Landlording & Rental Properties

6 Common Mistakes Landlords Make During Rent Collection & Evictions

Expertise: Business Management, Landlording & Rental Properties, Real Estate News & Commentary, Real Estate Marketing, Personal Development, Real Estate Investing Basics
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There’s not a landlord who’s been in business for long who hasn’t had a tenant fail to pay on time — or at all. When it happens, the speed and consistency of the landlord’s response will statistically dictate their success. State laws vary, but there are really only two types of actions a landlord can pursue: chasing the tenant for payment or eviction. Errors and mistakes abound, so let’s talk about some of them.

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6 Common Mistakes Landlords Make During Rent Collection & Evictions

1. Irregular Enforcement of Rules

One of the great powers that we have as landlords is deciding when to let something slide and when to really come down hard on a tenant. The response to a failure to pay, as well as the enforcement of late fees and such, should be consistently applied. Letting things slide rarely turns out well and can be dangerous. Give a tenant an inch, and many will take a mile. It also creates a bad precedent that may be used as a successful defense in court, particularly if you do it more than once for the same tenant.

2. Waiting to Start Eviction

It’s easy, especially if you like a particular tenant, to get strung along with a series of partial payments and/or excuses for no payments at all — and there are definitely (very rare) tenants who deserve that kind of treatment. But what you don’t want is to gamble with the odds or get strung along by a tenant you aren’t fond of or don’t think is being honest with you.

The easiest way to do that is to stick to your guns in all cases: deliver notice the day the rent is due, and proceed in all ways as though you’re going to go through with the eviction. You can always stop an eviction, but if you wait too long to start one, you’ll end up in a less advantageous position for no real reason.

3. Accepting Partial Payments

You have to know your state laws very well when it comes to partial payments. Taking a partial rent payment may force a landlord to have to start the eviction process all over again! Payment plans may cause the same issue. Check with a really experienced eviction attorney, and know your options.

4. Performing “Constructive” Evictions

Some landlords attempt to force nonpaying tenants out by doing things like turning off the utilities (called a “constructive eviction”). This is straight up illegal in every state in the Union.

Related: 4 Common Maintenance & Repair Mistakes Property Managers Make

Even if your tenant doesn’t pay, you are never allowed to make a home unlivable when there are people living in it. The penalties for doing this can be pretty steep, so go to court — that’s what the eviction process exists for.

5. Trying to Shortcut the Law

A father and daughter investor team was just shot and killed in Detroit trying to handle their own eviction on a property they bought at tax foreclosure. They were there when the occupants were moving out, and the situation escalated when they tried to stop the occupants from removing fixtures from the property.

Related: 6 Common Application & Screening Mistakes Property Managers Make

They may have successfully done this numerous times in the past, but it only takes one bad situation. Use the eviction process and bailiffs so you don’t put yourself at risk.

6. Not Maintaining the Upper Hand

When a tenant fails to pay on time they in effect gain the upper hand on the landlord. To restore balance in the relationship, the landlord must pursue eviction. The longer you wait to do so, the further behind the rent falls and the greater the upper hand the tenant achieves.

Eviction notices should be mailed out immediately, no tenant excuses thwarting this act! Evictions have a timeline that must be followed, and the sooner a landlord starts that clock, the better their chance of regaining the upper hand in the relationship. This mindset should be carried forward through every step of the eviction process.

We’re not quite done yet! Come back soon for the last in our “Mistakes” series, when we’ll address the art and science of a property manager’s most boring, and too often overlooked, job: monitoring costs and balancing budgets.

What mistakes have you made (or have you seen being made) when it comes to rent collection & evictions?

Leave your comments below!

While in the mortgage business, Drew rose to a VP position at the first broker he worked for and then started his own company. In the pursuit of excellence, he obtained several mortgage designations and joined mortgage & several affiliate association Boards. He also did WebX presentations and public speaking. It was during this time he started personally investing in single-family rentals, leading him to also start Royal Rose Property Management with two partners. He also joined the Board of a local real estate investors association, eventually becoming its President. The real estate crash led to an offer from the banking industry to manage a Michigan bank’s failed bank assets they acquired from the FDIC. The bank acquired four failed banks from the FDIC, increasing from $100M in assets to over $2B while he was there. After that, he took over as President of Royal Rose Property Management. Today, he speaks at national property management conventions and does WebX presentations.

