.
Here's something you've got to remember: eviction isn't just about asking your tenant to leave. It's a legal process, and you've got to do it according to local laws. That means serving the right notices, waiting the required amount of time, and if necessary, going to court.
Once the eviction is over, it's time to move on. Clean up the property, make any necessary repairs, and start looking for a new tenant. Remember, most tenants are reliable and respectful. Tighten up your screening process, be clear about your expectations, and don't be afraid to enforce your rules as you move forward.
Final Thoughts
Lastly, there are a few things you should avoid when dealing with late rent payments.
- It's never legal to lock someone out of their home or shut off utilities to get them to pay rent.
- Never accept partial rent payments unless a payment plan has been created in writing, as this can complicate the eviction process.
- Refrain from calling or writing your tenant multiple times to remind them to pay rent. This could be considered harassment, which is illegal.
How late can a tenant pay rent?
Legally, tenants must pay rent on or before the date stated in the lease. A grace period (the small window between the rent “due date” and a late notice) is allowed at a landlord’s discretion. If no grace period is provided, rent is technically late the day after the payment is due.
Can you evict a tenant for paying rent late?
As stated, eviction should be a last resort when a tenant is consistently paying rent late. However, it is within your right as a landlord to evict any renter who violates the lease agreement, and that includes paying rent late. Always consult state laws for the proper and legal way to proceed with an eviction.
What’s the most you can charge for late rent?
Late fees vary by state. Some states agree that late fees must be “reasonable,” while others have a specific monetary limit on how much you can charge. As a general rule of thumb, when you calculate a late fee, it should be around five percent of the cost of rent.
Dealing with a tenant who consistently pays rent late can be stressful. But by following these steps and maintaining a professional approach, you can handle this situation effectively. Remember, communication is key, so keep those lines open and remember your rights and responsibilities as a landlord.