Investor · Bonaire, GA · Member since 2014 · 177 posts · 82 votes
If you have a tenant who is paid up on rent, but doesn't pay for other fees (storage, parking, late fees, whatever), how hard do you go after them? I'm in a situation like this and the property is profitable, and the rent is paid on time but the tenant essentially owes me $325 for back payment on a storage unit with the potential to get even further behind. Its not part of their rent, it was an add-on. The storage unit is on the same property as the rental unit and its empty. But its in their lease that they will pay the extra fee for a year.
I can't seize the property in the storage unit, because its empty. I could go to court, but that feels like a waste of my time and effort for a property that is already profitable. I do not have a very commanding presence, and while I talk sternly to tenants if required, I feel like I have no leverage in this situation because the tenants will keep ignoring me unless I "do" something, not just talk.
Making matters worse is the fact that they are dirt poor, and my sympathy meter kicks in. I have to beat it back a lot and remember that this is a business.
Thoughts? Or is there a method for leaning on people to cough up the cash they owe without having to take legal action?
Investor · Marietta, GA · Member since 2015 · 382 posts · 258 votes
10y
If you have a contract in writing and signed, $325 out of next months rent goes first towards storage fee. Send notice regarding past due rent amount followed by a formal 3 day notice to pay or quit.
Option 2; continue to subsidize
Investor · Marietta, GA · Member since 2015 · 382 posts · 258 votes
10y
If you have a contract in writing and signed, $325 out of next months rent goes first towards storage fee. Send notice regarding past due rent amount followed by a formal 3 day notice to pay or quit.
Option 2; continue to subsidize
You could do like the self storage owners do and put your own lock on the storage unit. They get back into the storage unit when they've settled the bill for it. Seems like $325 is hardly worth the hassle of going to court, or starting a conflict with your tenant.
If you have a tenant who is paid up on rent, but doesn't pay for other fees (storage, parking, late fees, whatever), how hard do you go after them? I'm in a situation like this and the property is profitable, and the rent is paid on time but the tenant essentially owes me $325 for back payment on a storage unit with the potential to get even further behind. Its not part of their rent, it was an add-on. The storage unit is on the same property as the rental unit and its empty. But its in their lease that they will pay the extra fee for a year.
I can't seize the property in the storage unit, because its empty. I could go to court, but that feels like a waste of my time and effort for a property that is already profitable. I do not have a very commanding presence, and while I talk sternly to tenants if required, I feel like I have no leverage in this situation because the tenants will keep ignoring me unless I "do" something, not just talk.
Making matters worse is the fact that they are dirt poor, and my sympathy meter kicks in. I have to beat it back a lot and remember that this is a business.
Thoughts? Or is there a method for leaning on people to cough up the cash they owe without having to take legal action?
You tell them you'd really rather not have to take legal action, so they need to cough up the cash. They have to believe you'll do something about it. That's how you lean on them.
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
10y
And by the way, I don't understand why you would separate out that they pay their rent on time, but don't other fees on time. They are not paying what they owe according to their lease every month. So, they are in breach of their contract. Your lease, with all fees and rents, is one contract. They are in default of that one contract.
I think it's weird how landlords say their tenants are great and pay on time, followed by "but".....they don't pay part of their monthly required payments under the contract....but they're really good tenants.....
They're not good tenants and they are in default of their contract. And if they're too poor to pay the full payment required under the contract, then they shouldn't have been approved in the first place.
I guess it's a way to convince themselves that they don't really have a problem that has to be dealt with. And yet, they come here wondering how to fix this wee little problem they have with their great tenant.
Sorry, don't mean to berate you personally. I just find the psychology fascinating.
It's like listening to a woman say how her husband only hits her because he is going through a hard time, but he's really a great guy. Um, no he's not. Even if he keeps the cars in shape and mows the lawn, and walks the dog, etc.
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
10y
If the landlord-tenant law for your jurisdiction allows it, add a clause to your rental agreement such as this:
PAYMENTS.All payments made by Tenant to Landlord after the tenancy commences, no matter how designated by Tenant, will be applied as follows: first, to any outstanding amounts due for damages/repairs, utilities etc.; second, to any outstanding service charges or fees from prior months; third, to any rent outstanding from prior months; fourth, to any service charges or fees due in the current month; and lastly to the current month’s rent.
As to whether or not you can lock the person out of the storage unit and/or seize the contents, be very careful. It most likely would be a violation of your landlord-tenant law. Most states have separate laws that apply to storage units, as opposed to dwelling units. If you charge extra for the storage unit as part of your dwelling unit contract, then it will most likely fall under residential rental laws. However, if you have a separate contract for the storage unit rental and it's not on the premises of the residential rental unit, then it may fall under storage unit rental laws.
It's paramount that you invoice in a timely manner whenever a tenant owes you for something. It they don't pay, then you can serve them with a notice about the violation. Typically, depending on the L-T laws for your jurisdiction, this can be a "Notice to Pay Rent or Quit", if you have a clause such as the one I shared. Or it can be a "Notice to Comply or Quit." Best practice is to always reference the term in the rental agreement that they are violating and tie it to remedies available to you by your L-T law.
In your current situation, since you say the tenant is "dirt poor" and you sympathize with their situation and the storage unit is sitting empty, it may be a good idea to renegotiate the agreement. Sure, you could hold them accountable and try to squeeze the money out of them because you hold a signed contract. But doing so would cost you time and money, with little chance of monetary gain and it would probably hurt the relationship. Given the circumstances, if they are otherwise good people and just not able to afford the extra storage unit, then I would talk with them about the situation and consider letting them out of the obligation to rent the storage unit. But do hold them accountable for late fees, parking and other fees as they come due.
Remember, everything is negotiable. You may want to tell them you will relieve them of the back rent due for the storage unit and let them out of that part of the contract, but only if they get caught up with other amounts due, such as the late fees, etc. That should be some incentive for them and could result in a win-win, as well as put the relationship back on good terms. Good luck!
Highland, NY · Member since 2013 · 169 posts · 130 votes
10y
I agree with everyone in that you need to go after payment for what they owe.
One other thought - since it's empty maybe they don't really need it and shouldn't be wasting money on it every month. Talk to them and if that's the case then probably best to end that part of the lease and rent it to someone who is going to pay for it.
Investor · Bonaire, GA · Member since 2014 · 177 posts · 82 votes
10y
Thanks @Marcia Maynard, that clause will help a bunch. I will add it to my lease.
As you suggest, I could lock it, but as I mentioned, the sucker is empty so its no real burden for them. I think I will take your suggestion and maybe re-sign the lease without the storage unit included. That way, they still owe, I can get them on a finite payment plan, but it frees up my storage unit and I can profit elsewhere.
If allowed I would take it out of their next months rent, charge a late fee on that rent and proceed to evict. If that does not get the bill paid I would be getting rid of this tenant as fast as the process allows and get a good tenant that is not "dirt poor".
Be very carful as your personality will set you up to be severely take advantage of by tenants. Your tenant knows you are weak and has no intention of paying as long as you are OK with him not paying.
Regrettably your tenant is not the problem. If you have sympathy for him and it is interfering with the proper management of your business you need to get rid of him. Find a more suitable tenant that will support you in properly operate your business.
Lockport , NY · Member since 2014 · 265 posts · 124 votes
10y
I do like Marcia's solutions above, about renegotiating the terms for the storage unit. BUT...I wonder if being "dirt poor" means they don't have...cable, the internet, cell phones, pets, smoke, drink, have multiple cars, window AC units...hmmm, make's ya wonder! if they have any one of those things, I'd really question their ability to pay.