Investor · Blacksburg, VA · Member since 2016 · 18 posts · 2 votes
This should be Landlording 101, but ...
I've had this tenant for three years now. She owns a small business in the town and he works for a company that does work on roads - on and off. They have been late with rent a few times, but they've never missed a month.
Last month they were late and I charged them a late fee. They dropped off the check for the original amount because "they already wrote it out." I asked them to include it in this months rent.
This month, I have still not received rent. I keep getting updates that they will do it "today" which obviously hasn't happened.
What's my next step? At what point does it go to small stakes court? I'm frustrated with getting the runaround this month and last month.
Real Estate Agent · Newport Beach, CA · Member since 2017 · 259 posts · 293 votes
9y
Hit them with a notice. Unfortunately as landlords, it's important to draw the line in the sand. Sometimes you need to hit them with a notice even if it's only to show them that you're serious about late fees.
The other concern I have is that at least in California, it's important to do everything by the books that way a tenant doesn't have the opportunity to come back and say "but that's not what you did last month".
Sometimes when things get too fuzzy, you gotta go with CYA and the law. It's not fun, but they put you in a tough spot. I would give them a pay or quit notice and say "you guys aren't paying your late fee nor rent at all. You give me no choice. Just because you two have decided to skirt your financial responsibilities, doesn't mean that I will follow suit. Pay rent and include the late fee from the last couple of months and this can all go away. Otherwise, I need to exercise what is in my right to protect my business." Obviously do what's most comfortable to you, but you gotta do what you gotta do.
Spring, TX · Member since 2014 · 75 posts · 39 votes
9y
Starting the eviction process will either get them to take action or it won't. Either way you gain clarity on your next steps. Also, in the future, don't accept partial payments. If you do want to evict, a partial payment complicates things. Lastly, consider collecting rent online in the future. You can add late fees automatically and there are no excuses for things like, arranging time to meet, or not having another check...
Rental Property Investor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Pawel N. Stop chasing them and just file for an eviction. If they pay you can cancel it, if they don't you follow through. Plain and simple. Rent collection should not include a monthly drama filled dialogue - you have better things to do with your time.
To add to what @Don Daniels mentioned, I'd check your local laws on the implications of accepting partial payments. In some states it can cause problems but in others it does not. I'll gladly take partial payments and still evict.
I just evicted one of our tenants. After the 15th of the month I figured I have to initiate the eviction process right away. We just had our judgement last week. In the end we lost about 2.5 months in rent that we need to try to get it back from collection. We did pay the lawyer and servicing fees of around $1000. In addition, now we have to fix up the unit and get it ready to be rented as soon as possible. I am telling you this because once they get themselves into a situation that they cant even pay their rent it is very hard for them to fix it. For me, as long as I have a firm date of when I will get my rent I can let it slide with a late fee. Once they postpone it 3+ times or stop communicating with me then I rush to the eviction lawyer. The first time we waited we lost 4 months of rent. This time we acted quickly and were able to get possession back in 2.5 months. Remember you have a mortgage to pay too so dont let them screw up your investment with lag of financial discipline. Also, if you are in the middle of the UD lawsuit please go through all the way so that they have it record on their record so that other landlord are aware of it too.
Investor · Norman, OK · Member since 2015 · 5 posts · 3 votes
9y
As far as the $, if they do pay you something for this month, the first portion of that is your late fee, the remainder is the rent. If they just pay the rent amount, they will be behind again. If you have a grace period on the rent (ie...due on the first, late on the fifth etc...), and it isn't past it, you should contact them and let them know that they are behind the amount of the late fee, and give them the opportunity to catch it up before they are late. Like everybody else has said, serve that notice as soon as they are in breach.
Serve them a 5-day pay or quit, which is the first step in the eviction process. Most people it gets them to realize you are serious, if no payment, start the eviction process.
Remember 1 thing.. there is always enough time and money for what's important to you, so for them not to pay you, they are telling you they think you're lower on the totem pole than other bills.. make sure to be very upfront, stern and fair.
Landlords need to be on top of their business responsibilities at all times. When rent is due on the first non payment notice should always be issued on the 2nd of the month. Landlords that do not immediately begin the notice/eviction process are not operating as a business. Non professional practices will normally result in major financial losses.
Learn your state landlord tenant codes and always follow them to the letter.
When tenants pay late it is because their landlord has trained them that payment on time is optional.
Real Estate Broker · Temecula, CA · Member since 2014 · 992 posts · 782 votes
9y
Put a notice on their door today and demand payment of rent. No need to track them down, sjut read up on the laws of your state or hire an eviction attorney. No more excuses. They signed a lease and they need to honor it. You are a business person, not a charity.
Lexington, KY · Member since 2017 · 19 posts · 64 votes
9y
Would it be easier for you and them if you moved their due date to the middle of the month? Just charge them a pro-rated amount for the first half of the month then make them start paying on like the 15th? Not saying you shouldn't evict them, but if they're consistently late to the point of eviction, this may be a way to avoid the headache of doing that.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
9y
@Pawel N. Send them a notice. As others have said, it could be a situation where they are making you wait to get paid because their other creditors draw a harder line when it comes to being paid. On the other hand, they could have simply come on hard times and have no money. Neither of which you should be concerned about and sending them a notice covers you in both situations.
Investor · Oklahoma City, OK · Member since 2015 · 48 posts · 86 votes
9y
Remember the game "musical chairs"? As a landlord, I try to impart to my tenants the priority of paying rent over anything else. If they owe 5 people $100 each but only has $400, somebody is going to be left without a chair when the music stops! Don't let it be you!