Existing Tenants/Leases - No Late Fee

[Jordon P.]

Purchased a 3-unit in Pennsylvania October 2018 that was fully occupied and leases in place. Rents were paid a little late in November and mostly on time for December, except for one unit. He texts me today and says he will pay the rent on the 12th and sorry for being late. I said that is fine but the late fees are such and such and that he will be required to pay them. I also stated that I sent him over two letters outlining the late fees (which I did and he acknowledged) within the first two days we took over the property. He replies that his existing lease says nothing about late fees and he flatly refused to pay it. I checked over the lease again and he is right. It does not address late fees anywhere. 

My question is, if the existing lease doesn't mention late fees, am I able to set the policy myself? Should I just process an eviction when he doesn't include the late fees with his payment on the 12th? What is my recourse here? I am hoping that I don't have to wait this out until his lease ends. 

Please reserve comments about not addressing this lease before purchasing the property. The other 2 leases have late fees mentioned, but we overlooked this discrepancy in the due diligence process. 

[Anthony Hurlburt]

If there is no late fees stated in the lease then there are no late fees that he is required to pay. Is there a date stated as to when rent is due and when it is late? You are still able to evict for non payment if they are late.

[Jordon P.]

Yes, it is stated that the rent is due on the 1st. No mention of when it is considered to be late. 

[Justin K.]

You assumed (took the previous owners position) on his lease when you bought the property.  So you are stuck with it, unless his lease afforded a new owner the right to terminate the lease within X number of days of acquiring the property, but my guess is the lease wont say that if it didnt even talk about late fees.  You could always offer him $50 cash to sign a new lease with you at the first of the year.  You pay him $50 in order to get a real lease in place.  You also lock him in to renting from you for the next 12 months.  If I am him though I wouldnt take the $50, at which point you have to live with him being late or you have to file eviction on the 8th (after serving proper notice to him on the 1st) for non-payment of rent, as mentioned above.  The devil is in the due-diligence details.  Chalk it up as a learning experience and move on.  I own a handful of properties now and have missed something in due-diligence when we purchased every single property.  Thankfully nothing too costly.  Although it sucks, its cheap tuition to pay.  

[Dennis M.]

@Jordon P. So What does it say about quit or pay notice being posted and what does it say the timeline is for evictions to be filed ??? All important information we need to know

[Dennis M.]

Just because you can’t institute a late fee doesn’t mean you can’t give him a quit or pay notice . In pa. On the 5th day you give him the notice then you have ten days at which point you can file for eviction if he still hasn’t paid . Being it’s the 5th today I’d hand deliver him a quit or pay notice and tell him on the 15th if your not paid you will file to throw him out . Inherited tenants usually suck . Whatever you do -Donot cave to these people or they will steam roll over !you be firm right out of the gate . He’s already pushing you to see where your line is . Let him know there’s a new sheriff in town and late or non payment won’t be tolerated . They will all talk amongst each other in your triplex and word will spread that you don’t take crap .

[Matt A.]

@Jordon P. - Youre unfortunately at the mercy of the existing leases. From my experience (all my units ARE in PA, and I have had this situation myself) you need to concern yourself with a couple areas of the lease... 1) Does notice have to be posted? (meaning is there a waiver of notice clause in the lease?).  2) late fees - you already mentioned that.... NONE so it stays that way, and any other 'terms' that might benefit or encumber you.

IF the resident waived notice to post (that pesky "pay or quit" notice) you can head straight to the magistrates office. If there is no mention of it I would post notice immediately once rent is late. (check with your attorney on the time requirements actually IN the notice... 10 days rings a bell, however I am NOT an attorney, and personally I would have my management company do this for me). Soon as that period runs its course you can file for eviction. 

The bigger question I would ask - how much time is left on his lease, adn is it worth going through eviction? THAT is going to cost you in hard money - and possibly you getting the property torn up. If they know the landlord / tenant laws in PA they will surely drag this process out for a few months... and once they appeal to Common Pleas court your best to hire an attorney... this 'aint DIY court anymore (and that's where the charges begin to pile up).

Wile you might "win the battle" by getting your tenant out sooner, be prepared to spend some time & money getting the place ready for your next tenant. December, Jan, Feb,.... heck even Marc sucks for renting! I have a couple leases that come up in march - haven't had anyone opt NOT to renew as they simply don't want to move in the winter! Now that all said, If I had a unit that I wanted to rehab (and Ive got a couple of those myself at the moment), wanted to increase the NOI on the building, AND I had a tenant in that unit not paying... I wouldn't hesitate to accept nothing but rent in full, by the due date. (this is where electronic rent collection comes in handy - we can and will demand rent in full, especially once a tenant has been late a couple times - Ive got one now in fact) and prepare for a winter rehab. April is a GREAT time to start the rental season here and having 60 days to gut a place, put new into the unit and raise revenues.... well that's exactly my strategy - I just dont like tossing someone to the streets to do it however.

Just think about the potential hard / soft costs of eviction... you can probably kiss any judgement goodby. You'll spend court fees, lost time (and time is money), and loose hair (look at my Bio picture.... Or ANY Presidents picture when the came into and left office!), and generally feel crappy. Its an individual decision, 

[Mary M.]

Suggest finding the local landlord advocay group and get to a landlord bootcamp training session so you can learn your local laws.  

Also, it sounds like every other landlord will be starting on reno projects in april so probably you wont be able to find anyone to do the work for several more months. 

Imo it is better to lay down the law and keep tenant until a better time to rerent if at all possible. 

[Mindy Jensen]

@Jordon P., this is when you need to learn your state's landlord tenant laws. Some states have a grace period, some do not. Rent is due on the 1st and late on the 2nd, regardless of grace period. (All a grace period does is give them X additional days to pay rent, it does not make that rent any less late.)

Before January rent is due, read your state landlord tenant laws as they pertain to rent collection and eviction. If January rent is late, post a pay or quit the very moment you can. 

[Dan Maciejewski]

In my state, the rent is late on the 2nd (given that it was due on the 1st) if the lease doesn't give them extra time, so your recourse would be to serve the 3-day notice and then file for eviction if they didn't pay in that time.  No late fees would be allowed to be included if they're not in the lease.  I don't know the time frames for your state -- @Mindy Jensen is right, you'd have to read your Landlord-Tenant act for the actual time frames.   You do have to honor the current lease for now, you can't unilaterally amend it to include late fees.  

Or you could accept that he'll pay and wait until the 12th to serve the notice if he doesn't pay then.  

Since the lease doesn't have late fees there aren't any for him to include with his payment, should you choose or be forced to accept it -- he would be an idiot to pay more than his contract calls for.

Your recourse is to attempt to get him to sign a new lease, but you can't force him -- he's already under contract, so he has no incentive, unless you give him one, to sign a new one.  The incentive might be not serving notice and not filing for eviction this time -- I'm  not sure of the legalities of that -- check with a lawyer!   Or just serve notice and file and go through the eviction process.  Or cash or some incentive for a much sooner move out day.  

You have options, just unilaterally adding late fees isn't one of them, unfortunately.