Keep or evict chronically late tenant ?

Question

Hey BP, So I have a tenant in a SF property, since April 2017. Chronically late, normally gets caught up, and takes pretty good care of the property. I’ve finally had enough, and filed an eviction. Hearing was this morning. Owes me about 2 mos rent, he has 10 days to now either come up with all the $ or a plan that I agree to. He makes good $, it just appears as if “something” always comes up... my question is.. if he doesn’t come up with all the money, do I just file for possession and be done with him or give him one more chance?

Bryan Scott · Answer

Taking a quote from your post, "Hey BP, So I have a tenant in a SF property, since April 2017. Chronically late, normally gets caught up, and takes pretty good care of the property."This is a pretty good step in the correct direction. Having been a landlord for 20+ years, this is a good start. Paying late, but paying, is a nail-biting relationship for sure. Rather than giving this tenant the final boot, which undoubtedly will cost you (and him) an expensive turnover, why not ask him what he thinks would solve the problem? In the past, I have adjusted the due date, set up 1099 type tenants on a quarterly payment schedule, requested (and received) 2-3 months rent in advance, sold the property via lease/option, etc.I get that the norm is rent due by the 1st, late fee accrues on the 6th, but this tenant's situation apparently doesn't fall into the normal category, so ask the question, then evaluate whether you can live with (and accommodate) the answer.Good luck!

Soh Tanaka · Answer

You already gave him a chance. That's why he owes you 2 months rent. I can't come up with a good reason to give him another chance.

Johann Jells · Answer

If you want to give him one more chance (no reason why you should) tell him it's automatic payment like Cozy or he's out. I was a chronically late rent payer way back when, simply because I was poorly organized. Automatic payment of everything changed my life!

Marcia Maynard · Answer

You've pretty much answered your question..... "finally had enough". Once you file for eviction, follow through. Also, revisit the terms of your rental agreement to make sure they are solid and the tenant understands them clearly. Develop the moxie to enforce those terms. Your lack of firmness over time may have lulled this tenant into putting less priority on paying his housing bills.Some tenants are chronically late and pay the rent by mid month, plus the late fees. Some landlords realize this puts extra money in their pocket and are fine with it.However, once a tenant has not paid the rent by mid month, it's hard for them to get back on track because the next month's rent will soon be due as well. That's the time to talk about a move-out plan. You can save money by mutually agreeing with the tenant to end the tenancy and their voluntarily moving out. But once it goes as far as filing an eviction with the court, it's best to follow through with the eviction..

Terrell Garren · Answer

When I was on active duty, there was a saying "If you think you need a haircut, then you need a haircut". I've found the same applies to misbehaving tenants "If you think you need to evict, then you need to evict".

Bryan Scott · Answer

Hi Matt, When I mentioned 1099 type tenant, I am just referring to self-employed tenants with cash flows that might vary widely at times depending on their receivables aging. I have a client right now who is nearly exactly the same type. He makes really good money doing commercial tenant finish, but his clients pay about every 60-90 days. His issue filters to me in the form of late payments for 2 months, then he catches up. To eliminate both our frustrations, we agreed on quarterly payments, which works fine by me and solved his problem as well. Since making this adjustment, he has not missed a beat and has saved a ton in late charges.Good luck with it!

John Morgan · Answer

@Matt Michaelson I just got burned by a tenant like this. She would get behind in rent by a month or so. Then pay the late fees and get caught up. I worked with her until she got 2 1/2 months behind. I finally evicted her and never recouped the $. That’s what I get for being nice and working with her after a job loss and other personal problems.

Bryan Feik · Answer

@Matt Michaelson I’ve managed my own rental properties for well over ten years. In the beginning I would work with people, change monthly due dates, and allow them to be chronically late. After being burned multiple times I now let them “cure” a three day notice one time. You have to evict this tenant and never let someone get that far behind again.

Amy Beth · Answer

@Matt Michaelson. Follow through with the eviction which you already started. You already gave too many chances with the tenant being two months behind. I imagine that if the tenant pays up ASAP the judge will cancel the eviction. If the tenant resumes the same behavior again file much faster to avoid two months of not collecting rent.

Thomas S. · Answer

"We have a track record of very long tenancies"I also have very long tenancies, primarily seniors. This is one of the primary reasons why I place a great deal of importance on training tenants to never pay late. Over the years I have eliminated any that are so arrogant that they believe they can use me as a bank at the beginning of the month to cover other bills. The life of a landlord is far easier training tenants as opposed to chasing them.New tenants get three strikes then they are out (ideally). Luckily for me we have a immediate $190 penalty for paying late so it is rare for new tenants to make the mistake of a second late. Training tools are a valuable asset to your business. "it’s a little over two months behind with November around the corner."....Chances are they have made their decision and are biding their time till you post a eviction. Doubtful you will see any more rent. This is the reason you want to get rid of any tenants that can not be trained to pay on time every time. They will all eventually lead to lost income and eviction. Pay or quit needs to be posted immediately after rent is due. Time is money in our business.