When it comes to tenant issues, one of the most common nightmares a landlord has to deal with is what to do when a tenant doesn’t pay rent on time – or at all.
Whether you are facing this issue for the first time or have a lengthy history of tenants paying late or not at all, the result is the same: It costs you money and time.
When it comes to rental payments, there are many different things that can go wrong that can lead to a lot of headaches and revenue loss. Here is what to do if a tenant is not paying their rent and doesn’t want to pay rent.
What to Do (And What Not To) When a Tenant’s Rent Is Late
This part will likely depend on the state you’re in, as the different chapters within statutes will differ by state. This means that while one state may say you need to provide a 3-day notice, another may have a 5-day notice until you are able to terminate the rental agreement.
To find your state-specific one, search state residential tenancies to view local tenant laws
What to Do When a Tenant’s Rent is Late
1. Double-check your lease documentation and payment records to be sure the renter is genuinely late before taking any action. Depending on the lease your renter signed, there may be a grace period before you may issue a late notice.
However, if you’ve double-checked and the renter is actually late, it’s also crucial to know if you may charge a late fee, which you may have specified in the contract.
2. If your tenant is truly late with their rent payment, you have the option to contact them first via text or phone call. This mainly serves the purpose of connecting with your tenant and finding out more information; however, this may depend on whether this is the first time it happened with this tenant or if there’s a history.
It’s possible that the death of a loved one, job loss, an accident with a longer hospital stay, or just forgetting about it might be to blame if this is the first time this has occurred. Ultimately, it depends on you what an acceptable reason is for a late payment.
Depending on the reason for the late payment, this phone call or text message may be a quick fix for the late payment, saving you the headache of drafting up a notice and any late fees.
Another advantage: the landlord-tenant relationship will also be improved as a result of this.
What if this happens more often or becomes a pattern? Then make sure to be consistent and take action with step 3.
3. A notice of late rent may be sent if the grace period has expired or if you have sent numerous reminders and the renter has not paid. Send it through mail, email, or tape it to the door with a stamp in case you want proof of potential subsequent evictions.
Here’s what to include in your late rent notice:
- The rent owed
- Any late fees
- A warning about legal action if the rent, including any fees, isn’t paid in full
Keep a copy of any notes you send out for potential evictions.
What Not to Do When a Tenant’s Rent Is Late
1. You don’t want to get into the habit of reminding the tenant every month or every time the payment is late. It’s one thing if it occurs once or twice during the tenant’s stay there, but it’s quite another if it’s become a recurring problem.
2. Calling the tenant once about a late payment notice is acceptable, but calling multiple times could be seen as harassment – at which the tenant would gain the upper hand as it’s illegal.
3. Despite the tenant’s failure to pay rent, one thing you cannot do as a landlord is turn off the utilities. If you do, you may find yourself in a legal battle for rendering the property uninhabitable by removing essentials like running water, sewage, and working heating (in the winter).
Other things you can’t do while waiting for payment are refusing to make repairs or removing access to amenities such as the gym or the pool.
Here’s a list of other things that are against the law as a landlord, despite missing rent payments:
Changing the lock to the building or apartment
Accessing the property/unit without the tenant’s permission
Raising rent
Trying to evict the tenant without proper notice
Threatening or assaulting the tenant to pay rent
Refusing to accept late payments to be able to evict the tenant
Filing false claims for violating the rental agreement in an attempt to evict the tenant
There are specific steps to handle a tenant eviction without facing any legal consequences. Make sure to follow every step and consider talking to a lawyer specializing in landlords & tenants.
How Do I Handle a Tenant’s Bounced Checks?
A tenant not paying rent is one thing, but handling bounced checks is another. When a tenant bounces a check, it can be a very stressful situation, but there are several reasons why a check may bounce. Consider these first before taking the next action.
- Closure of the account: How long have you had the check? If you’ve held onto it for a while, the tenant may have closed this account and opened another one without being aware that it bounced.
- The check was not written properly: This is a common reason why checks won’t go through. It can be as simple as having mismatched information on the amount box and amount line but also having spelling mistakes in the recipient’s name.
- Age of check: How long have you had it? If you’ve had the check for over six months without cashing it in, then the bank may not honor it anymore.
- The check may be fraudulent: This can happen if your tenant used someone else’s account, which could be their partner’s or even parents’ account.
If the check bounced due to any of these reasons, especially at the beginning of the rental agreement, the tenant is able to quickly resend the new check, it’s at your own discretion to still issue a bounced check fee.
Can a Landlord Sue for Unpaid Rent?
What if it wasn’t a mistake and the bounced check was on purpose? Or maybe the tenant is now refusing to pay rent?
The question of whether or not it is worthwhile to sue a tenant for unpaid rent is a typical one for landlords. As many defendants settle out of court, a lawsuit may be advantageous in certain cases. Though if the tenant owes several months’ worth and won’t pay for damage, this might be helpful.
