We have eight rentals and I manage another four for family. All of our rent is due on the first late on the 5th. So for our rental empire, the sixth is the day of recogning. Did all of our tenants pay their rent on time.
Depending on the answer …..The 6th can be the best or worst day of the on the month.
If it’s the 6th and your rent has been paid, tehn its a great day. On the other hand, if you check your bank account and your tenant has not paid, then it’s stressful as you figure out the next steps.
I can tell you two things you don’t do!
One: Do not “freak out”!
Two: Send your tenants a nasty gram!
The reality is things happen. I have VERY rarely received late rent payment from my tenants. Honestly, after over 30 different tenants, I can COUNT the number of late payments on one hand. Every time I have received late payment, something major has occurred, death, hospitalization, car accident, job loss, etc. So while I never excuse people for not following their lease, the reality is life happens. I try really hard to landlord with grace. Therefore UNLESS my tenants have a history of paying late. I always go from the sense that this was a mistake! Mistakes happen all the time. That’s why I send this message to my tenants.
I hope this finds you well. I just wanted to let you know that I have not received rent yet and it’s now late. I wanted to follow up with you first as you have never been late before. I know technology has its days and I wanted to make sure something hadn’t happened.
This way they get message that the rent is late but in a kind gentler way. I know personally, nothing heckles me more than when someone threatens me when I have NEVER shown any reason not to pay. For example, our boat slip landlord recently got pissed that we didn’t pay them the utility bill. They sent it mid-month no warning (it’s sent very randomly) than they expect check payment within days of receipt. When it wasn’t received within ONE Day of being sent, they accuse of us not haviving the money. This really made me MAD, because we prepay our rent 6 months in advance and we had 4 MONTHS of prepayment of our rent left. Obviously, this is a little different but the point, is people who pay their bill get upset when people accuse them of not paying! That is the last thing you want to do.
Next, You receive your tenants response.
“Oh I am so sorry, x, y, z “excuse”.”
This is the step that is the KEY to handling this situation with GRACE. I PERSONALLY give everyone ONE pass (and only one). Things happen and I know I have paid my bills late before. Bank didn’t transfer my payment, I forgot to pay something because a military homecoming, etc, etc, etc.
So my response is always to my tenants.
I am so sorry or I totally understand (depending on the story) As long as you get the rent to use within 24 hours, 48 hours (depending on the reason and the correct response), I will waive the late fee. If the rent is NOT receive by this time I will have to implement the late fee and start court measure. I am sure you understand, but please note this is an ONE time deal, for all further late fees no matter the reason, we will NOT be able to waive the late fee.
When Setting a Time Allowance for Rent to be Paid– I ALWAYS set a date but make it reasonable on whatever they said the issue was for it being late. For example, I once had a tenant say it was because he was in an area with his grandmother and couldn’t get to my bank till two days from now. So obvously setting a date for 24 hours is not going to assist in both solving the issue and providing grace. In this case I set it for 48 hours and sure enough the rent was paid, and not paid late again in their 15 month lease.
If it was due to Direct Deposit, Mail, Pigion express, etc not arriving on time- If it was due to not having direct deposit this is where I HEAVILY encourage them to use COZY direct deposit or another method mention in my article 4 Ways to Direct Deposit.
Do not Set a Precense for Not Caring about due date- By being gracious and understanding while still firm on future times. This allows tenants to know that this is the one and only time this will be allowed. If it happens again, I charge them the late fee.
Now if this is NOT my tenants first time being late all bets off.
That is when they get a much politer but firmer letter. As always I am no lawyer and what you can do for your late fee is ALWAYS based on your lease and state laws. My lease and state allows me to take fees first rent second.
I just wanted to give you a heads up that I haven’t received your rent. Due to your rent being late, late fees are no applied. Per your lease you owe $X amount (mine is 10% of rent) in addition to rent. Unfortunately since your courtesy waive has been used, we will be unable to further waive any late fees. As you have other been a great tenant, we give you till Month 10th by 5pm to get the rent to us. If it is not receive by than we will have to pursue the legal steps to an eviction.
Thank you for your understanding. We look forward to working with you.
In my experience both letters have gotten me paid within the time period as everyone sees that I am serious and NO one wants to mess with eviction. The key is making them see in both the stern AND the nice but stern letter.
What to do if that DOESN’T work and they STILL owe rent?
Now if that doesn’t work the next step is to start legal proceedings. EVERY state is VERY different on how their next steps. So you need to figure out how to do it correct in YOUR state. The last thing you want is for your non-paying tenant to win on a technically. Trust me tenants seem to suddenly get VERY smart when they are trying to beat the system.
The first thing I would do is research your local state laws. Even if you have a good idea You can find states website in this article than search “eviction”.
Next- Speak to Your Local Court House (in location to YOUR rental property)
I would call your local court house to get their advice and see if they have specific forms.
Once I know what forms I need. I don’t reinvent the wheel. I call the court house and get their forms. If they do not have specific forms. Than I go to Ezlandlordforms or another place and download the specific forms needed. This way I get exactly what the state requires with their specific language.