You followed our recommendations to discourage tenants from paying rent late, but alas, they still pay late. What should you do now? Whether you’re faced with a past-due payment for the first time or you have a tenant with a long history of paying late, it takes you time and costs you money to rectify the situation. Below you will find a simple 5 step process outlining the action you can (and should) take.
Even in the most frustrating of situations, going for a big guns and hiring a lawyer is going to be as expensive and time-consuming for you as it is for the unfortunate tenant, so the small steps before can be a saving grace. And if you follow the same steps every time, then you will prove yourself to be a serious and consistent landlord while following the letter of the law. There’s no better way to present yourself!
Step 1: Check Your Lease Documents and Payment Records
As silly as it may sound, double-check your records to make sure the tenant is truly late with his or her rent. Sometimes landlords keep better records on paper than they do in their heads and can be mistaken as to when something was– or was not– paid. While most states don’t legally specify a certain grace period in which the tenant can pay the rent, the majority of leases contain a clause allowing a 3 or 5-day period after it is due for it to be paid. If you’ve double-checked and found that yes, the tenant is indeed late, then you’re bound to the provisions agreed upon in the lease and by state and local statutes as to what sort of extra fees you can charge. Usually the lease will specify a late fee, but if it doesn’t, then you can’t retroactively change your mind and decide to charge one. And remember, no matter how you personally feel about any late-rent situation, it constitutes a violation of the lease that was signed by all parties, and this effectively makes it a breach of contract.
Step 2: The Late Rent Notice
The next step would be to serve the tenant a Late Rent Notice. This is a piece of paper reminding the tenant that the rent is past-due. It should include a list of all fees that are owed (including late fees) and a warning about further legal action you will need to take if the rent isn’t paid in full very soon. It can be served to the tenant in person, emailed, or taped to the door of the unit around the day after the rent was due. This notice will also help you later in court if you need to prove that there was a pattern of delinquent payments (so keep a copy for yourself!). This step is not required by law and is only recommended as interim action. Hopefully it will jog an honest but forgetful tenant’s memory, but its threat of legal action will make other tenants take it seriously.
Step 3: The Phone Call
A phone call to the tenant to find out what’s going on can be done before or after the Late Rent Notice is served. However, this only needs to be done once to avoid accusations of harassment (which is very illegal). The phone call serves many of the same purposes as a Late Rent Notice, but the added benefit is that you’ll be speaking to the tenant in person. For this reason, try not to substitute an email for the phone call.
Step 4: The Pay or Quit Notice
This is a more official document than the Late Rent Notice and is technically the first step in the eviction process. It shows the tenant you’re serious about pursuing action and is delivered in person to the tenant on the day 6 if the rent is still late. It needs to clearly convey your intent to evict, the amount of money you’re owed (including all late fees), and the date by which they need to pay it. If you have an eviction attorney, this is something he or she can draft. Post it on the door of the unit or deliver it to the tenant in person. You may also want to mail one to him or her as a back-up measure. After this, you will have to wait a certain period of time until you can file eviction papers– depending on the state, it’s usually around 3-5 days, so check your local statutes.
Step 5: The Last Resort: Legal Action
If all else fails and the tenant still doesn’t pay, get an eviction lawyer. At the earliest possible opportunity (a.k.a. when the Pay or Quit waiting period ends), file a tenant-landlord complaint in court. In many places, it is illegal to evict a tenant until all court precedings are over, and this can take months. You’ll need to pay a fee and thoroughly complete all paperwork before you get a date for a hearing. When the day comes for you to head into court, know ahead of time what you’re going to say and have all your documented evidence prepared.
When dealing with a tenant who pays late or partial rent, some landlords will recommend inspecting the unit as soon as possible to make sure that your property isn’t being damaged. You can usually only enter the unit with the renter’s permission. After obtaining this, they recommend that you document and take pictures of deficiencies. Once you’ve identified these, fix those which are obligated to be taken care of by the landlord and ask that the tenants fix those which are their obligation. Schedule another inspection to make sure both parties have addressed the problems. Keep all documents in case you need them in court.
Remember, it is never acceptable or legal to lock someone out or shut off utilities before the eviction process is complete. Equally illegal are threats, humiliation, or physically attempting to remove the tenant. Not only can these be morally questionable, but an ex-tenant can easily turn around and sue you for unlawful eviction or harassment. As frustrating as it can be, let the courts do their job.
Important Points to Remember
1. Act quickly and consistently. Enforcing the rules will let tenants know you’re serious and will help prevent late tenants from getting behind even further on their payments. You may have worked out a deal with them once or twice, but what if the payments spill over into next month? It’s better not to have to worry about continual bargaining for the money they promised to give you.
2. Try not to accept partial payment of late rent and NEVER accept even one cent if you think the case may go to court. In many places, accepting partial payment will void any legal actions you have previously taken, including Pay or Quit notices, and it will start the process of eviction over again (if you have already started it).
3. Document everything in writing. If you and the tenant reach an agreement, have them sign a document specifying the compromise and give them a copy.
4. If there were any co-signors on the lease (like parents of students), they should be held responsible and named in all lawsuits and on all legal papers.
5. Follow the exact rules of your state and city when going through the eviction process. Failure to do so could result in delays or end the eviction process entirely while the tenant continues to not pay you.
