Tenant paying late, but not later than 5 days

Charlotte, North Carolina
General Landlording & Rental Properties
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Tenant paying late, but not later than 5 days

J. Wang
Member since 2022 · 20 posts · 5 votes

Hi fellow landlords,

Today I had a situation with one of my tenants in NC. This tenant has been paying rent always on the 5th, although the lease agreement says the rent should be paid on the 1st of every month. She pays on the 5th because on the 6th there will be a late fee. I would not have a problem with it, if she would have explained to me any difficulties she has in advance. But no, it looks like to me that she pays late on purpose and with no good reason. What disturbs me is her attitude. She was yelling at me over the phone and insisted that paying on the 5th is not considered paying late. She literally told me that I will get my rent on the 5th, that's it.  What is even more disturbing and ridiculous is when she needed AC maintenance, I had it fixed on the same freaking day as she submitted the request. But madam was angry at me for not having done it faster. That's why yesterday, I sent her a PAY OR QUIT NOTICE after she was late again. Since she has such a high expectation on the maintenance, I would also demand on-time payments.  Has anybody had similar issues with their tenants? Can I evict her if she continues doing this? I mean is 4/5 days late a good enough reason to evict her? Thank you in advance for any feedbacks! 

P.S. she has eviction history and a bad credit score. But I still took her because she appeared so nice during application, and was so desperate looking for a place to rent, and promised that the eviction was due to her pregnancy which was six years ago and she had paid off everything. Now I regret being too emotional and naïve. 

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
4y

Maybe the landlord business isn't for you. Nearly every tenant in America pays on the 5th if there's a late fee on the 6th. Lol

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  • J. Wang
    OP
    Member since 2022 · 20 posts · 5 votes
    4y
    Quote from @Matthew Irish-Jones:

    @Jiebing Wang sounds like you made a mountain out of an ant hill and it may cost you.

    OK, you guys make me feel better now. Knowing that it is common :-D Next time I will ask advice in the group first before I take actions. 

    0Reply
  • J. Wang
    OP
    Member since 2022 · 20 posts · 5 votes
    4y
    Quote from @Nathan Gesner:

    You're getting too emotional and taking this too personally.

    She is technically wrong; rent is due on the first. However, she can legally pay late and you have no recourse, so why get worked up over it? If she pays on the 5th, accept it. If she pays on the 6th, charge the late fee. If she pays on the 12th or whatever, start your eviction process. It's a business, not training your child on how to be a good citizen.

    A good business will be responsive to maintenance requests. Don't start playing games with her to punish her for what you consider bad behavior. Be a good business owner and maybe you'll teach her to be a good tenant.

    On the other hand, I would not tolerate a Tenant berating me. That would generate a simple letter requesting she speak to me respectfully. When she's close to lease termination, make it very clear you won't renew her lease because of the late payments and other behavior and move on.


     Thank you so much Nathan, I appreciate your advice! Totally agree, I need to be more grown-up in dealing with people like that. 

    0Reply
  • J. Wang
    OP
    Member since 2022 · 20 posts · 5 votes
    4y
    Quote from @Patricia Steiner:

    In my business - as well as my clients' - rent is due on the 1st.  The 1st.  There is no acceptable grace period.  None.  This is made clear before the lease is signed, in the lease, and in a "Welcome Letter" - all that require it and payment via electronic delivery only.  When you allow a tenant to pay late, a precedent has been set.  If you moved to evict her, she would have a valid claim that she ALWAYS paid her rent before the 5th but not on the 1st and you accepted it every time until now.  The problem in the eyes of the court, and many others, is that you as the Landlord changed the covenant as evidenced by your behavior.  My recommendation is to not prize late fees and late payments are indicative of an inability or unwillingness to pay as agreed.  If she doesn't pay on the 1st, post a Notice To Quit on the 2nd.  Be specific in it that the lease states payment is due on the 1st and that she has violated the agreement repeatedly and it will not be tolerated further.  Manage to the lease.  The American Apartment Association's research that the majority of landlords who fail do so because they failed to enforce their own leases.  Pretty telling...


     Thank you Patricia, the problem is NC has a 5 day grace period. But I will definitely send a notice on the 6th day and charge a late fee. 

    1Reply
  • David M.
    Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
    4y

    @J. Wang

    Just to add another example...  I've had tenants who pay late, but consistently pay..  I have one for close to a dozen years I just expected their payment to come around the 8th...  They are nice people, "elderly," which explains the slight delay in payment.  Actually, one spouse just passed away a few months ago.  I keep getting paid and they don't give me any trouble.  I'm getting paid so what does it matter...  Sometimes, not always, a little bit of understanding goes a long way...  Good luck.

    0Reply
  • J. Wang
    OP
    Member since 2022 · 20 posts · 5 votes
    4y
    Quote from @David M.:

    @J. Wang

    Just to add another example...  I've had tenants who pay late, but consistently pay..  I have one for close to a dozen years I just expected their payment to come around the 8th...  They are nice people, "elderly," which explains the slight delay in payment.  Actually, one spouse just passed away a few months ago.  I keep getting paid and they don't give me any trouble.  I'm getting paid so what does it matter...  Sometimes, not always, a little bit of understanding goes a long way...  Good luck.

