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Updated over 3 years ago, 04/28/2021
Rent Collection in person
We recently closed on small multi family property in PA and have inherited tenants. Previous landlord went door to door to collect rents in cash or other tender and issued rent payment receipts.
I personally went to meet each of them along with previous landlord. All tenant but one were very welcoming. Let's call them a "problem tenant". The problem tenants are retired folks and are on social security. This problem tenant went on and on about issues they are facing during their current tenancy and stress it's causing them on day one. Maybe the previous landlord had different management style and was not responsive. (Property is in an urban area and rodents can get it.) Pest control was done last month by professional company and we offered to do it again (already scheduled) and fix other issues in the building. They were also not happy that the property was sold without informing them and it was not disclosed at lease signing 3-4 month ago. No other tenants had that many issues and were very understanding.
Initially, we offered online payment thru Cozy but quickly realized that some tenants would like to pay cash, check or money order. We then extended them an option to deposit rent at a local bank.
We have already received rents from all but that problem tenant (some online and some at bank). Even the tenant that we didn't expect to pay, after they discussed their job loss with me, have already paid. What a surprise.
This problem tenant insists that I must collect rent (2l Money orders) at their door, like previous landlord, and issue a receipt. Any deviation in rent payment methods causes them undue stress.
Previous landlord has her home address listed on the lease where the rent must be paid but she picked it up in person. Our bank is 2 minutes drive from where the previous landlord address listed on lease.
Since they are non responsive to my phone call before, I had to put a notice of pest control service on their door along with additional payment method with our bank information.
We have stood firm that we don't collect rent in person at their doorstep. In my opinion, it's not safe in any environment.
Is this tenant being reasonable? Are we obligated to collect rent in person and issue receipt? Also, in middle of this public health crisis? How should we approach this? Thank you
(We are predicting they will not pay rent and insist that we must collect. I hate to put notice to quit but we may have to)
My wife got into design consulting recently...and after I've been a 'freelancer' for the past 5 years, I had tips to share with her:
1) Despite common belief (and fear), YOU the expert are in charge. Not the client. You take the reins. You don't let them add things to the scope of work without expecting more money.
In your case, YOU are the boss. Not them. Fear of pushback or anything is not the way to go. Losing your cool with them on the phone puts you in a beta position.
2) Set expectations from day 1.
Unfortunately, sounds like you've already wasted a bunch of time on the phone with them.
I inherited a tenant a few months ago and they called me within the first 3 weeks at 4AM because toilet was leaking.
First, I didn't answer the call. Second, I didn't call them back.
Instead, I sent correspondence in writing to "train" them.
Also, I told them directly. "I promise to make necessary repairs within 48 hours (and I sent someone out that day). In return, I expect you to abide by how we manage our properties. First, don't ever call me, especially in the middle of the night. All requests go through email. Second, this toilet likely has been a problem for awhile (it was and rotted the floor beneath). It is your responsbility to tell me before problems get out of hand or you pay for it."
Haven't heard from them since except through email.
=============
Bottom line:
...you're the boss.
...you tell them how things go. Do it in writing. NEVER interact with tenants on the phone. I only talk to tenants on phone once and that's when I'm screening.
...if you don't have any legal way to get them out, someone recommended leaving X amount of envelopes with stamps and they can mail you a check.
Then, be clear with them that because they're being difficult, tell them now you likely won't be renewing their lease. You promise to answer repairs ASAP. In return, you expect them to follow your rules. If they are willing to get on board, tell them you'll reconsider.
Double-bottom line ---> you're the boss. Never let a tenant (or client) think they're the boss.
No a judge cant force you to go and pick up the rent checks. IF it ever goes to court, all you have to do is documents all of the other options you have offered in regards to the tenant making the payment..... you have offered multiple reasonable avenues to have the tenant get you the payment, so that avenue is closed as an excuse for them not making rent payments.
If you go the mail route......make it 1000% clear that the rent is to be RECEIVED by the 5th...... not MAILED by the 5th.... or a late penalty will be enforced. And be prepared for the " I mailed it and it must have been lost in the mail" excuse.
