No matter how good your tenant selection process may be, it's bound to happen. As a landlord, you will have a tenant who stops paying the rent. While showing up at the property, angrily demanding money, and refusing to maintain the property might make you feel better or teach your tenant a "lesson," none of that is a good idea. Follow these seven steps when your tenant stops paying their rent to find the quickest and most legal resolution.

1. Talk to Your Tenant
If this is a new behavior for your tenant, especially if they've never been late or had an excellent background check, talk to them. You may find that they're having temporary financial hardships  or that someone in the family is ill. From that conversation, you can decide how you want to handle the issue.

  • You could accept partial payments.
  • You could allow them to break the lease with no penalty - so you can get a paying tenant into the property instead.
  • You could give them a time-frame to pay or leave.

When you communicate with your tenant, you may be able to come to a decision that works for everyone. If this is a habitual problem for your tenant or talking didn't resolve the issue, start with the next step first.

2. Speak with an Attorney
Every state will have different landlord tenant laws with different requirements. Written notices, timing, rights, and responsibilities for landlords vary from area to area. If you are not familiar with the laws in your area, work with an attorney who can guide you through the process.

3. Get Everything in Writing
Most state laws require that you give written notice to your tenants. Communicate everything in writing and request written response from your tenants. The information could become evidence if you have to take your tenant to court at some point.

4. Follow the Lease to the Letter
No matter how justified you feel, and no matter how upset you are, make sure to follow the lease agreement. Tenants have rights, even if they haven't paid the rent, and you don't want to end up on the wrong side in a court case.

5. Take a Look at the Property
Unfortunately, lack of payment could mean that the property is been neglected or damaged in some way. This could be due to financial hardships for the tenant, abandonment of the property, or, most unfortunately, because the tenant caused destruction of property in retaliation at some point. Take pictures of any damage or neglect you find.

6. Resolve the Issue
If you're working with an attorney, heed their advice for a resolution - eviction or some other outcome with the tenants. If you're not working with an attorney, and you decide to evict, start the process as soon as possible. If the first step was productive, you may not have to go this route, which saves you time and money. However, the process is there to help you, especially for a tenant who will not pay or leave the property.

7. Check Your Screening Process
Once the dust has settled enough to think clearly, check your review process. If you don't have one, get one, and use it for every potential tenant. For those with a tenant screening process in place, take a look at the forms. Do you run a credit check? Do you run a criminal background check? In this specific case, did you overlook something? There's no way to guarantee a tenant will always pay, but a good screening process can help prevent the problem of tenants who skip out on the rent.
Having a tenant who doesn't pay their rent is stressful - the mortgage still has to get paid, your income goes down, and you have to worry about potential damage or neglect to your property. The sooner you can start the process of dealing with the tenant and finding a resolution, the better off you and your property will be - and the sooner you can find a paying tenant.

 

POSTED January 05 2015 12:08 PM
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