    Ronnie Sparrow Investor from Spring, Texas
    Replied almost 5 years ago
    Awesome post. Everything you mentioned is exactly what I was taught and it is what I do. I respect all my tenants and provide a safe and desirable place to live for them. In turn I expect the rent to paid on time.
    Ronnie Sparrow Investor from Spring, Texas
    Replied almost 5 years ago
    Awesome post. Everything you mentioned is exactly what I was taught and it is what I do. I respect all my tenants and provide a safe and desirable place to live for them. In turn I expect the rent to paid on time.
    Drew Sygit from Birmingham, Michigan
    Replied almost 5 years ago
    RONNIE: keep it up and don’t slide on your processes!
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied almost 5 years ago
    Know your state laws! Such a great piece of advice. The laws can vary greatly from state to state. Know them before you have to use them. And screen screen screen so you don’t have to use them!
    Drew Sygit from Birmingham, Michigan
    Replied almost 5 years ago
    MINDY: ditto:)
    Alex Craig
    Replied almost 5 years ago
    I highly recommend taking any payment if you own property in the state of Tennessee. Just make sure you write on the back of the money order, check or receipt “Payment accepted with reservations.”
    Drew Sygit from Birmingham, Michigan
    Replied almost 5 years ago
    ALEX: haven’t heard of that, hope you’ve run by an attorney:)
    Account Closed from Tinley Park, Illinois
    Replied almost 5 years ago
    Understanding how partial payments can affect the eviction process is key. However – I honestly believe the structure and firm stand on rental payment plans (when done fairly and seen though) can result in better, more loyal residents that tend to take responsibility for their payments.
    Drew Sygit from Birmingham, Michigan
    Replied almost 5 years ago
    SAMANTHA: anyone can fall victim to an unexpected financial issue, it’s all in how the tenant communicates. Those that proactively communicate we try our best to be understanding and flexible – once we have a court judgment. Those that avoid communication until we take them to court – we don’t cut them much slack as they haven’t earned it.
    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied almost 5 years ago
    I had very good tenants that asked for (and received) permission to pay rent 2x/month rather than on the first. Do I wish they had made more money and would be able to pay on the first more easily? Of course. So did they. He was a hard worker, and ended up getting a better job, but it was in a different town, so they moved. My place is in a depressed rural area, so I have to decide what matters to me most (reliable rent was more important than getting it on the 1st. Well-behaved tenants with legal sources of income are more important than getting absolute top dollar). Hard working young tenants are likely to move on in a year or two, but that’s better than lazy, sloppy tenants whom I wish would leave. This time around I chose (3) 19 year old guys rather than an employed couple in their 50s and a daughter in her 40s Turns out the older couple were financially stable only 3 of the past 10 years, and they neglected to mention a few old felonies. (Fun twist is that the house structure had been owned by the grandfather of one of the guys, and had been placed on it’s current lot by the father of another one). BTW, the guys have been great so far. Rent on time, and the one small project I’ve had them do has been done well and at a reasonable rate.
    Zaman
    Replied almost 5 years ago
    Regarding utilities — what happens if in the lease the tenant is responsible for the utilities and if the landlord ask to stop it in Maryland.
    Drew Sygit from Birmingham, Michigan
    Replied almost 5 years ago
    ZAMA: we’re not familiar with Maryland laws, but can’t really follow your question. Please elaborate to make clear what you are asking…
    Eric D. Investor from Eagan, Minnesota
    Replied almost 5 years ago
    A partial payment in MN is OK, but once you start the eviction do not take any more money. Also, if you overlook late payments for a long time, and then you decide to evict for a late payment, it’s too late. You have to give a new notice that late payments are not allowed.
    Drew Sygit from Birmingham, Michigan
    Replied over 3 years ago
    @ERIC D: Your comment is a good reminder for landlords to know their own state laws and to NOT be too nice and let tenants get away with things.
    Luka Milicevic Rental Property Investor from Nashville, TN
    Replied about 4 years ago
    I would like to mention a couple of things: Firstly, be thankful for the eviction laws that are in place in the U.S! My parents live in South Africa and have one rental unit that has only ever had one tenant live there. They have, however heard many horror stories from their friends when it comes to eviction. The only real remedy you have there is “constructive eviction”. The only thing you can’t do is turn off the water. You can even go so far as to remove the front door. I am very thankful for the speedy process in the U.S.
    Drew Sygit from Birmingham, Michigan
    Replied over 3 years ago
    LUKA MILICEVIC: wow! thanks for sharing. I’ve also heard in France it’s extremely difficult to get rid of squatters.
    Michele Galloway Investor from Windsor Mill, Maryland
    Replied over 3 years ago
    I have been very lenient with my tenant in the past because she is a single foster mother who takes in children with disabilities so I have been trying to help. I believe, after a period of time, I am being taken advantage of. So now, I’m planning to start the eviction process. Since one of the mistakes that landlords make is what I’ve done, can you explain how this will impact my eviction process. I have allowed the tenant to be chronically late.
    Drew Sygit from Birmingham, Michigan
    Replied over 3 years ago
    @MICHELE GALLOWAY: We can only comment on Michigan laws, where your previous leniency wouldn’t affect the eviction process. As always, check with a good eviction attorney or have them handle the eviction for you.