Tenant Ignoring Late Fee Notices & Refusing to Pay

[Sean Peters]

Hello all,

I am currently in a situation where one of our retail property tenants is refusing to acknowledge and pay late fees as stated in the lease. This property is a family property and until recently it was managed by my elderly uncle.  As such, the tenants would regularly take advantage of his kindness and consistently pay late/ take actions that are not in accordance with the lease. 
 

The following is the issue and any/all suggestions will be greatly appreciated:

-Rent is due on the 1st of the month and there is a grace period until the 3rd.

-After the grace period has passed, in the lease it states that there will be a $25 late fee for the following 3 days and a $10 fee per day for each additional day. (When the lease was drawn up, I made sure that the late fee was reasonable as it is not for us to make additional money, just used as a tool to make sure that the rent is paid on time)

-The "Late Fee" section is listed under "RENT" in the lease.  That said, is this considered additional rent? (I ask as if it is, I assume I am able to serve a 3 day notice)

Additional Information

-Tenant is late in paying the rent on time 10 months out of the year

-I have sent out several notices to the tenant with tracking, to have proof that they received the letters.

-Tenant recently painted the exterior of the building without any consent from us.

Any suggestions on how I should proceed and what to do?  Thank you in advance.

[Jason Moore]

Hi Sean,

So this is a topic I've discussed with potential Clients many times when they approach me with similar issues.... why would you feel the need to evict this individual? Better yet, why do you feel powerless against this individual? There's no need to resort to such hasty solutions as eviction. From the sound of things (managed until recently by uncle/10 times late in the past year), this is a long term tenant? I.E. - a tenant who is currently on a monthly lease?

Simply serve them with a Notice of Continued Lease Violation, and as a result of this Continued Violation - a 30-day Notice to Vacate the Premises. #1: There's no reason for you to stress yourself out as Owner/Manager about a tenant who refuses to follow your procedures, when you can simply replace this individual with a better-quality tenant. #2: (This is the kicker)... You'd be surprised at the number of tenants who immediately "play ball" when faced with their walking papers.

A legal Eviction is something that costs time & money (and often requires an Attorney if you're Owning/Managing under an LLC). But a 30-day Notice to Vacate is just that - an amicable termination of the Lease Agreement. If at the end of that 30 days, the tenant refuses to vacate - most states allow you to seek twice the monthly rent in legal damages (more than you could get under a normal eviction).

The point being - make this tenant aware that there's a "new Sheriff" in town. Not a mean or nasty Sheriff by any means... simply one that expects all parties to honor the obligations they agreed to upon signing the Lease Agreement (grown-ups who sign Contracts have to honor Contracts like grown-ups). If he/she refuses to work within the boundaries of the Lease Agreement - there's no reason to continue the relationship. The same holds true with the painting of the exterior - this is your property, not theirs. It's not difficult to remind them of this so long as you remember that the law - when used appropriately - is on your side (the law which allows you to tell them: "thank you for your time as tenant... best of luck to you in the future.")

The next time you communicate with this individual be friendly, be courteous - but by all means... be the Owner.

Cheers.