WWYD - Late payments after 5 years of on time payments

Real Estate Investor · Dallas, TX · Member since 2013 · 388 posts · 174 votes

Tenants have been in property for 5 years. Have always paid on time, no issues, always willing to help with maintenance of property.
This month, the rent late day passed, I called and tenant said they ran into some issues and needed 1 week.
7 days later, they are asking for another week. I asked what happened and they are giving a generic, ran into life issues, answer. I drove by and it doesn't look they are moving out. I would hate to evict them since they have been solid for so long, but business is business.
I plan to put the 'pay or vacate notice' with 7 days (the week they asked for).

I'm curious to hear what you all would do? Any ideas or strategies that have been good to use?

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Greg ScottPro Member

Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes

Quote from @Luke H.:

but business is business.

What prevented you from sending the pay or quit notice on time? You could always have stopped eviction if they paid in full. What sort of maintenance are they doing? Either your lease requires them to do maintenance such as mowing the lawn and changing air filters, or it does not. Does your pharmacy give you a free meds for fixing their toilets? Realistically, do your residents feel like they are dealing with a friend or dealing with a business?

The best course of action is to make a decision. Are you are running a business or are you not?

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Greg ScottPro Member
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
3y
Quote from @Luke H.:
but business is business.

What prevented you from sending the pay or quit notice on time? You could always have stopped eviction if they paid in full. What sort of maintenance are they doing? Either your lease requires them to do maintenance such as mowing the lawn and changing air filters, or it does not. Does your pharmacy give you a free meds for fixing their toilets? Realistically, do your residents feel like they are dealing with a friend or dealing with a business?

The best course of action is to make a decision. Are you are running a business or are you not?
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Luke H.
OP
Real Estate Investor · Dallas, TX · Member since 2013 · 388 posts · 174 votes
3y
Quote from @Greg Scott:

Quote from @Luke H.:
but business is business.

What prevented you from sending the pay or quit notice on time? You could always have stopped eviction if they paid in full. What sort of maintenance are they doing? Either your lease requires them to do maintenance such as mowing the lawn and changing air filters, or it does not. Does your pharmacy give you a free meds for fixing their toilets? Realistically, do your residents feel like they are dealing with a friend or dealing with a business?

The best course of action is to make a decision. Are you are running a business or are you not?
Posting the notice tomorrow, thanks.
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George Red
Investor · Member since 2022 · 157 posts · 162 votes
3y
Hey Luke, good question and super valid... especially if they have been a good tenant for years. They may have hit a small bump and will be good tenants for another 5, I would not rush to throw them out. More tenured investors may go black and white but I would let it breathe... I'm relatively new to investing and am going through it the first time myself. I gave the tenant a window of time and rent has not been paid and now I'm moving to evict but the tenant had been in the property for years (pre-dated me buying the property) so I was not in a rush to evict. I imagine over time if encountering similar issues over and over you may pull the trigger quicker. I hope it goes well for you.
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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
3y
I wouldn’t rush to throw them out, but I would post the pay or quit, you can even tell them ahead of time it won’t have any effect on them if they pay when they’ve promised (for the 2nd or third time) to pay. My only big negative is the lack of honesty/communication. BUT, that could be embarrassment. Would you want to tell your landlord you got a DWI, or lost your job, your spouse did.
Good luck and let us know. If they are MTM i’d make sure they are paying within 5-10% of market rent.
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Kevin Sobilo
Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
3y
@Luke H., I will give some flexibility to a good tenant like this when an issue arises, but if its more than a small amount of flexibility I will require them to explain the situation and how/when it will be resolved AND also to provide documentation. No generic statements. A clear description of the issue and planned solution and documentation of it.
If I don't get those things, I would issue the pay or quit notice.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y

Best practice: don't wait five years to develop a plan.

You should have a late fee policy and a termination/eviction policy. Hit them with the late fee on the first day the law and lease allows, regardless of past payment history. Start termination/eviction on the first day the law and lease allows, regardless of past payment history. You can start the eviction process and then stop it once tenant catches up on rent. But if they don't catch up on rent and drag this out, you'll already have the wheels in motion.
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
I usually don't say this, but ask them what is going on and work through it, 5 years is a long time. If they can not come up with rent for any reason in the near future start the eviction process.
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