BiggerPockets

Hi Eveybody,

I have 2 tenants that are late with their rent the third time already.

What whould be the first step that I should take? They ignored the late fee notice that I gave them last month.

This month they are already 5 days late, I didn't send the late pymt. notice yet.

Thanks a lot,
J.

Julia, it depends on where you are. For instance, in Dayton, Ohio we have a joint office for citizen complaints. If I was a renter and I had an issue with my landlord the general rule is I would complain to them. If there is something in my house that my landlord wouldn't fix I would pay my rent to this office and they would handle the landlord and legally wouldn't pay the landlord until the matter is solved.

Since I had knowledge of this this is the first place I started when I got my first tenant. They gave me a list of how to properly handle situations where my tenant wouldn't pay.

Here we have legal routes we must take... Personally, If they are late 5 days they get a notice and a fee. 15 days and I automatically send a notice to vacate regardless of whether or not they have an arrangement or agreement with me they know to expect it. (This way if they don't come through with their part of the agreement or arrangement we made I can start the eviction process) You may want to contact a lawyer to make sure that you are doing things correctly.

Just an FYI, don't worry about peoples feelings or that they might be offended, this is part of business and you have to protect yourself because obviously the people that are not paying the rent don't have your best interest at heart. When I first got started I didn't want to do these things because I was worried about this, it took me almost losing my house to wise up.

Thank you for your answers!
J.

You need to send a certified letter, detailing the lease agreement late fee clause. Keep a copy for yourself, of course, give a date that the fee needs to be paid by and list any consequence that may be deemed appropriate.

What I do is I grace one or two late fees if the tenant is forthcoming with their circumstance. For instance one of my tenants was in the hospital and missed two weeks worth of work. Of course I would rather have a tenant than an empty so I let her pay over a few months. Since she is a good tenant and usually has not been late in the past I made an exception. Be careful with this though, you want to be fair in all your business. If you do it for one try to make sure you are reasonable and can do it for anyone else (like in 2-4 unit). You don't want any hint of favoritism ( that is an ugly horse to put down)

It's really up to you, is this a good tenant or someone who has been with you a while. Do they keep you informed? Do you have a payment on the property? Do you have money put away for these payments in case of vacancy? All of these questions factor in when dealing with tenants.

The day you get a tenant, better yet, the day before you get a tenant you have to decide what your standards are gonna be. What you can allow and what you can not. Some properties may be different than others, some you may be able to let slide a little and some you may not. Some tenants may be different than others in the same way as well.

My lease states any money I get goes to late fees before it goes to rent. So, if they paid the rent, they would really have paid the late fee and part of the rent, and the rent would still be late.

That said, I don't accept partial payments. If its late, they pay the rent plus the late fee or they pay nothing, and I proceed with the eviction process.

Julia:

You wrote: >>I was trying to avoid conflict, going to court etc but I know that on the long run is not healthy anyway....<<

Unfortuntely, you picked the wrong business if you are trying to avoid conflict.

The problem I find is that a LL really only has two options with a problem tenant: Ask 'em nicely, or NUKE 'EM (with an eviction).

If your tenant is not 'judgement-proof' and if you have an excellent lease, chances are good that you will be awarded your late fees, your court costs and lost rent once you evict them. But it will be a colossal PITA and time-waster for you. And then you have to go and COLLECT.

Around here when one files a small claims action one can pay extra to have a Sheriff's Deputy deliver the papers. I once had the Deputy deliver the papers to the moron's work place. HA HA HA HA - that got his attention!

A second option is to wait and debit the late fees from your tenant's deposit, should there be any left. Of course, the tenant may sue you over that. Of course, if you stay in this business long enough you will get sued regardless of whether you are right or wrong.

Unfortunately, there seems no way to get around conflict in this business.

Good luck and keep us posted.

Hi,

I finally got the rent + late fee after I gave them the eviction notice.

Unfortunately another tenant complaines about them that they have always parties and are very noisy and that he can't sleep or study because of them.

I don't know what should I do besides talkind to them. I already did and it doesn't seem to work. They also have their girlfriends over all the time and have 4 cars instead of 2 in the driveway, not leaving enough room for the other tenants.

Please help with any suggestions!

Thanks,
J.

Julia,

McNark took the words right out of my mouth - if you want to avoid conflict, SELL YOUR RENTALS TODAY! The rental business is all about conflict.

Here's the truth, without the sugar coating. You have made (are making) a bunch of newbie mistakes. These are serious mistakes and they are the same mistakes that cause many new landlords to fail. First, giving a relatively low income tenant a year long lease is RIDICULOUS. Look at the situation you are in. The tenants aren't obeying your lease and you will have a VERY DIFFICULT time evicting them for anything other than non-payment of rent. If you had a month to month lease, you could simply give them the appropriate notice and get rid of them. You have gotten absolutely nothing from the year long lease and they have gotten everything. BIG MISTAKE!

My other favorite technique with tenants that are having trouble following the lease (extra cars, wild parties, etc), is to just raise the rent every month. You can do that with a month to month lease, you can't do that with a year long lease.

Your next big mistake is not starting the eviction process the day the rent became late. You are now showing all your tenants that you are a weak landlord and they do not respect you. This is a business - nothing more or less. If you are going to survive, you MUST COLLECT THE RENT! It is imperative that you rapidly evict the scum as soon as they don't pay, not only for the money but to show your other tenants that you are serious, that you immediately evict the deadbeats! There's not a better education for your tenants than to see you pile a deadbeat's belongings on the curb when they are set out!

My suggestion is to do a little soul searching and determine whether you are really suited to this business. The tenants are NOT your friend - they're more like the pigs in a farm field. You can make money as a pig farmer, but you're going to get dirty and it's going to STINK! The same thing goes for the rental business and the tenants. It's a dirty business and the tenants definitely STINK! In either business, you've got to learn to love to wallow in the mud!

Hi,

Right now I'm trying to do exactly what you're saying I should do.

Yes, I was too nice/weak with them.

They are a couple of students, decent families but doesn't matter too much if they behave this way. The kids (23 old) should be responsible too for their actions.

They got scared when they received the eviction notice for not paying their rent and payed immediately.

Now I'm getting ready to send them eviction notice for noise/disturbing their neighbors.

Will see how it goes, maybe I will sell it. Keep you posted,

Thanks,
Julia

Students? I hope you got the parents to co-sign. If you did, start sending copies of all the notices to the parents. If the parents are on the hook for damages, they will come down on those kids like a ton of bricks.