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Updated over 8 years ago, 04/09/2016
Tenant not responsive and unsure what to do
In case you didn't read my profile a short understanding of us. We have been renting for 8 years and we have been learning this as we go. We have recently started using Bigger Pockets which has been a HUGE help so thank you for everything so far.
I'm sorry this is long winded - I wanted to explain as best as possible because we sure could use help with this one and I wanted an answer based on a full understanding
We have a tenant that has been late almost every month for the first 6 months of the lease term. Normally every payment was less than 15 days late. We went to them about the 6 month mark and looked to see what the problem was. By the end of that meeting we agreed that the tenant would pay weekly and we set up a quarterly schedule and they had to abide by it or the eviction process would start. From then on they did pretty well. Finally at about the 11 month mark they only paid a partial weekly payment and then one of the weeks in the 12th month they missed completely!
Now they are month to month. Last week I was pretty annoyed that my wife told me they fell behind because I feel we bent over backwards. Last week I sent them a letter via email telling them that they have the next week to catch back up and to set up another quarterly schedule. We even gave them the option to go back to paying monthly but we told them the flexing is over, its due pay it or leave (obviously nicer than that). We told them we needed the decision by yesterday and they never responded. But last Monday they paid a full weekly payment?!?! They are still behind though. They act as if the missed payments don't exist.
In summary we are still trying to work with them because as we have experienced they will eventually catch up and break even. I just dont like that they do it on their terms rather then the terms agreed to. Now we can't get them to respond to an email on how to proceed! I sometimes feel its not worth it to continue this because every week its a guess if they will pay. Am I wrong for this? If not and the next step is to evict how do I go about that with the special circumstances we are in? Also they are currently not a full month behind only about 3/4 month behind, can we still evict based on that?
I appreciate any feedback as I am starting to think our biggest mistake in this was being nice in the first place. Again we are still figuring out how to play all the different situations throughout the years. Because of this situation we are far more strict with the second rental we just felt that we needed to try to at least finish out the contract with this one.
Shawn
I think the chronically late tenant is the toughest to deal with. And, I've only been doing rentals a couple years. My first tenant got behind, and ignored the part they were behind on. I eventually evicted them and was out around $2000. Try to find a new tenant at the end of the lease term because it won't end well anyways.
If they are month to month now.... I would end the lease and give them their 30 notice to leave. Cut our loses. You have tried to work with them and they have been a problem from day one. I would keep part of the deposit to cover missed rent after taking out any damages.
Keeping track of weekly payments is too hard. You now have four times the number of rent due dates to consider what to do when the payment is late. However, vacancy and rental prep are the largest expenses that a landlord incurs so if you can save the tenancy ON YOUR TERMS it may be worth a try. I would send the 30 day notice to quit but I might also send a brief message stating that you would like the tenant to contact you if they are interested in continuing the tenancy. If they don't contact you, proceed with the termination/eviction. If they do contact you, make sure they know that rent is to be paid monthly and on time in order to continue the tenancy. If the rent is made current make sure you send a Notice to Quit for Non Payment after any late payment and make sure you assess any late fees that are due. (This is a 7 day notice in Michigan--you will need the similar PA form which may be called something different and may require different number of days notice.) If you find you are sending these out more often than you'd like you may still terminate the tenancy with a 30 day notice anytime you would like.
I had a tenant for whom I wrote a lease with rent due every other week to accommodate the differing pay schedules of her and her partner. They actually paid the rent in 2 portions (she made ~1/2 the payment and her partner made the other ~1/2 payment). This meant I was keeping track of four payments monthly (not what I agreed to) and it was a rare month when, at least one of the payments wasn't late.
The first change I made was getting them back to the two payments that I agreed to. That was still problematic as they paid late often. (They always added a late fee but not always the full amount even if it was the second payment of the month that was late.) Next I insisted that they pay electronically so I could eliminate the variable of payments delayed in the mail and make sure there was no confusion as to how much of a late fee was due. There were 2 separate payments scheduled each month with late fees on each. Still too much work. I insisted that they go back to a monthly schedule and pay electronically. They are still there after 6 years and they still pay late almost every month. I created a "liquid fund" for the late payments. I use the money that accumulates in the liquid fund to buy nice bottles of whiskey. The late payments no longer bother me--in fact, I have embraced them.