As Joe stated..... you are the boss.... this is your business...... this issue is not up for debate or negotiation..... these are your options to get me the rent.... use one of them or not and be prepared for the consequences of not paying the rent
Originally posted by @Filipe Pereira:
@Steve K. do you have an update as to where the tenants stand on this? You've gotten some awesome replies here and from the outside looking in, one of them should work unless your tenant is being completely unreasonable, at which point it probably makes more sense to just elect to not renew their lease, or post a notice to vacate.
Usually when it's this bad, it's only going to get worse.
If you think this is retaliation from them towards their previous landlord, do all that you can to square up any loose ends, but otherwise you have to keep things moving forward.
Grace period to pay ends tomorrow. I haven't heard anything from them. I get concerned if I forget to pay my bills, they don't seem to be.
I can could bad attitude very early, that's the case here. Yes, I'm tying all loose ends and taking care of all requests until now.
Originally posted by @Joe Cassandra:
My wife got into design consulting recently...and after I've been a 'freelancer' for the past 5 years, I had tips to share with her:
1) Despite common belief (and fear), YOU the expert are in charge. Not the client. You take the reins. You don't let them add things to the scope of work without expecting more money.
In your case, YOU are the boss. Not them. Fear of pushback or anything is not the way to go. Losing your cool with them on the phone puts you in a beta position.
2) Set expectations from day 1.
Unfortunately, sounds like you've already wasted a bunch of time on the phone with them.
I inherited a tenant a few months ago and they called me within the first 3 weeks at 4AM because toilet was leaking.
First, I didn't answer the call. Second, I didn't call them back.
Instead, I sent correspondence in writing to "train" them.
Also, I told them directly. "I promise to make necessary repairs within 48 hours (and I sent someone out that day). In return, I expect you to abide by how we manage our properties. First, don't ever call me, especially in the middle of the night. All requests go through email. Second, this toilet likely has been a problem for awhile (it was and rotted the floor beneath). It is your responsbility to tell me before problems get out of hand or you pay for it."
Haven't heard from them since except through email.
=============
Bottom line:
...you're the boss.
...you tell them how things go. Do it in writing. NEVER interact with tenants on the phone. I only talk to tenants on phone once and that's when I'm screening.
...if you don't have any legal way to get them out, someone recommended leaving X amount of envelopes with stamps and they can mail you a check.
Then, be clear with them that because they're being difficult, tell them now you likely won't be renewing their lease. You promise to answer repairs ASAP. In return, you expect them to follow your rules. If they are willing to get on board, tell them you'll reconsider.
Double-bottom line ---> you're the boss. Never let a tenant (or client) think they're the boss.
Thank you for the reminder, Joe. I have dealt many difficult folks over my career, most have gotten in line. They are not understanding that they will end up in court. Current moratoriums only protect people who were impacted by COVID not them. (We are not desperate to collect their rent). If they don't comply to any options, including pre-paid envelopes, and not pay rent, they are forcing us to evict them.
I'm putting letters/communications on their door and in their mailbox and taking photos as an evidence. That probably is the best option because tenant may not collect certified mail at the post office. Like one of the previous tenant did. They even showed up on my door uninvited to return the personal property they stole from me and asked where is their security deposit. (They owed us money for breach of lease but LL let it go). The reason they returned my stolen property is because I started to ignore them and I can because they were not longer my tenant.
My rule is no excessive texting, no instant gratification. Everything must be in writing.
"I sent correspondence in writing to "train" them" How did you send this correspondence, an email?
Originally posted by @Ned J.:
No a judge cant force you to go and pick up the rent checks. IF it ever goes to court, all you have to do is documents all of the other options you have offered in regards to the tenant making the payment..... you have offered multiple reasonable avenues to have the tenant get you the payment, so that avenue is closed as an excuse for them not making rent payments.
If you go the mail route......make it 1000% clear that the rent is to be RECEIVED by the 5th...... not MAILED by the 5th.... or a late penalty will be enforced. And be prepared for the " I mailed it and it must have been lost in the mail" excuse.
