Many property owners are unsure about how to handle tenants who are delinquent in paying rent. It’s important to know how to handle a tenant that may not be able to pay their rent on time. Some owners take a hard line right away and start posting notices immediately. Other owners are reluctant to be so aggressive and end up a few months later with a seriously overdue tenant. There are a few things to consider if you find yourself with a tenant who is more than a few days late with their rent.
First, communicate. Contact your tenant to find out why the rent is late. I recommend a telephone call instead of texting or emailing. A personal conversation goes a long way towards finding out what is really going on and it will prevent your tenant from evading your questions. When you talk to the person, you can really hear what is going on both by what they say and how they say it. You’ll react much differently to a tenant who responds with a nonchalant attitude than a tenant who is clearly stressed about their delinquency and wanting to get rent paid as soon as possible.
Find out what is causing the delay. You are going to need to know if this is an isolated situation, or whether this will be an ongoing problem. If it’s ongoing, it will help you decide on a plan of action.
If this is a long term tenant who is otherwise on time with their payment patterns, it’s okay to be flexible. Just get a firm date on when they will pay the rent. I do not recommend allowing the non-payment to go beyond two weeks. Find out if they can make a partial payment. If the answer is no, this might be a red flag for you. If you find yourself with a tenant that is more than a month behind, consider running a credit report. This will help you find out if they are behind in their other obligations as well. Just make sure your lease and your application, signed by the tenants, give you permission to do this.
Suggest that your tenant borrow rent money from family. This is a good response if they tell you they cannot pay you until they get paid again, which is seven days from now. A family member is much more likely to lend the tenant some money and get repaid than you, the landlord waiting for payment.
Regardless of the scenario or the reason, always post a 3 Day Notice to Pay or Quit. First, it will shorten the waiting period for you if you do need to file an eviction, and it also sends a clear and formal message to the tenant that rent is due and it needs to be paid now. If you are choosing to give a tenant several days to pay their rent you can simply explain that the service of the notice is precautionary and necessary in the event they do not keep to their commitment. If their intention to pay is sincere a tenant will understand why this notice needs to be served.
I often get calls from owners who manage their own properties and find themselves with a tenant who is one or two, sometimes even three months late in rent. Unfortunately, a tenant who is more than two months late is not likely to get caught up. The owner will be looking at an eviction at that point. It’s too overwhelming for the tenant to try and come up with that much money as well as deal with whatever stress is causing the late rent.
Here are a few suggestions to owners who find themselves in that situation:
Offer to let them out of the lease. If they can move within two to three weeks, everyone will be happy. Pay them to leave. I get a lot of raised eyebrows when I say that, but it can be less expensive to give the tenant an incentive to move. It will eliminate your need to pay for an eviction, which can cost between $800 and $1,200, and you will not have to endure the nonpayment of rent while you go through the process. Overall, it’s a good remedy to consider. At Walters Home Management, we have had positive experiences by relying on open communication with our tenants. We exercise discretion and compassion when appropriate. We find this leads to a better result in the long run. We understand late rent payments can be stressful. If you would like to talk about your options, please contact us, we’ll help you find some peace of mind.