Rent is late, but tenant has a story. WWYD?

Question

Tenants moved in 11/1/18. Property is out of state. I manage, but have a friend locally whom I pay to handle things I cannot do from afar.

Tenants have done a few things that have caused me to question their honesty. I have no hard proof, but I’m suspicious of their stories.

Make tenant called me three weeks ago and told me he’d just got out of the hospital, and wanted to give me a heads up that rent would probably be late. I told him that I was sorry he was in the hospital, but that rent is due on the 1st, and that he has the 5 day grace period until late fees are incurred. I also told him that to protect myself, I would need to start the eviction process on the 6th (today). His wife texted me about a week ago with an update, letting me know rent would be paid in full, with the late fee on the 14th. I thanked her for the update, but told her I would need to begin the eviction process on the 6th to protect myself. She said she has “never had a landlord do that to her before”, and she didn’t understand why I would be doing that. I didn’t respond. I also thought it interesting that this has apparently happened before. Not good news.

So, I’ve created the pay or quit notice and will have my friend deliver it today.  It gives them 3 days to pay or move out, then I need to get the sherif involved. I don’t mind waiting until the 14th to see if they make good on their promise, but if they don’t, I want to be poised to evict them on the 15th. But that timeline doesn’t work with the timeline for the state of ND.

What would you do? Wait until the 11th to send them the notice? Send the notice now and then wait until the 14th to follow through with the Sherrie (I’m worried if I don’t follow the process to a tee, my abilities to evict might be jeopardized.).

This is my first situation like this as a landlord. I want to be firm, kind, and hold my ground, and not mess up my chances to get them out ASAP if they don’t pay.

Jace Holt · Answer

Start the process so the red tape is removed if it becomes necessary to remove the tenant. When they start trying to bully or get manipulative, they lose any flexibility with me. “never had a landlord do that to her before” sounds like an attempt (conscious or subconscious) to bully and make you feel like you are the only landlord who would charge them because you are so heartless. You can avoid the issue here the most by setting better procedural rules for tenant screening/on-boarding (that's a post for another day) and procedural rules for tenant removal.

My rules, which vary significantly depending on what state the property is in, give the 5 day grace period before late fees on rent. A set number of days after that they are attempted to be contacted by phone, email/software, and text etc. A set number of days given the notice to quit/cure. A set number of days later they get next step and so on and so on. Learn your states law, then build your own written procedure and schedule. Make the schedule and steps so simple, direct, straightforward, and automated that a 12 year old could easily run your management system.

Except for the 5 day grace period and late fee, I don't publish this schedule in the lease agreement so they don't game the system. It is, however, in the manual I wrote for the managers. My only exception to the rules and procedures for my tenants is that I allow 2 months of no fees and allow them to break the lease if the primary income earner on the lease dies and they let me know they can't pay rent. I've never had that happen so far. Every other tenant situation is still bound by contract to pay rent.

I would suggest setting up a system like this. Decide where the line needs to be drawn ahead of time. Once you have rules, you can take your emotions out of the equation. You don't have to spend emotional capital and subject yourself to bullying every time someone wants to be an exception to the commitment they made.

So many managers are terrible managers because they never took the simple step of deciding what the rule was ahead of time when nobody was pressuring them. They get burnt out repeatedly making judgement calls where they continually try to emotionally connect with the tenant's situation to decide where to draw the line when instead, they could have made the decision once without any pressure on them.

Doug Pintarch · Answer

I agree with the comments above.  Don't care about your sob story, your kid ran away, your cat died, whatever.  Pay me or pack your s***.

Humans, they'll game the system.  Every time.

Joe Villeneuve · Answer

You're handling it correctly.  Follow the letter of the law from the state.  Once you set a precedent with the state and the tenants of not following the letter of the law, then you will lose at least one month, and your tenants will know you're a softy.

Just have your "rep" explain it isn't your desire to go through with this process because you like them as tenants, but by law you must.  If they say again that they never had this happen before, then ask them how many times it has happened before (put them on the spot).  BAsed on their answer, I figure you would know how to proceed from there.

Also, before you actually process any eviction, I would recommend attending one of the court eviction dates to see how it is done.  What you're looking for primarily is what to do, what NOT to do, what to say, and what NOT to say.  I did this by accident (I arrived early for one of my evictions...the first), and I was glad I did.  I got to watch 3 evictions before me, and what I learnt was priceless.

Chuy Gonzalez · Answer

Hell no. Start the eviction process. They are going to be a pain in your ass until you get rid of them.

Thomas S. · Answer

A pay or quit notice is issued the day after rent is due when not paid in full. When it is issued has no relationship to any grace period. The grace period only applies to late fees and is irrelevant in regards to when the rent is actually late.

What your tennats are doing is unacceptable and you should have begun th eevictin process on the 2nd with th epay or quit notice. Likley hood is these tennats will need to be replaced so do not waste time by delaying the process. Follow through with the state indicated time lines.

The problem is your tennats not yours, they need to pay up immediately.

Jennifer Rysdam · Answer

Stick with your guns. You are showing them that the lease is the lease and you mean business. If you let them get away with it, they will do it again. You wouldn't ask them to pay your rent/mortgage. If they are short on money they need to talk to the bank, family, friends, parents, church, etc., not you. It's hard, I know that very well. I have gotten myself into some messes and wished I had followed my own policies. Lesson learned. You'll be glad you followed through.

Sarah Young · Answer

Thanks everyone! My friend handed them the Three Day Notice to Quit yesterday. I was considering waiting until the 14th to see if they pay before I submit it through the courts and have the sherriff go out there, but after reading all these comments, I’m thinking I need to have the sheriff go so I am crossing my I’s and dotting my T’s.

John Pierce · Answer

I disagree.  How long have they rented from you?  Have they been late before?  If these tenants have rented from you for a while without problems, why throw them out?  Send the pay or quit notice to protect yourself, but don't start the eviction unless they don't pay when they said they would (with the late fee, of course).  Waiting an extra couple of weeks for your rent is a lot less trouble than turning a unit, and a lot cheaper.

Michael J. · Answer

I went through this with a tenant and lost several thousand dollars. Follow the lease. Start the process ASAP and if they continue renting from you then they know that paying the rent two weeks late is not a option.

The problem is even if they pay on the 14th they only have two weeks to com up with 4 weeks of rent, the. They have to push it up to the 16th before they can pay the rent and on and on. They will get in a hole that they can not dig out of and will never catch up on rent most likely.

Matthew Drouin · Answer

@Sarah Pursell stick to a strict and uniform collection policy across the board.  This is even better managed before signing the lease so that the tenant knows you are the most important bill collector of the ones they juggle.  Most importantly, this is why background and credit checks are paramount on the front end.  You would rather have an apartment vacant for 5 years than rent to a bad tenant.  Credit and income are the best determining factors on evaluating a tenants ability to treat you and your property well.  High income good credit 95% of the time you will be ok.  In my 13 years of doing this, I have only had to evict one tenant that I selected.  She was a pharmacist who lost her mind.  Go figure.

Rent is late, but tenant has a story. WWYD?

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