Tenants Making Rent Payment

[Brandon Ness]

This is my first rental property- a duplex in Sioux Falls, SD. Inherited one tenant, who has been good so far. The other tenant I moved in; fully vetted, including employer reference and last 2 landlord references, all of which were positive. I tried to run credit, but they had insufficient credit history, so I waived that requirement.

Issue is, currently has been a struggle getting them to adapt to an online system to pay rent. The first month, I tried to have them use Venmo, but they couldn’t figure it out, so I had to drive out to the property and accept cash. Not wanting to repeat, I mailed them an invoice for the cash payment, stating that from now on rent payments would be done through the Cozy system, which I think is an easy interface to use for both parties. I also texted them & emailed them reminders to set up there payment method in Cozy several times throughout the month of December (all of our direct communication up until this point is through text). However, Jan1 rolls around and no rent payment. So I reach out, and they say they’ll pay today (Friday, Jan 4). Today, they text and want to pay via money order, and they want me to pick it up. I’m out of town, so this won’t work. My questions are:

1) how would you deal with this situation? 

2) at what point do you evict for a situation like this? Still have not received rent; lease has a 5 day late fee, after that period has passed, how soon to eviction?

3) do you waive credit requirement if no credit history, or was this a bad sign? Tenants are a couple in their late 20s.

Thanks for any and all feedback.

[Kelly Byrd]

Did you discuss the payment process as part of signing the lease? 

In the future, decide on one (or maybe a few, your choice but don't make it too many) payment options. Write those down in a "new tenant guide" or maybe in the lease. Make sure the prospective tenant understands and agrees to use one of those and it is written down. Then be strict about it. Train your tenants how to treat you.

As for what to do now, do two things:

1) Get the now past due payment however you can. If it's beyond 5-days, serve the 3-day notice to start the eviction process. You don't have to evict, but starting the process starts the clock so you can if the tenant doesn't cooperate. 

2) Figure out how you're going to get paid in the future. Pick one method, get the tenant to agree, get it in writing. Hold them to that. You could run a trial of the system before rent is due. Have the tenant pay you online something like $5 then hand them a $5 bill just to prove they can make it work without the pressure of overdue rent. 

In general it is the tenant's responsibility to get you payment, but it is your responsibility to be clear with your expectations, since you weren't clear from the beginning, I would give them a bit of a pass, but you need to be clear from now on.