Tenant does not pay rent. What incentive should I offer?

Question

Tenant in Ohio does not pay already for 3 months.

Before pandemic this tenant also was late with payments, so on my opinion most likely she is taking advantage of the situation.

Debt amount already is almost $5K.

Tenant could not provide any proof of pandemic related financial issues.

I tried to give tenant like 10% discounts and things like that. But nothing worked.

Should I forgive her 1 month of rent and see if this will help? Or this is too much?

Any advice appreciated.

Thank you

Rochelle Thea Fabrizio · Answer

@Oleg Serdyuk I agree with @Marc Winter. They DO NOT deserve a cookie for anything. Nobody should be incentivized to do their basic required task, which in this case, is pay for their housing like the rest of us adults. You need to get them out ASAP. This has become a norm for them and will continue to be so until you take action. Occasionally, you will find a tenant that will begin to do the right thing if you start to take action and move towards the process of eviction. But likely she will just leave, not pay you a dime, and move on to the next unfortunate landlord. If at all possible report this to a credit agency so she will have some consequence and other landlords can take note and hopefully save themselves a headache. Best of luck!

Marc Winter · Answer

Best to check with your state's eviction moratorium decree, and when you are able to file, get that tenant evicted!

There are a few tenants that are just gaming the system.  Don't think you have to offer any consolation prize.

But remember, going forward, once you train a tenant that they can pay rent late without consequence, you have created a monster.  A $5K monster in this case.

Anna Sagatelova · Answer

I'll just add that Ohio never had a state-wide eviction moratorium, it has always been jurisdiction by jurisdiction. Some courts are opening back up, though CARES Act may still prevent you from filing. What city is this property in? Is your tenant on Section 8? Do you have a federally-backed mortgage?

Absolutely no incentives; not only will they not work, they'll show that you reward terrible behavior.

Lee Yoder · Answer

@Oleg Serdyuk

I'm sorry to hear about you having to learn this lesson the hard way. I'm a MF investor from the Cincinnati area. I've been lucky enough to have avoided this situation so far with my 34 units. I have my properties professionally managed, so I wouldn't be the one working through this, but I'd be the one losing the money. Let me know if there's anything I can do to help. I have a lot of contacts in Cincinnati.

Oleg Serdyuk · Answer

Thank you Anna. City is Cincinnati, OH.

Tenant is not section 8 and mortgage is not federally-backed.

Eviction filed, but the earliest date tenant can be evicted I believe is end of August. Which is another 3 months.

Well, learning my lessons hard way :)

Nathan Gesner · Answer

I would reward them with an eviction, el pronto!

If evictions are not allowed, I would send them a very brief, formal letter that lets them know I will pursue eviction the first moment I am able and that I intend to seek a judgment for every penny owed.

I certainly wouldn't offer them any reward. They're clearly not making any effort, so why should you?

Jonathan R McLaughlin · Answer

@Oleg Serdyuk I would post the notice and ALSO spend a few hundred bucks to have a lawyer draft a letter. Suggesting this because I’m afraid you have trained them to disregard your notices and attempts. Seeing a letterhead and the process may restart this. 10 to one she then calls and “tries to work something out” don’t let her it’s good money after bad.

Percy Matsunaga · Answer

@Oleg Serdyuk

I’m sorry to hear about the loss of rental income. but this definitely could be a learning experience for us all.

Could you walk us though the steps you took to start the eviction process.

Theresa Harris · Answer

I'd tell her she's behind on rent and needs to find another place to live. If she can't prove that she was out of work, I would not forgive any of that.  She's unlikely to pay it.  tell her she's better off leaving now than having you complete the eviction as that will stay on her record.

Adam Martin · Answer

I would post a notice on their door with the incentive if they voluntarily leave by the end of the weekend that they won’t have an eviction on their record.  If you don’t think that you will collect on a judgement or just don’t plan on going after them you could offer to waive their balance owed minus the security deposit to see if that would motivate them to leave on the condition that after a specific date the offer is forfeited.

Tenant does not pay rent. What incentive should I offer?

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