Writing a Late Rent Payment Agreement
A late rent payment agreement is an addendum that can be added to a leasing contract. This agreement sets a specific date that rent is due, but also allows for a certain “grace period” for the rent to be paid. It can also be included as a rider to a current lease if a tenant is struggling to pay their rent. It can be effectively used in place of an eviction to help a good tenant get current once again. Landlords aren't the only one who can suggest or draft a late rent payment agreement. If a tenant knows they are going to be late on their rent, outside of any grace period that they may have, then they can offer it as a method of showing their landlord that they are serious about getting their rent paid as soon as possible. Here's how you can draft a good late rent payment agreement that will work for both parties.
1. Make Sure You Include the Address of the Premises in Question.
After listing the names of the parties who will be signing this agreement and listing them as landlord or tenant, you will want to make sure that the address listed is the rental property in question. It is one of the most overlooked components of this agreement and it can invalidate it if an eviction does need to take place.
2. Mention That the Tenant is Late in Paying Their Rent.
By putting this simple statement into print, both parties are acknowledging that the tenant is actually in violation of their leasing contract. This will give a landlord more power during an eviction hearing if that becomes necessary.
3. List the Specific Amount of Rent That is Past Due.
This can be any amount that is past due, but it cannot include other charges, such as utility payments that a tenant might pay to a landlord. Those may be included in a separate agreement. If the entire amount of rent is past due, list that amount. If a tenant has a rent of $600 and they've paid 50% of it, then state that they have $300 past due to the landlord.
4. Document the Promise to Pay in Full.
There must be a specific date listed where the tenant promises to pay the full amount of the past due. You may request a good faith payment at the time of the late rent payment agreement as a deposit on the amount that is owed. If you've created a payment arrangement with the landlord or tenant, list the full details of this arrangement as well.
5. Specifically Mention That the Tenant Will Still Owe Current and Future Obligations.
Being past due on rent doesn't absolve a tenant from still paying their current rent. If you've sent a date to pay past due May rent by July 1, then be sure to mention that June and July rent will be required to be paid on time and in full.
6. You Can Create an Agreement That Allows the Tenant to Move Out.
Tenants need to take past due rent seriously, so include a stipulation that says a tenant must move out of the property by the date the total amount of past due rent must be paid if they cannot come up with the money.
7. Do Not Put in Provisions That Allow a Landlord to Change Locks or Shut-Off Utilities.
This is considered an illegal act in many jurisdictions. Tenants still have the right to a livable property, even if they are past due on their rent. Having an illegal stipulation could invalidate this agreement and force the eviction process, if needed, to start over.
8. Agree to Not Pursue a Formal Eviction as Long as the Payment Terms Are Kept.
You will want to reserve all of your legal rights, but do make sure that you put in the agreement that the landlord will not pursue an eviction as long as all of the payment terms of this agreement are met. This will give the tenant security for their residence and the landlord security that they will have set the foundation for legal proceedings if they become necessary.
9. Make Sure Everyone Who is on the Lease Signs the Agreement and is Included as a Party of Interest on it.
Every member of a rental contract must be listed on the late rent payment agreement for it to be valid. This means all those who have reached the age of majority if the rental property is their primary home. A late rent payment agreement can often bring a tenant back into payment compliance. It's a lot cheaper than a formal eviction and can help the revenues keep flowing. Use these steps when you have the need to create your agreement.
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