Advice Needed: Long-Term Tenants Behind on Rent – How to Handle?

[Marcos Carbi]

Hi everyone,

I’ve been a landlord for a while now, but this is the first time I’ve found myself in a tough situation like this, and I’d appreciate some advice.

I have tenants who have been with me for 2 1/2 years. They’re a family with two kids and have generally been great tenants—almost always paying on time, except maybe once or twice, but they’ve always caught up. Unfortunately, the husband lost his job about 8 months ago and, from what I'm told, hasn’t been able to secure another one—not even in retail or fast food. I'm having a hard time believing this. Not even Walmart or McDonald's?

As of now, they owe me:

• Half of November’s rent
• All of December’s rent
• All of January’s rent

That’s about $5,500 total, which is a lot of money to lose. Given their track record, I’ve been lenient because I feel for them and understand how hard it must be for their family (I also have their $1,900 deposit). I offered to temporarily lower their rent until they’re back on their feet. But after nearly three months with no full payment, I feel like I need to take action.

I recently told the wife (who I know works hard to support the family):

I feel I need to be a little more firm so I told them I need November's rent by tonight, and asked for 10 proofs of job applications. My idea is to set up a ~$450/week payment plan for the remaining balance, and to get them back into the rhythm of paying with a deadline. I will continue to ask for proof of job applications and rejections. If they don't pay these next weeks they're out. 

I know some landlords might say I’ve already been too lenient, but I feel for this family and don’t want to displace them. At the same time, this is a business, and three months behind on rent is a serious issue.

What would you do in this situation? Any advice or suggestions would be greatly appreciated.

Thanks in advance!

– Marcos