Jeremy Tallman By Jeremy Tallman • June 14, 2017

What Happens if My Tenant Doesn't Pay Rent?

 

 

Most late rent payments can be avoided altogether with proper tenant screening. Any applicants you consider for your rental property should be thoroughly screened. Confirm with current and former landlords that rent was paid on time every month. You also want to look at an applicant’s credit report to ensure bills are paid regularly and always check income, so you’ll know if a tenant earns enough money to pay rent.

Things happen and even well-screened tenants can have problems with illness or major unexpected bills and rent might be late. You want to make sure you have things set up to ensure you can collect late rent effectively. 

It starts with the lease. Make sure you have a defined date that rent is due spelled out in your lease. 

You should also include information on when rent is considered late. For example, perhaps rent is due on the first of the month, but then there is a grace period and on the sixth of the month it is officially considered late.

Include penalties so tenants know exactly what kind of late fees they will need to pay when rent isn’t on time. Have an initial penalty, maybe $25, and then increase the penalty every day that rent continues to be late. I think it’s a mistake just to charge the one-time penalty because then tenants have no motivation to get you the late rent any quicker. Make sure you have these procedures in writing.

If the sixth of the month comes and there is still no rent payment, make a phone call to the tenant or send a letter.

When you talk to the tenant, it is critical that you get a promise to pay date. Document when they will pay and how much they will pay, including late fees. If they don’t pay or you can’t reach them, send a Pay or Quit Notice. Most courts require these before you file for eviction. These are generally posted on the door and they require rent to be paid within a certain number of days.

Through these efforts, a tenant will pay most of the time. If they don’t pay, eviction is inevitable. Should you find yourself at that stage, I recommend hiring an attorney. Real estate attorneys are not overly expensive and they know the right paperwork to file.

It can be a huge asset to have an attorney taking care of this for you, because you don’t want to do something incorrectly and have a further delay in getting a nonpaying tenant out of your property.

If you have any questions about how to effectively collect late rent, please contact us at T&H Realty Services.