Saturday, October 1

What to Do When a Tenant Misses Rent Payments

More than 14% of renters in America are still behind on rent payments. As a landlord, it’s stressful when your tenant fails to pay rent. While you may be tempted to start the eviction process, it’s illegal to kick your tenant out or turn off utilities.

Whether you have a tenant with a long history of missing rent payments or one who has a past-due payment for the first time, it’s best to be professional when handling the situation. Below are things you can do when your tenant misses rent payments.

Check Your Payment Records and Lease Documents

Double-check your records to ensure the tenant is truly missed rent payments. As a landlord, you can keep better records if you have online rental applications and you collect rent online. You can easily catch and fix errors concerning rent payments.

Also, check lease documents to check the agreement you had with the tenant on rental pricing. The lease may contain a clause giving the tenants a grace period or fees to be paid if they’re late on rent. If you find the tenant has indeed missed payments, you’re bound to enact the provisions agreed upon in the lease.

Send a Late Rent Notice

You can serve a late rent notice after the grace period ends as stipulated in the lease agreement. This is a formal, written notice informing the tenant that the rent is past-due. A proper notice to pay rent should include the date when rent was due and the money they owe. If you have a late fee charge in your lease agreement, you should also include it in the notice.

You should also warn the tenant about further legal action if they don’t pay the rent in full very soon. The late rent notice can help you in case the issue goes to court, and you have to prove that there was a pattern of delinquent payments.

Make a Phone Call

As a responsible landlord, you should call your tenant a few days after you served the late rent notice and confirm that they’ve received the information. It’ll also help you find out when they intend to pay or reasons why you haven’t gotten the rent money yet.

They may be withholding rent due to maintenance issues. If that’s the case, you may need to work with them to resolve the issue. However, you should only make a call once to avoid accusations of harassment.

Work Out a Solution with Your Tenant

Assuming your tenant missed rent payment because they’ve lost their job or faced another financial hardship. You are within your rights to go forward with the eviction according to the violation of the lease.

Suppose your tenant has always paid rent on time and looked after the rental unit. Serving them an eviction notice won’t help. You can work out a flexible rent payment schedule. This may include allowing them to make partial payments or to delay payments for a specific period.

While compromising with a good tenant can be cost-effective, it may refute any previous action you’ve taken, such as sending a late rent notice. This is why you should consult with an attorney and put the agreement down in writing so both parties can sign it.

Send a Pay or Quit Notice

Before you start the eviction process for missed rent payments, you have to serve a “Pay or Quit” notice. It’s a formal termination notice that shows the tenant your intent to evict them. It should state the amount you’re owed and the deadline to pay in full. Remind them if a certain number of days passes without them making payments, they have to vacate your unit.

Many states have specific requirements about how, where, and when you have to serve the pay and quit notice. This is why you should check with your state and local laws before you proceed. In case the issue goes to court, you’ll have to prove that you made a good faith effort to ensure the tenant received the notice.

Eviction Notice

If all else fails and the tenant doesn’t pay rent within the specified time, you can file a tenant eviction lawsuit. It’s good to start the process as soon as the pay or quit waiting period ends. You will have to provide documented evidence of the late rent payment and show proof that you have served the necessary notices before eviction.

You can hire an eviction attorney to help you with the legal process. During the eviction proceedings, it’s illegal to take action against the delinquent tenant. You should avoid entering the property, issuing threats, or conducting an eviction—this is an illegal eviction. Your tenant can use this chance to sue you for harassment or unlawful eviction.

How to Avoid Bad Tenants

Rental properties are a good investment, but delinquent tenants can make managing them frustrating. Here’s a guide to help you steer clear of bad tenants when letting.

Conduct a Comprehensive Tenant Screening Process

Setting up an early meeting with your prospective tenant is a great way to figure out any red flags. From face-to-face meetings to phone calls and emails, use these tenant screening techniques to assess their courteousness, promptness, and commitment.

Get References

Asking for references for the previous two or three landlords and contact them to learn more about them. Ensure the contacts they give are actually from their previous landlords. Some rental applicants give names of their friends or invent addresses.

Run a Credit Check

You’re within your rights as a landlord to do a tenant credit check. Ensure that their debts aren’t too high. Typically, the debts shouldn’t be more than 1/3 of their income if you want a financially stable long-term renter.

Have a Written Lease Agreement

You can clip out bad tenants by having a written lease agreement rather than a verbal agreement. It should state the requirements of both parties and protect you. Besides, it can also help you if you end up in court.

Keep Track of Rent Payments

As an accountable landlord, you need to have a clear record of all your tenants’ rent payments. Since dealing with paper tenant applications can be difficult and time-consuming, you need to consider collecting rent online.

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