As Joe stated..... you are the boss.... this is your business...... this issue is not up for debate or negotiation..... these are your options to get me the rent.... use one of them or not and be prepared for the consequences of not paying the rent
If they were smart, they would use online Bill Pay. I think banks send out check or they can do ACH in receiver bank account too, as long as the receiver is registered with the bank. I don't like handling and processing manual checks or money orders. Any experience with that?
I will wait until Monday to give pre-paid mailing in options
@Steve K.
I believe “reasonable “ is what ever you agreed and allow to happen.
I have two rentals which I personally manage and one of them I pick up the rent at the rental property after calling to coordinate. It is sometimes a little inconvenient but It also gives me a
chance to view the property. They have been with me for seven years and never been late.
The other tenant brings the rent to me, has been with me for two and a half years and never been
Late. Both of these tenants have been very good and take care of the properties very well. I accept cash or money orders and issue a receipt when I receive payment.
These are low income folks who have had problems with checking accounts and banking in general. I believe they do not live on a budget and money is very tight, but I always get paid.
I have several other properties that are managed by a property management co which cost 10% and are direct deposited to my account generally by the 14th of the month. Very convenient and expensive. What I can do for one or two rentals I am unable to do for several. I will probably in the future change to a direct deposit payment, but for now it is working.
Thank you all for your comments.
@Ned J. @Joe Cassandra @Filipe Pereira @Nathan Gesner @Tracy Streich @Michael Noto I've an update.
Today (last day for grace period), we received the rent in next day mail. That was unexpected. What we saw surprised us, that tenant spend outrageous ($50) amount to insure the package and for next day delivery with signature required. (We never gave them that mailing in option until now. Seems like they ignored deposit at bank option). Maybe they panicked about how our PM operation is run, which is very transparent. Or we something else is cooking there? They probably were waiting for my calls to collect rent. They got Zero call from me about rent. (Our PM policy is, rent is PAID not COLLECTED) They also waited till the last minute to send that package, hence the money they spend on USPS.(We're holding our end of the deal)
We don't want anyone to spend that much money, especially the fixed income people. Seem like tenants prefer to get signature receipt they could have simply asked for it.
Now that we are beyond non-payment of rent phase. I want to figure out what should I do from here that doesn't become a burden for us and while we treat these folks fairly, like anyone.
Following Option are being considered by us:-
#1 Include the postage paid/self addressed envelopes (Mail may get lost) and doesn't have tracking.
#2 Offer $5-10 reduction of rent for signature receipt mailing for now, until the lease expire or they join the payment program. Should we even offer this?
We're planning to send them gift card for half the above amount the spend. Or should be send them certified check with $25-30? This is token of appreciation for their tenancy which we inherited. Plus holidays are around the corner.
Any other suggestions on how we approach this now?
(I guess we I have made my message clear to them, until now, on how our operation is run. There still may be some more training required for them)
Sounds like you won, if you ask me. Offer a rent reduction equal to the amount of certified mail or receipt signature required, whatever USPS calls it that gets them a signature back, as cheap as possible.
We are in the business of keeping tenants happy and solving their problems. The problem here is they want a signature, so if you solved that one issue, I would imagine you are all set on this front.
I vote skipping the gift card on this one. Typically I'm all for doing this, but they should not be rewarded for dragging this process out as much as they did. They were wrong and that should be recognized. I do not reward people for doing the status quo.
Wow, they are objecting to mailing the rent - but they go to the post office to get their money order for the rent? You just can't make this stuff up. It would be very generous to pay the $5-6 fee to have their rent check sent via certified mail, return receipt requested, but this is (apparently from what you say about your lease), not your expense. Nor are the self-addressed, stamped envelopes.
The fact that they waited until the day before the rent was officially late makes it sound like they were testing you - looking to see if you came by anyway to collect the rent in person. But you didn't, so now maybe they get it. You have some months before you have to make a decision on these people, they may turn out to be ok tenants but if not, you still have time to find new ones. It's a good position to be in, glad it's working out for you so far.
But if you have any humorous stories to tell about them, please keep posting on this thread, I'll keep tuning in...
Originally posted by @Steve K.:
We recently closed on small multi family property in PA and have inherited tenants. Previous landlord went door to door to collect rents in cash or other tender and issued rent payment receipts.
