Many landlords and rental property owners find themselves uncertain of what to do if their tenants pay late. I’ve talked to many owners who describe their experiences with recalcitrant tenants who are consistently delinquent, and the landlord has lost any hope of ever receiving rent on time. If you find yourself frustrated by renters who are late with their rental payments, there are three things to keep in mind:
Be consistent. Whatever policy you put in place regarding late rent payments should to be followed at all times. You shouldn’t waver from your policy, or repeatedly bend it for recurring situations and excuses that arise month after month after month. Adopt a policy and stick to it.
Even though consistency is critical, it’s appropriate to consider your tenant’s payment history. If you have an otherwise-responsible tenant who has lived in your property for two years, and this is the first time he has ever been late with his rent, there is probably not a need to “drop the hammer” on him. Pick up the phone and give him a call. The tenant could have a reasonable explanation, and a plan for payment. (And, if you haven’t already taken done so, make sure your policies allow for this type of latitude for “first-time offenders.”) However, just because a tenant hasn’t previously paid late, you want to be sure that this month’s rent, while late, will be delivered quickly.
Likewise, if you have a tenant who regularly pays rent late, or a tenant who you have seemingly have to harangue to get any rent payment at all, be prepared to promptly serve a “3 Day Notice to Pay Rent or Quit.” Don’t delay. It’s important not to wait, worried that your tenant might take offense. When your tenant is consistently late paying rent, it’s not about emotions or hurt feelings, it’s about risk management. You need to protect your investment, and in order to do that, you need to serve a 3 day notice so that the clock starts ticking, and your tenant knows that you are taking this matter very seriously. If you need to serve a 3-Day, and you are unfamiliar with the process, call your attorney. It is imperative that you be absolutely accurate in both the creation and delivery of this document.
Apply and collect late charges. Always charge late fees if your tenant pays rent late. The amount of the late charge, and the number of days permitted before assessment, should be spelled out in your lease or rental agreement. At DeDe’s Rentals, we would be pleased never to collect late fees: instead, we genuinely prefer that our tenants pay rent on time. However, if your tenant realizes that you will demand the applicable late fee, he will also recognize you are serious in expecting timely rental payments. Your tenant may not know or care, but you have obligations too. Frequently, those obligations can only be met when rent is paid on time. Applying late fees is an effective tool to motivate tenants not to delay rent payments.
If you have any questions on this blog, or need further advice on collecting rent from tenants, please do not hesitate to give us a call. We’d be happy to talk to you at DeDe’s Rentals, and we can be reached at (707) 523-4500.
