Posted in Blog  
  on Dec 02, 2014

How to Handle Tenants That Are Not Paying Rent on Time

Some tenants pay their rent consistently and only miss 1 or 2 payments over the course of 5 years. When that happens, you can generally just send them a friendly reminder and you'll get the rent that you need right away. Other tenants, however, are consistently late on their rent and collecting cash from them can become problematic. Knowing how to handle tenants that are not paying rent on time means sometimes you must become the villain, but always remember this: the tenant is at fault and you are due money. Here's how you can eliminate a lot of the stress from the situation.

1. Have Clear, Concise Procedures to Follow

98% of tenants will either pay their rent on time or pay it late with the associated late fees. They aren't the problem. It's the 2% of tenants that either can't pay or won't pay the rent that cause stress. If you have eviction procedures in place to follow, confronting delinquent tenants becomes a little easier because you're following a plan of action. If you get your rent, then great. If not, then you'll be ready to start the eviction process.

2. You Must be Proactive 100% of the Time

If you have multiple rental properties that are being managed and you allow one person to pay their rent late consistently, then late payments will begin to spread like a disease throughout all of your tenants. What's worse is that you make it even more difficult to start the eviction process on any of them because you've set a standard that late rent is fine. Have a deadline for rental payments and if that deadline isn't met, start eviction procedures. Don't make exceptions to this rule.

3. Always Charge the Maximum

Tenants needs an incentive to pay their rent on time, because otherwise they'll just pay the late fee and not worry about the fact that you don't trust them at all. Whatever your local laws allow for a late fee, charge it. The legal maximum will encourage those stragglers to keep up with on-time payments because there is more value in paying on time than in paying late.

4. You Must Remain Professional at all Times

Many property managers and landlords will start making threats about turning off utilities or changing the locks, but this is almost always illegal to do and not a valid threat. What's worse is that any threat can provide evidence to a tenant during the eviction that you're not living up to legal expectations and the tenant could potentially win a cash judgment against you. Personal attacks will also create a bad reputation for you that makes it harder to find future tenants. Stay professional, no matter how difficult the situation may be, and you'll get your money eventually.

5. Tenants Must Take You Seriously

If you have a grace period, deliver the late rent notices or the notice to pay or quit immediately and do it in a provable way so that a tenant knows that you're serious about collecting what they owe you. Any time you need to deliver this paperwork, you may wish to have a lawyer on hand just in case. By taking these steps, you can manage even the more difficult situations that you can face pretty effectively and without high stress levels. Implement clear plans today and when you face the 2%, you'll be ready.


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