Dealing with Late Rent Payments
By Sadiya Anjum
Sometimes tenants have valid reasons like an unexpected unemployment situation or death etc. that may prevent them from making payments on time. Any decent landlord will allow room for such occurrences but you need to make sure that this does not become a pattern. Being too lenient can only result in creating a late payment habit for the tenant and even lead to skipping payments. The best way to handle this is to have a policy when it comes to rent payment and to actually enforce it.
To avoid tenants who pay rent late, your first step comes into play when you are screening prospective tenants. Make sure that your tenants have the ability to pay and follow up on their references. A credit report will also be helpful in determining your prospective tenant’s track record.
Next it is vital that you protect your rights in the rental agreement. Make sure that details regarding rent payment are clear and simple. It should be composed in such a manner that the tenant understands the consequences of a late or a skipped payment. Details you should include are – when payment is due, what actions will be taken if there is a late payment, any penalty and how much, method of payment, any grace period for holidays or other valid reasons, action against bounced checks, circumstances which will lead to an eviction notice etc. Keep these details clear and make sure the tenant understands your policy on rent collection.
To have it clearly stated on your rental agreement will protect you but if you do not enforce it, it becomes pointless. A judge may not rule in your favor later if you yourself have not been strict in enforcing your policy. When the rent does not show up on the due date, then take action immediately.
Make a phone call or send a written notice or any other procedure indicated in your rental agreement. If it is a habitually late payer, then perhaps you should remind your tenant in advance. You must remember that most tenants depend entirely on their monthly salary, if the rent does not show up even after the grace period you must find out the actual reason. If the tenant does not offer valid reasons, find out about their employment status – is there a problem there? Update your tenant’s profile with his help to determine the cause of late payment.
Enforce your penalty payment clause if required unless there is an absolutely valid reason. Make sure that you do not fall for any white lies and stay firm. Allowing one tenant to pay late without any penalty may cause him to repeat this behavior. It may also lead to problems with other tenants who may imitate this behavior.
Another effective way to prevent and even remedy a case of late payment is to let your tenants know that you hold the right to inform credit bureaus about any late payment. This is usually a very effective way to ensure payments on time.
If worse comes to worst, then you may have to consider serving a Notice to Pay Rent or Quit. If you are resorting to eviction, then make sure that you have valid reasons as well as proof to take this action. Eviction is a long, tedious and expensive procedure; so take action as early as possible to avoid this situation. If your tenant seems to avoid your calls or any written notices, then maybe there is a reason why he is avoiding you. Note unusual and unacceptable behavior early on and remedy the situation without delay.
The best way to handle late payments is to make sure that you share a good rapport with your tenants. An informal approach is generally quite effective if you have the knack to achieve the desired results. But stand your ground and draw the line before tenants start taking advantage of your leniency. Having a clear policy that tenants are aware of and enforcing it will prevent and remedy the case of late payments.
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