Having a tenant not paying rent is probably the most dreaded issue landlords can think of. Luckily, this does not happen too often, but it still happens. Sometimes, the tenant is just down on luck. Other times, though, a tenant can purposely refuse to pay. These are polarizing cases, so how do you deal with them? That’s what this blog is all about.
Related: 8 Types of Tenants to Beware of When You Rent Out Your Property
Is the Tenant Actually Late?
You read that correctly. Is the tenant actually late when it comes to paying rent? To be sure, review the lease. Some leases allow for a grace period for up to five days. Review if this is the case for your lease. Also, some leases tend to have a fee for the tenant being late. Again, see if your lease charges a late rent fee. If your lease doesn’t have a late rent fee and you decide to charge for late rent, you’ll have to wait. Only once the lease has expired can you decide to add in a late rent fee.
Contact the Tenant Not Paying Rent
What if the tenant is indeed late? Then you should simply remind the tenant that rent is late. It’s probably best to contact the tenant in person. If that isn’t possible, call him/her on the phone. If you do opt for calling, make sure this is the one time you call him/her, in order to avoid harassment charges.
Once you get a hold of the tenant, try to be as firm and polite about the matter as possible. See if you can work out a solution with the tenant not paying rent.
Hopefully this alone will solve the issue. If not, you’ll have to resort to the next step: a late rent notice. This is a notice reminding the tenant of the late rent. It also mentions the rent amount and late fee, if there is one. The late rent notice can be handed in person, mailed, sent by email, or even taped to the tenant’s door. A late rent notice tells your tenant that you are prepared to get into legal action if the rent is not paid soon. For that reason, if the rent isn’t paid yet and the situation escalates, keep a copy of the notice for yourself, as evidence in court. Also, when mailing the notice, keep a tracking number to know when the notice has arrived.
New Notice
If the tenant not paying rent continues to do so, your problem is getting worse. It’s almost as if your investment property is vacant, as you’re missing out on rental income, messing up your cash flow.
Your next measure is to serve the tenant not paying rent with a pay or quit notice. This notice is exactly what is sounds like. It gives the tenant 3 to 14 days to pay the rent or leave the rental property. Try to hand this in person or by mail.
If the tenant does not budge, the eviction process will begin. Normally you’d want to avoid evictions. They’re costly and time consuming. A tenant shouldn’t be looking forward to an eviction either. Obviously, he/she will be removed from the property, while their rental and credit history will also be blemished.
Avoiding Eviction
Although a pay or quit notice is technically the first step towards eviction, you and the tenant may be able to avoid it. This is especially possible if you have cooperative relations with the tenant not paying rent. If you find out that the tenant is just going through some financial difficulty, recommend to the tenant to pay the rent in weekly partial payments. This turn things for the better quickly. You could also consider using a small portion of the security deposit to cover the unpaid rent.
If you own multiple properties, you could recommend to the tenant to move to a property with lower rent. Or, you could recommend to him/her to rent with roommates if possible. Of course, these two scenarios would be possible if the issue of unpaid rent does not escalate. Keeping good ties with a tenant will help hold these solutions viable.
If the situation has escalated to the point of a pay or quit notice, you could try something else to prevent eviction. Simply try to convince the tenant not paying rent to leave the property. Remind his/her of the consequences of eviction on the rental and credit history. This could save you from the headache of an eviction.
Last Resort: Eviction
Evictions are rare, hopefully you never have to reach this point. If you unfortunately do, here’s what you should know:
Related: Don’t Let a Fear of Evictions Stop You from Buying Investment Property
To begin the eviction process, consult an eviction attorney. This will cost a filing fee, which you can add to the amount of unpaid rent. Keep records of anything related to dealing with the tenant not paying rent, whether it’s a lease, previous rent payments, or anything else. Once you’d filed for eviction, you are required to enter the unit to see its condition. This will serve as evidence if the tenant has damaged the property. You legally aren’t allowed to enter the rental property without the tenant’s permission. Be sure to obtain that permission. From there, you can continue with eviction proceedings. Treat your tenant with respect throughout the entire process. If you don’t, you could face charges. No need for extra legal issues when dealing with an eviction.
Related: 6 Landlord Laws and Concerns You Should Be Aware Of
Having a tenant not paying rent is annoying. Try to resolve the issue quickly, before it gets worse for your rental income and cash flow. A good way to avoid all the hassle is to work out a solution with the tenant. Of course, this will require his/her cooperation. If that can’t happen, a late rent notice or a pay or quit notice should help convince the tenant not paying rent to pay up. Hopefully it does not have to escalate to an eviction.
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