I personally went to meet each of them along with previous landlord. All tenant but one were very welcoming. Let's call them a "problem tenant". The problem tenants are retired folks and are on social security. This problem tenant went on and on about issues they are facing during their current tenancy and stress it's causing them on day one. Maybe the previous landlord had different management style and was not responsive. (Property is in an urban area and rodents can get it.) Pest control was done last month by professional company and we offered to do it again (already scheduled) and fix other issues in the building. They were also not happy that the property was sold without informing them and it was not disclosed at lease signing 3-4 month ago. No other tenants had that many issues and were very understanding.
Initially, we offered online payment thru Cozy but quickly realized that some tenants would like to pay cash, check or money order. We then extended them an option to deposit rent at a local bank.
We have already received rents from all but that problem tenant (some online and some at bank). Even the tenant that we didn't expect to pay, after they discussed their job loss with me, have already paid. What a surprise.
This problem tenant insists that I must collect rent (2l Money orders) at their door, like previous landlord, and issue a receipt. Any deviation in rent payment methods causes them undue stress.
Previous landlord has her home address listed on the lease where the rent must be paid but she picked it up in person. Our bank is 2 minutes drive from where the previous landlord address listed on lease.
Since they are non responsive to my phone call before, I had to put a notice of pest control service on their door along with additional payment method with our bank information.
We have stood firm that we don't collect rent in person at their doorstep. In my opinion, it's not safe in any environment.
Is this tenant being reasonable? Are we obligated to collect rent in person and issue receipt? Also, in middle of this public health crisis? How should we approach this? Thank you
(We are predicting they will not pay rent and insist that we must collect. I hate to put notice to quit but we may have to)
My 2 cents: Most landlords in urban areas now use an app (cashapp, chime ect) to collect rent or pick it up in person. It takes time to learn every hood scam when investing in the hood. One of them is "I sent the rent in the mail - if you didn't get it i don't know what to tell you!". I never allow rent to go through the mail. Never allow them to leave it under the mat or somewhere else for me to get. A big point you need to realize is you need to take control of your property. These tenants talk, don't think they don't. "I told Steve he had to come get this and do this and thats that!" When they see you are weak and don't have control they will all set the terms for you. Go in, tell them all this is the way it's going to be done going forward - if they don't like it it's time to go. You might lose a tenant but you will save yourselves tons of headaches in the future. When I do an eviction at one of my buildings - Bailiff is out their putting their crap in a dumpster... I go around and knock on doors to make sure as many tenants as possible see it - when they are gathered later and talking sh!t they say Paul don't play.... that's how you want them to speak about you.
@Paul S. I see your point. This is a B+/-neighborhood but those hood habits die hard. I don't think they would pull that trick on us. Mail got lost, etc. I wonder how many times a mail get lost. Can it be lost every month with this tenant? Sure. Who want to see notice to quit or pay posted on their door every month?
How many times has tenant told you during 12 months lease term, the mail might have been lost?
Originally posted by @Steve K.:
@Paul S. I see your point. This is a B+/-neighborhood but those hood habits die hard. I don't think they would pull that trick on us. Mail got lost, etc. I wonder how many times a mail get lost. Can it be lost every month with this tenant? Sure. Who want to see notice to quit or pay posted on their door every month?
How many times has tenant told you during 12 months lease term, the mail might have been lost?
All I can speak on is my experience in my D class areas. They do it. I have rentals in A class areas and I STILL go get the rent by hand if it isn't direct deposit or app based pmt. THIS IS YOUR MONEY!!! Why would you add risk to it getting to your hands?
It's a preference and the process we adapted. We don't want to chase after people to pay their bills on time. We certainly can give them a courtesy reminder if they are late. There is no guarantee that they will pay when we collect in person. They need to open that door to do that.
In person collection may seem tempting but I'm disagreeing on this with you and think it's safety issue when collecting in person. However, I appreciate some points you made in your prior reply.
Another month the tenant spent over $40 to get us the rent, not sure why they can't deposit at the bank or pay online to save money.
cant they do auto pay each month and that way their bank would have receipt