Late Rent Payments Keep Happening: How to handle this situation?

Question

I'm a new landlord.  I have had my rental property with tenants in it 7 months.  Lease signed March 2024. I went against my better judgment and rented to a non-married couple.  He had great income and a great credit score, she didn't, and I had been vetting potential tenants for a month and a half, and I was finally happy to see someone with good income and credit.  I went ahead and accepted them, and in the lease they both signed, he is the primary, because her income and credit score would have disqualified her to rent alone.

Two months after they moved in, he called me and said they were having relationship problems and she kicked him out the house.  I told him they signed the lease for one year so they BOTH are responsible.  So, out of the past 7 months they have been renting, they have been late on the rent 5 months out of the 7 months, but they always end up paying with late daily fees.

On Oct. 1st I received a text from her asking if she could pay partial rent on Oct. 4th and pay the remaining rent on Oct. 20th.  I went ahead and agreed because even though they are late, they always end up paying me.  I'm trying to be more relaxed than I was in the beginning.  Some posters told me I was too strict, and as long as they are paying, be happy.

The rent price is $1350 and she paid $675 on the 4th.  I told her the total remaining would be $750 with late fees on Oct. 20th.

Oct. 20th came and went, no payment.  She texted me today on the 21st and said her and her bf are separated and he won't help her.  So, she quit nursing classes and took on another job to be able to pay bills.  She has 3 children, and he bailed.  She told me to only correspond with her from now on.  Then, she asked, if she could pay the remaining $750 that is currently due for Oct. on Nov 1st. and pay the November rent in full Nov. 15th.

My questions are:  What are the best ways to handle this situation. I am not sure how to respond to her request.  It seems like the goal post keeps being moved, and technically with him gone, she does not qualify to live there anyways. He can't just leave when he signed the lease?  He's still legally responsible for payment, right?  Should I give a 5 day notice to pay or be evicted? (Required 5 day notice in Illinois).  How would you experienced landlords handle this situation?  I obviously won't be renewing the lease, and will need to find new tenants come March.  I reached out to my attorney to see what my options are, but always appreciate the opinions of the Bigger Pockets community.

Thank you.

Michele Fischer · Answer

Congrats on becoming a landlord, welcome to the "party"!

If I were you, I would be firm with needing rent more timely, I would still contact the male because she can't kick him off the lease, and I would have a conversation with her along the lines of "this is clearly not what either of us signed up for, is clearly not working, and what can we do to get you to a lower cost living situation as soon as possible?"  Work with her on that.  It may be overwhelming to her to think about moving but you might be able to easily make some aspects of it easier depending on what feels heaviest to her.  Keep your goal in mind, a paying tenant, her or the next tenant.  You can also tell her that you are going to start the paper trail so that you don't get stuck with unpaid rent, but that it will be rescinded once she gets up to date on payments.  Be clear that you are not messing around, have some wiggle room and grace, but that you have bills to pay too.  You gave the mouse a cookie and now she is expecting you to give her the milk too.  You have every right to draw the line at the cookie only.  In truth you don't have a lot of power over when and if she pays, but you can and should use the power you have.

We have this clause in our agreement and we talk about it before they move in so that they are clear who the primary is and what that means.

In the event that Tenants decide they no longer want to live together, ___________  will be considered the primary Tenant to make decisions about modifying or terminating tenancy.  Deposits will not be returned (full or partial) until all tenants move out.

Nathan Gesner · Answer

Someone gave you bad advice in the very beginning. Late-paying tenants eventually turn into non-paying tenants. When the boyfriend first mentioned leaving, you should have told them both to move out, because trouble is right around the corner.

Hindsight is 20/20. What should you do now? Get her out asap. She can't afford rent, so you get her moved out by the end of the month, then apply her deposit to the unpaid rent, cleaning, and repairs.

I may even incentivize her to leave quickly by offering to forgive the unpaid portion of rent if she gets out by the end of the month, but it really depends on a number of factors and I'm not going to ask for details.

For future reference, best practice is to have set standards and adhere to them every time. Here's my policy:

1. Rent is due on the first, late on the second.

2. My state allows me to charge a late fee on the 5th day of the month, so that's what I do. It's a one-time fee of $100 or 5% of the rent, whichever is greater. I don't waive it, even if Aunt Gertrude died, the transmission fell out of the car, and they had quadruplets on Saturday.

3. If rent still isn't paid by the 10th, I post a 3-day Pay or Quit on the 11th and start towards eviction. Tenant can still pay rent, late fees, and other penalties in full and get back into my good graces, but I do not waive any fees, accept payments, etc. Even if the tenant walks in on the second day of the month and tells me they can't pay until the 13th, I remind them they will still be charged late fees and I will still start the eviction process on the 11th.

My standards are in writing and equally applied on every tenant, every time. It makes life easier for me and the tenants.

John Morgan · Answer

Been there done that. And I got burned almost every time by being the nice guy. I now tell them I’ve been burned too many times and my wife expects me to start the eviction process if rent isn’t received by the 5th. Period. I tell them my bank drafts my mortgage on the first and rent is due on the first. But I will occasionally let them get behind and pay by the 5th. I tell them I’m starting the eviction process with a 3 day pay or quit notice on the 6th. And file in court 3 days later. If they pay by the court date plus the court fees, then I’ll drop the case. I tell them I get court dates in about 3 weeks. They have until then to come up with rent. Otherwise I need to evict and move on. Most people find the money before I have to file. I’m done with dead beats who give me lame excuses all the time why they don’t have rent or have ever had any emergency money to covered the unexpected things that we all encounter every month.

Jake Knight · Answer

I would definitely leverage the BF whom is still responsible since his name is on the lease.  I would make sure he understands his role on this until that lease expires.  I believe you mentioned he had great credit. One would assume he would want to keep that in good standing.  Once the lease expires, provide notice to vacate to both parties and move on from them.  I wish you the best and like Michelle said "welcome to the party!"

Zane Cress · Answer

How long would it take to get a new tenant and what's the cost associated with that vacancy? Maybe you would be better off lowering her rent to $1100 on a new lease for 6 months and getting the guy off of it. Are you having any success chasing him for rent? She can plan on moving out in 6 months and you can start lining up a better tenant but still get paid without too much vacancy. If you had to take all this to court you would probably be wasting time and money. If you can make the best out of it and still get some money that would be ideal.

Adam Bartomeo · Answer

Both are still responsible for the rent. Follow the eviction steps which is first posting the 5-day notice. That usually scares them enough to start paying. If they don't, proceed to filing for eviction. The goal is not to evict but to get them to pay but you need to protect yourself and sometimes tenants need negative reinforcement.

Tim Miller · Answer

@Cherilyn Williams Welcome to the school of hard knocks! These are lessons you'll never forget! Your problem wasn't that they were unmarried, the problem was he had good credit and she didn't. He was responsible and she isn't.

Nathan is spot on as always! Get her out now. Tell her to be out by the end of October and you'll waive the remaining lease, as long as the unit is the same condition as when they moved in.

Tighten up your policies and procedures and stick to them. If you don't, the next tenant could bankrupt you. Good Luck!

Joe S. · Answer

welcome to landlording… 🥴

Cherilyn Williams · Answer

Thank you for this! For my next tenant, I am definitely going to implement your strategy here.  I thought I was very firm when I started off. Then some people told me I was too firm and being unrealistic. So I tried to lighten up a little, and here I am in this situation now.

Late Rent Payments Keep Happening: How to handle this situation?

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