New Tenant Asking Asking To Pay Late

New Tenant Asking Asking To Pay Late

Rental Property Investor · Bradenton, FL · Member since 2016 · 56 posts · 17 votes

Dear Fellow Landlords,

I just placed a new tenant into my freshly rehabbed 2 bedroom apartment which is part of a 4plex. As I'm new, I feel like I screened her thoroughly and she came back good on all the checks I made following Brandon's screening guide. She moved in on September 1 and since we are based in FL, hurricane Irma came through just a few days later causing us to loose power and I believe she left town for a week. She just sent me a message today stating that, since she was not working for a week, she cannot pay Octobers rent in full. She would like to pay half on time, and the remainder on the 6th. 

I'm in two minds about this. Everything I hear and read states I should continue to charge a late fee no matter what. My late fee is only $5/day after the 3rd so we are only talking $10 in late fees. My lease also states that "if tenant is late paying on two or more occasions, landlord and landlords option may terminate the lease". 

This is what I feel would be an appropriate response:

"Dear ####, thank you for informing us of this situation in a timely manner, it is appreciated. Hurricane Irma was a very bad situation for many of us in the SW FL region, we are all very thankful it was not as bad as it could of been. However, as I'm sure you can appreciate, here at ABC Properties, we also have overheads to pay for and none of our accounts are allowing late payment, we therefore take late rent payment seriously and as stated within section 1 of your lease agreement will need to charge you a late fee of $5/day until rent is paid in full. Please also note that should rent be received late on more that two occasions within a 12 month period, ABC Properties have the discretion to terminate the lease. Regards, Management"

Too harsh? Would welcome thoughts?

Thank you!

Matt

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Dana WhickerPro Member
Investor · Fernandina Beach, FL · Member since 2014 · 557 posts · 374 votes
9y

In my opinion, events like Irma are an exception where there is a bit of wiggle room, the only other exception I've allowed in 19 years is a medical emergency of the tenant. 

On the other hand we are only talking about $10. If it were me I would give her a muligan on this assuming the rent is paid in full by the 6th and get back to the letter of the lease next month.

That's just my 2 cents.

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  • Dana WhickerPro Member
    Investor · Fernandina Beach, FL · Member since 2014 · 557 posts · 374 votes
    9y

    In my opinion, events like Irma are an exception where there is a bit of wiggle room, the only other exception I've allowed in 19 years is a medical emergency of the tenant. 

    On the other hand we are only talking about $10. If it were me I would give her a muligan on this assuming the rent is paid in full by the 6th and get back to the letter of the lease next month.

    That's just my 2 cents.

  • Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    9y

    No need for the big explanation, IMHO.  In this case she has a reasonable excuse that you know is real.  Yes, everyone should have emergency funds to deal with situation like this.  But few people do.  So just say "that's fine, but the late fee will be $10."

    Honestly, given the situation and it only being two days late and her offering half and half, I'd skip the late fee.  I'd say "I understand the situation and, given the circumstances, will waive the late fee this time."

  • Member since 2016 · 13k+ posts · 12k+ votes
    9y

    $5 a day is definatly not a deterrent and should not be a issue for your tenant to pay. Your letter is appropriate although I would simply leave out the part regarding the ability to terminate. It is irrelevant to the issue at hand and may simply come off as a threat. Since you probably do not know your tenants personality it is best avoided at this point. 

    Considering she is a new tenant and at this time should of had the money prepared to pay October rent regardless of the situation my guess is she is simply using you as a temporary cushion rather than  understanding where her priorities really are. She should be paying you first and since she is not she must pay the fees.

    Some may advise forgiving the late fee. They unfortunately do not understand the importance of maintaining a professional approach to operating a business and in doing so will set their tenants up for failure in the future. Bottom line is that when considering late fees if you do not intend to impose them in all cases you should never put them in your lease. 

    I believe your approach is fair and professional and sends a good message to your tenant that she can expect to be required to follow her legal lease. At this point in your tenant/landlord relationship  compassion will be viewed as weakness on your part if you do not follow through. It's the principal not the amount owed.

  • Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
    9y

    @Matthew Dunn,

    If I were in your shoes, given the situation with Irma, I'd let her know that it's fine and waive the fee if she pays on the 6th.     It's an extreme situation, and her losing work wasn't her fault.      You could let her know that even though you will waive the fee, it will still count to the potential termination clause.   If she's communicating, and being upfront with you, it sounds like a good potential tenant.   

  • Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    If it were me I would have no problem with the rent being paid like this.. and she's giving you headsup that's what she's able to cope with right now, and the storm is and has affected alot of people.. she may have family that had losses..

    She's not asking to live for free.. I'd let her know you would accept the payment terms and this one time the late fee will be waived as long as balance of rent is paid in full on the 6th.

  • Rental Property Investor · Bradenton, FL · Member since 2016 · 56 posts · 17 votes
    9y

    Great feedback, thank you all for the speedy replies! I replied requiring the late fee be paid, but did not make mention of the termination clause. I'll feedback once I get a reply, so you can see what kind of reaction I receive. 

  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    9y

    @Matthew Dunn , I think your response would be justified except for Irma. It's a great note, keep it for further down the road, but give her a pass on this one. With all the properties that were damaged, the fact that you can actually  keep collecting rent is a bonus.

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