Thus, you might file a lawsuit against the tenant for not just the unpaid rent, but also any additional fees, such as the remainder of the term or the costs associated with finding a new tenant.
Lastly, having your case on record provides proof if the tenant ever tries to sue you for any reason. However, if you lose the case, you may have to pay money to the tenant, depending on the circumstances.
In the worst-case scenario, you may even have to chase down your tenant for payment despite the ruling of the court.
What Can Be Done if Tenant Doesn’t Pay Rent
What happens when the tenant doesn’t pay the rent? What are the legal options that you have? What can you do to recover the rent? These are just some of the questions that any landlord who is facing this problem will have.
While we’ve looked at the above possibilities for resolving this problem without resorting to the legal system (for the most part), you also have the option of evicting your renter and forgoing the situation of even trying to receive a rent payment while they’re living there.
How Much Notice Does a Landlord Have to Give a Tenant to Move Out?
Rereading your contract on how many days notice you are required to provide to your tenant after you’ve made the decision to evict them is a critical step in the process. If it doesn’t mention the number of days notice required, refer to the state tenant legislature’s minimum number of days.
How Long Does It Take To Get Evicted for Not Paying Rent?
Depending on the state, evicting a renter might take between three days and three weeks. The procedure is the same no matter which state you live in — you need a court order.
While you’re the landlord, you aren’t able to just evict a tenant due to late payment or missing payments, you must go through the court, otherwise, you may find yourself being sued by the tenant.
Before going to the courts, follow this process:
1. Having a lease violation, such as nonpayment of rent, is setting the whole process in motion. This part includes having proof of late rent notices and contact with the tenant.
2. Honor your notice periods since they are an important part of the process. This includes not just the late rent notice, but also the notification to terminate the rental agreement and a due date. Research the legislative requirements in your state, though most states require you to send your notification by mail or in person.
Tip: While not required, using certified mail ensures that your renter received notice.
3. If your renter pays their rent by the due date, they may not be required to vacate the premises unless there are other lease breaches. However, if the tenant does not correct their violation, then the period to leave the premises ranges from 3 to 30 days.
4. If your tenant doesn’t pay their rent by the due date, you will be required to file an eviction action through the court. This entails filing a lawsuit and arranging a hearing. In certain states, tenants must present a written defense before an eviction hearing, making it take 3-30 days before it can even be scheduled.
5. The court has the ultimate say on whether your tenant has to vacate your premises, which will also depend on their written defense (if required) and their reasons not to pay rent. Again, depending on the state, there may even be two hearings instead of just one where the court can make its final decision.
Ultimately, the process of evicting a tenant might take weeks to months before the tenant leaves your rental. Even if the court decides in your favor, your renter may have anywhere from 12 hours to 60 days to remove all of their possessions, depending on the state.
Does Landlord Insurance Cover Unpaid Rent in Situations of Eviction?
With the dread of a potential eviction process, you may question whether your insurance would pay the overdue rent while waiting. Unfortunately, this is not the case with most policies.
Eviction insurance may be your sole protection against pricey eviction procedures. Though, your premium will depend on your leasing rates, which could be expensive over time. However, this may be your last opportunity to avoid losing $6,000-$10,000 in an eviction.
An alternative is rent loss insurance which will protect against the loss of revenue. However, to qualify for “fair rental value” coverage, a property must be rendered uninhabitable by an occurrence that necessitates a tenant’s departure, which would exclude evictions.
Another Common Question Among Landlords Is: How Can I Get My Tenant Out Fast?
If your tenant has been proven to be unreliable and is often late, you may be wondering what steps you could take to get your tenant out fast without evicting them due to missing violations.
Here are some ideas:
Raise rent: Depending on your state’s legislation, you may have to wait until the end of the lease or give the renter a few months’ notice before raising the rent.
Don’t renew the lease: You have the option to wait until the lease runs out and simply not renew it. Many landlords forget this option and that they have a choice.
Buy your tenant out: If you truly cannot wait and want to get your tenant out as fast as possible, you may offer to buy them out of the rest of their lease. Even though your renter owes you money, they may gladly accept this offer, often referred to as “Cash for Keys.” This saves you the trouble and expense of an eviction.
Explain to your tenant that you want to make renovations to your property: Forcing them to vacate during that time and hopefully never returning and just terminating the lease.
Give them the option to move before filing an eviction notice: Does your tenant have a habit of being late on their rent payments? Give them the option to move out.
Write up a letter and have all parties sign it with a due date for the move-out, regardless of the reason your renter agreed to move out.
Final Thoughts About What To Do If Your Tenant Doesn’t Pay Rent
What to do if a tenant doesn’t pay rent on time or at all is a common concern for landlords. It doesn’t matter whether this is your first time dealing with this or if you’ve had a long history of renters not paying on time or not at all.
There are various steps you can take if your tenant doesn’t pay rent on time or doesn’t want to pay at all, one being a costly eviction. However, this may often be the last option if a client has a history of paying late or not at all.
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