When Tenant calls and tell you they will be Late on Rent

Question

I have had a tenant call and tell me he will be paying his rent 2 days after Rent is Late. (Late on the 6th, says he will pay on the 8th). I have told him he needs to pay by that day and pay the late fee. If he fails to pay on that day, I will be placing a 7 day non-compliance warning for termination of lease on the front door and document this through pictures. I want to be firm, but still be as smart as possible about my approach to this kind of situation.
    What would be your response to this situation when you have tenants calling your phone and telling you they will be late on rent?

Thanks,

Mike Hill · Answer

I would have to agree with Kyle Meyers. It's really a pain when you don't get your receivables on time. However, to avoid such situations I would have a two-level approach. First: Before accepting tenants, I would interview them with probing questions like "how long were you renting in your previous place" or something like "Where do you work". Anything, that would be very subtle but at least could paint a picture how will your tenant be acting on his responsibilities not to mention taking care of your property. Second: If you are on the point where you already have a tenant and he/she starts missing due dates. Setup a "3 strike policy", just be firm with it. Make it clear that as much as you would value your tenants you are also running a business. A tenant should always be cautious when it comes to due dates. He/She should inform you at least 5-days before hand if payment will be late. 2nd strike, enforce a overdue fine. 3rd (and hopefully would not be invoked) is a legal action. <<>> Communicate discipline in Payment and Due Dates while at the same time valuing Landlord-Tenant Relationship.. =)

Kyle Meyers · Answer

I will work with tenants if the contact me before the due date and let me know what the problem is. If it is a one-time issue, I will consider waiving late fees or setting up a payment plan. If there is a continuous problem, I can change the due date or payment frequency in the lease. I try to fix the problem in a way that works for me and the tenant. If they continue to pay late, I enforce the late fees and pay or quit policies. Sometimes, just enforcing the late fees will force a tenant to take a look at their finances and find a way to make it work.

Jonathan Sher · Answer

Jon has a good point about figuring out why they are going to be late. It might be a made up story but it's good to ask. In my book it's good that the tenant called and told you this. Hopefully this is a good sign that it's a legit reason and you will get your rent a few days late with late fees and everything will be good from that point on. It's bad when they are late, and you don't hear from them, at least there's a sign of pro activeness.

I had a tenant that was late a few days each month. It was due to the timing of her paycheck like Jon mentioned. I kindly adjusted the payment date a few days for the tenant, which she greatly appreciated and everything has been smooth since then.

Rich Weese · Answer

Very seldom do I accept late rent without a late fee charged. I do however make one change.

When I serve them the eviction notice, I do put on a happy countenance and smile... Rich

Jon Holdman · Answer

Any explanation as to why the rent is late?  It may or may not be the truth, but he should have some explanation.

I've done this several times.  In one case it bit me.  The tenant was later and later and finally bugged out.  In other cases, they have paid the rent and late fees as we've agreed.  Enforcing your late fees usually motivates them to pay on time in the future.

Sometimes paychecks don't line up with the first and the tenant will end up consistently being late.  In those cases, I adjust the due date.  If its only a couple of days (e.g., rent is due by the 4th, but they can't pay until the 6th), I'll just adjust it and increase the late fee.  If it was more than a few days, I'd get a payment for, say, a week, and then move the due date back a week.