If you are just sending e-mail they could claim they never received it. Does your lease allow for notices by e-mail and lists approved methods of communication by landlord and tenant?
Now that you have worked on different payment arrangement styles you have opened yourself up to issues.
If it was they pay each month and it's late after the 5th then it makes it simple. When you start switching to weekly and then something else thinking you are HELPING when you go to court for eviction the tenant can say they are confused. The judge will tend to also look at these multiple agreements that were set up as not clear.
Send formal notice so you create a paper trail. Focus on what is in front of you and not all you have done up to this point that emotionally frustrates you. When people get emotional they lose clarity and objectivity.
If they sent a payment it seems on some level they are trying. Believe me you could have much worse tenants. Have you performed an inspection recently on the property? You could see how hard they are living in your property or if they take care of it pretty decently. It's one thing if they pay late as long as it doesn't snow ball into the next month and they take care of the property.
If you can't get them into a payment flow that stays the same month to month, they are living hard in the unit, etc. then that is a negative compounding affect on your property that will cost more in rent for the long run.
No legal advice given.
- Joel Owens
- Podcast Guest on Show #47
In my own experience, a tenant who isn't paying AND also not communicating with you is one that is in trouble and likely to get worse instead of better.
A couple of thoughts though. First, are you charging/enforcing a late fee? If not, you need to be or they have no motivation to pay you on time and/or before their other bills.
Secondly, when they are late and/or miss payments altogether, are you serving them with a Notice to Quit? If not, you should be or they won't take you seriously. (Here's some more reading on that for your state: Eviction Notices for Nonpayment of Rent in Pennsylvania.)
Good luck to you.
We have tenants who pay late. You need to not be emotional about it, not think about what you have flexed or invested in helping them to stay. My attitude is that if I am getting late fees and they don't get more than a month behind, I'll take the extra fees and work with them. Figure out what you are willing to deal with and always be consistent. Be sure to have a good late fee policy; add it next time if you don't have it.
Given where you are with this tenant, if they are behind on the original written contract and behind on the revised e-mail agreement, you should be able to post a pay or quit notice, depending on your state law. This is the best way to force communication. Post it with what money you expect when. Post a new one every time they don't follow through with what you've agreed to.
Be ready to follow through with eviction proceedings or offering them cash for keys if the pay or quit expires. The written agreements and any e-mail revisions they respond to should hold up in court. Document everything. You can also concurrently serve them a notice to end the tenancy if you are done with them. We have sometimes done that but verbally told them we will rescind it if they get totally caught up by a certain date. Realistically, though, they likely don't have the money and you may as well look for a more solid tenant,
Originally posted by @Kyle J.:
In my own experience, a tenant who isn't paying AND also not communicating with you is one that is in trouble and likely to get worse instead of better.
A couple of thoughts though. First, are you charging/enforcing a late fee? If not, you need to be or they have no motivation to pay you on time and/or before their other bills.
Secondly, when they are late and/or miss payments altogether, are you serving them with a Notice to Quit? If not, you should be or they won't take you seriously. (Here's some more reading on that for your state: Eviction Notices for Nonpayment of Rent in Pennsylvania.)
Good luck to you.
In the beginning we were charging a late fee based on the lease. And every month they were paying it without complaint. To me it was the strangest thing. When we started going weekly they were doing well so there was no need for the late fees. Now that we are month to month and they are falling behind we mentioned applying a late fee which was the monthly late fee divided by 4 since we were potentially going to continue a weekly payment schedule. We have not given notice to quit. We simply told them in an email that we will have to take further action if they do not respond or pay. Thank you for the link. We will definitely be reviewing it.
Originally posted by @Joel Owens:
If you are just sending e-mail they could claim they never received it. Does your lease allow for notices by e-mail and lists approved methods of communication by landlord and tenant?
Now that you have worked on different payment arrangement styles you have opened yourself up to issues.
