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How to Use The Pay Rent or Quit Notice when the Rent is Late

by Jason Hanson on August 14, 2011 · 8 comments

  
pay rent or quit notice

I recently got an email from a newer investor I was helping out. He’d already done several deals and was very successful despite being in the real estate business for such a short period of time. However, he now had a tenant in one of his rental properties who was not paying rent, and since he’d never been in this situation he didn’t know the best way to handle it.

Well, the best way to handle a delinquent tenant is to always try and contact the tenant and try to get your rent. If you’re able to get a hold of the tenant and they can’t pay rent then you need to talk them into leaving the house ASAP. Over the years I’ve had a few tenants in this position and my proposal has always been “If you leave the house within two weeks in broom clean condition then I won’t come after you for the past rent you owe.”

Thankfully, this has always worked for me and I’ve never had to do an eviction in my life. However, oftentimes when I tenant stops paying rent they “put their head in the sand” and they’re not going to take your phone calls or answer your emails. If this happens you need to begin the eviction process and in most states the first step is to mail the tenants a Pay Rent or Quit Notice.

The Pay Rent or Quit Notice

This notice says that the tenant owes X amount of dollars in rent and they have a certain amount of time to pay this money or they’re going to get evicted. In Virginia where I live, it’s a 5-day Pay Rent or Quit Notice, but each state is different and some states are as low as three days.

What I like to do with this is mail one to the tenant but I also have someone go over to the house and tape one on the front door for me. In the few instances where I have had to use this I always get the tenant calling me within a day. There’s something about this piece of paper that scares them straight!

And like I mentioned earlier, I’ve never had to do an eviction in my life. Plus, if your tenant does call after they get the notice and that’s the first time you’ve talked to them, here’s your chance to try and get them out of the house voluntarily without having to do through the eviction process.

But what happens if the tenant doesn’t contact you after you’ve mailed and taped the notice to their front door?

Then you need to immediately continue with the eviction process. Head down to your local courthouse and find out what forms you need to fill out to get the process moving along.

The worst thing you can do (that far too many investors are guilty of) is not take immediate action to get them out of your house. Do not hold out hope that they’re eventually going to call you and magically come up with the rent. If they’ve ignored your phone calls, emails and your Pay Rent or Quit Notice, then you’re never going to hear from them and you need to put the legal system to work.

Image: Jeroen van Oostrom / FreeDigitalPhotos.net

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{ 7 comments… read them below or add one }

Nathan Gesner August 14, 2011 at 5:29 pm

I agree. When I hand them this letter, they pay or get out. I would say about 98% pay, the other 2% disappear into the night. Either way, my problem is gone and I’ve never had a tenant stay in the unit and try to fight me without paying rent.

Here’s another important consideration: don’t let the rent get too far behind before serving this notice!!! I give them the Pay or Quit Notice by the 15th of each month. That way, if they move out within the three days, I’m less than 20 days into the month and can clean it and find a new tenant by the next month. The security deposit will cover the rent lost, and usually covers the cleaning/repairs as well. If you wait until later in the month, you may leak into the next month and increase the loss of rent income.

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John Fletcher August 18, 2011 at 5:48 pm

This letter is a great idea and I’m sure it works for a lot of cases. Where I live, in Canada, it becomes extremely hard to evict a tenant during the cold winter months. The law seems to protect the tenant more than the landlord.
A friend of mine went through trying to evict his tenant who was renting his basement apartment last winter and had stopped paying rent. Turns out it took him 4 months and a lot of hardships to finally get rid of this person.
What would you recommend doing in a case like this that might speed up the process.

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Steve August 14, 2011 at 9:52 pm

Thank you for the good advice

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Jason Homes August 26, 2011 at 7:48 am

Yes I agree with your point. When all else fails the last thing to do is to let the legal system to work.

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Paul October 26, 2011 at 3:23 pm

Take the front door off for ‘repair’, in winter that should get them to move quickly!

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Joshua Dorkin October 26, 2011 at 6:41 pm

Paul – I hope you realize that those kinds of things are not the way to go and you’re just kidding….

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Patrick July 12, 2014 at 1:12 pm

If someone comes up to you and takes $2,500.00 cash from you and that person is later caught they are tried , convicted and sentenced to jail. If a tenant refuses to pay for rent for several months they are rarely held accountable . Often they just move on to the next victim ( sucker ) and get a few months of free accommodations again . Stealing is stealing . Whether it’s a mugger in the street or a lazy , lying , low-life , manipulative individual who knows how to cheat the system . If it were your $2,500.00 that you have worked very hard for you would also want to imprison the thief .

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