If it was they pay each month and it's late after the 5th then it makes it simple. When you start switching to weekly and then something else thinking you are HELPING when you go to court for eviction the tenant can say they are confused. The judge will tend to also look at these multiple agreements that were set up as not clear.
Send formal notice so you create a paper trail. Focus on what is in front of you and not all you have done up to this point that emotionally frustrates you. When people get emotional they lose clarity and objectivity.
If they sent a payment it seems on some level they are trying. Believe me you could have much worse tenants. Have you performed an inspection recently on the property? You could see how hard they are living in your property or if they take care of it pretty decently. It's one thing if they pay late as long as it doesn't snow ball into the next month and they take care of the property.
If you can't get them into a payment flow that stays the same month to month, they are living hard in the unit, etc. then that is a negative compounding affect on your property that will cost more in rent for the long run.
No legal advice given.
As for doing a walk through about a month or so ago we tried asking them the best time to do it to try to be fair and they responded as if no time is a good time because he works 2+ jobs and she works a full time job. As a response to that in the email we responded by telling them that we will give them ample notice and we are walking through with or without them. The lease states we will give them notice before entering.
Thank you all for all the replies. This has been great to get other opinions. As you can imagine it is frustrating from time to time when we are dealing with people that pay erratically and are horrible communicators.
The main reason why we have been dealing with it for so long is because so far, somehow they keep getting back to a $0 owed point, pay late fees like its not a big deal, and don't complain about anything the whole time they have been there. Last time I was the house it was decent too but that was about 6 months or so ago. As a previous poster stated the tenants could be so much worse and we get that..... that is whats making this so much more challenging.
Sometimes the type of property and area dictates the tenant pool available.
Lower income areas to some middle income earners are not as affluent and well educated and have trouble financially managing their money.
This leads to well intentions but the tenant constantly struggles with getting by to survive. You have to try and create a way that keeps them on track with the rent and then let them put life issues on all the other bills they owe.
If that is all the tenant types in your area then eventually you might want to sell and move up to a more affluent type of tenant and area for less headaches.
Not many investors stay in the starter space and move up in quality as soon as they can. Investors will take a stress free 15% return over a hard 20% when they have a bunch of money already.
- Joel Owens
- Podcast Guest on Show #47
Originally posted by @Joel Owens:
Sometimes the type of property and area dictates the tenant pool available.
Lower income areas to some middle income earners are not as affluent and well educated and have trouble financially managing their money.
This leads to well intentions but the tenant constantly struggles with getting by to survive. You have to try and create a way that keeps them on track with the rent and then let them put life issues on all the other bills they owe.
If that is all the tenant types in your area then eventually you might want to sell and move up to a more affluent type of tenant and area for less headaches.
Not many investors stay in the starter space and move up in quality as soon as they can. Investors will take a stress free 15% return over a hard 20% when they have a bunch of money already.
I understand and I appreciate your comments.
Originally posted by @Michele Fischer:
We have tenants who pay late. You need to not be emotional about it, not think about what you have flexed or invested in helping them to stay. My attitude is that if I am getting late fees and they don't get more than a month behind, I'll take the extra fees and work with them. Figure out what you are willing to deal with and always be consistent. Be sure to have a good late fee policy; add it next time if you don't have it.
Given where you are with this tenant, if they are behind on the original written contract and behind on the revised e-mail agreement, you should be able to post a pay or quit notice, depending on your state law. This is the best way to force communication. Post it with what money you expect when. Post a new one every time they don't follow through with what you've agreed to.
Be ready to follow through with eviction proceedings or offering them cash for keys if the pay or quit expires. The written agreements and any e-mail revisions they respond to should hold up in court. Document everything. You can also concurrently serve them a notice to end the tenancy if you are done with them. We have sometimes done that but verbally told them we will rescind it if they get totally caught up by a certain date. Realistically, though, they likely don't have the money and you may as well look for a more solid tenant,
I would say late fee income is not a excuse to work with a tenant that should not be your tenant. There are good tenants, and these folks make life easier for all of us. Time to move out the late payer and replace them with a good tenant.
Late payments are almost as bad as non-payments. I had a tenant (class C neighborhood in SoCal) that was paying later, and later and later....until it got to the point where she was paying on the 20th. It smelled to me like she was planning to "skip" a month. Even though i use a property managmeent company, I went to my place, knocked on the door and asked what was up. The place stunk like weed, there were at least two people not on the lease living there, and a dog (I don't allow pets). I told her to pay rent...she paid that month, and then the next month on time, and then back to the late shenanigans. IF she was an upstanding tenant, I might have worked with her, but i didn't like all the extra people not on the lease, so i started eviction.
Originally posted by @Shawn S.:
Originally posted by @Kyle J.:
In my own experience, a tenant who isn't paying AND also not communicating with you is one that is in trouble and likely to get worse instead of better.
A couple of thoughts though. First, are you charging/enforcing a late fee? If not, you need to be or they have no motivation to pay you on time and/or before their other bills.
Secondly, when they are late and/or miss payments altogether, are you serving them with a Notice to Quit? If not, you should be or they won't take you seriously. (Here's some more reading on that for your state: Eviction Notices for Nonpayment of Rent in Pennsylvania.)
Good luck to you.
In the beginning we were charging a late fee based on the lease. And every month they were paying it without complaint. To me it was the strangest thing. When we started going weekly they were doing well so there was no need for the late fees. Now that we are month to month and they are falling behind we mentioned applying a late fee which was the monthly late fee divided by 4 since we were potentially going to continue a weekly payment schedule. We have not given notice to quit. We simply told them in an email that we will have to take further action if they do not respond or pay. Thank you for the link. We will definitely be reviewing it.
Hey Shawn,
I think Kyle nailed it on the head. A tenant that has fallen behind on rent and avoiding all communication is NEVER a good sign for what is to come. Even if he is able to catch up completely and intends to do so, I think his treatment of the situation is fairly indicative of the lack of respect he is going to show not only you, but the property as well.
It sounds like you have been doing all you could to give him the benefit of the doubt and really tried to help him out. Unfortunately, not everyone is as appreciative of gestures like this as you or I would be.
What can suck about this business is that there are people out there that, instead of seeing your offer to assist them as something they should be grateful for, they see it as a sign of weakness they can exploit and take advantage of. So, knowing where to draw the line is absolutely crucial.
One thing that I can not emphasize enough is that you do NOT want to get in to the business of making empty threats towards tenants. If you say that action will be taken if they do not respond or pay by a certain date; when that date comes and passes, take action. Otherwise, you can almost guarantee that they will somehow view this as them "beating" you, for lack of a better term, and continue to see how far they can push the limits on taking advantage of you and the situation.
I know kicking a tenant out is never fun, nor is it something you necessarily want to do; but there are times that it needs to be done and, at least in my opinion, a situation where the tenant has completely shut down all communication after failing to make payments is absolutely one of them.
Sorry you have to deal with this though. Best of luck getting everything sorted out!
Cut your losses. Evict them and hold the security deposit for past-due rent. DON'T spend it, just hold it in escrow minus any repair costs. Then, prepare to take them to small claims court to recoup your back rent. Keep every e-mail, every reply, every check stub (if applicable), etc etc.
Just wanted to give an update....
We discovered a similarity in every post that was different than the way we were thinking. We kept taking the nice/friendly approach before the business approach. We also learned a valuable lesson in keeping a tightly wrapped agreement in check. We thought maybe they were taking our kindness as weakness.
I am sure most will think we are wrong but we decided to try one last thing before we evicted. We decided to try approaching them much more firm to see if they handle things differently. Worse case if they leave it wouldn't matter anyway. We sat down with them and told them what the expectations are. We put them on month to month and we provided no options to them, no flexibility and was sure to emphasize the importance of what we were saying. We even emphasized the importance of them fixing their poor communication issues.
I know its only been 3 months but since that time they have acted like different tenants. Pay is straight and so is the communication so far. We just had our inspection which we did a walk through and the rental is well kept (for a rental).
Since we are thinking differently now if they choose to slip back to their old habits we are ready.
Thanks to everyone.