    Wow, you are really patient. 
    0Reply
  • Pam Brown
    Real Estate Agent · Indianapolis IN · Member since 2022 · 144 posts · 65 votes
    4y

    I would have no problem getting the rent on the 5th. Nor would I consider that "late". That's pretty good in the scheme of things in the tenant world :-)

    1Reply
  • David M.
    Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
    4y
    Quote from @J. Wang:
    Quote from @David M.:

    @J. Wang

    Just to add another example...  I've had tenants who pay late, but consistently pay..  I have one for close to a dozen years I just expected their payment to come around the 8th...  They are nice people, "elderly," which explains the slight delay in payment.  Actually, one spouse just passed away a few months ago.  I keep getting paid and they don't give me any trouble.  I'm getting paid so what does it matter...  Sometimes, not always, a little bit of understanding goes a long way...  Good luck.

    Wow, you are really patient. 

     @J. Wang I guess its a different point of view...  No need to be so "strict."  Yes, I've had tenant who took advantage and I needed to be strict.  As mentioned above, I've had many times where I've told the tenants that this arrangement doesn't seem to be working out, would you like to leave?  They "brighten up" and leave...  But, in this case, if I'm getting paid, what is there to complain about???  The example I gave above we recently agreed to make rent due the 15th (remember her spouse died, its been some rough economic times) -- she pays me about the 12th.  After some 12-15 years I think, why would I complain?  hope that helps.

    0Reply
  • Account Closed
    Property Manager · Las Vegas, NV · Member since 2017 · 108 posts · 149 votes
    4y

    @J. Wang  Change your lease to have rent post and be due on the 25th of the month prior. Charge late fees as of the 2nd of the month. You will receive rent on the 1st. This is how my lease is written....I comply with all local late fee laws and still get rent on the 1st (Las Vegas has a 3 day law and I technically give 6 days). I've been doing this for 10+ years. Simple fix to outsmart the chronic late payers. An added bonus is receiving rent earlier than the 1st: I would say 50% of my tenants pay on the 25th and another 40% pay prior to the end of the month. About 10% actually pay on the 1st. Simply brilliant. @Russell Brazil Can you tell I love my chosen field? I seriously used to play property management/office as a kid. Other girls played family or school and I played office. lol

    1Reply
  • Sergey A. Petrov
    Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
    4y

    Your tenant isn’t paying late. Your tenant is paying within the grace period you yourself gave them in the lease. You need to recall the notice you sent, apologize to the tenant for sending it, and tell them your future conversations need to be professional (nobody yells at anybody - this is not a kindergarten). Your obligation to maintain the property is still there and is not a retaliation tool.

    If neither of you is willing to repair your relationship you need to find a decent, reasonable, and legal way to part ways. That on its own will require a professional conversation without screaming and yelling. If you want to be successful in this business you need to learn to be the better professional person 

    1Reply
  • Craig Janet
    Member since 2019 · 223 posts · 261 votes
    4y

    I have 15 rentals. I only have one that pays on the first. Everyone else pays on the 5th. If they know they can wait until the 5th to pay, that's what they will do. A lot of folks get paid on the 1st, so it's good business to give them a couple days. Especially if the 1st falls on a weekend or holiday. 

    2Reply
  • Gary L Wallman
    Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    4y
    Quote from @J. Wang:

    Hi fellow landlords,

    Today I had a situation with one of my tenants in NC. This tenant has been paying rent always on the 5th, although the lease agreement says the rent should be paid on the 1st of every month. She pays on the 5th because on the 6th there will be a late fee. I would not have a problem with it, if she would have explained to me any difficulties she has in advance. But no, it looks like to me that she pays late on purpose and with no good reason. What disturbs me is her attitude. She was yelling at me over the phone and insisted that paying on the 5th is not considered paying late. She literally told me that I will get my rent on the 5th, that's it.  What is even more disturbing and ridiculous is when she needed AC maintenance, I had it fixed on the same freaking day as she submitted the request. But madam was angry at me for not having done it faster. That's why yesterday, I sent her a PAY OR QUIT NOTICE after she was late again. Since she has such a high expectation on the maintenance, I would also demand on-time payments.  Has anybody had similar issues with their tenants? Can I evict her if she continues doing this? I mean is 4/5 days late a good enough reason to evict her? Thank you in advance for any feedbacks! 

    P.S. she has eviction history and a bad credit score. But I still took her because she appeared so nice during application, and was so desperate looking for a place to rent, and promised that the eviction was due to her pregnancy which was six years ago and she had paid off everything. Now I regret being too emotional and naïve. 


     I changed my lease for just this reason. So many of my tenants thought the deferral of a fee gave them permission to pay late. That is incorrect.  My new lease contains a late fee clause that is 10% percent of the late rent and $5 additional for each day late after the first of the month. Amazing how much more timely rent collections are now. Plus, if someone is late, the extra rent takes the sting out.

    Gary

    0Reply
  • J. Wang
    OP
    Member since 2022 · 20 posts · 5 votes
    4y

    unfortunately, NC law has a grace period and a maximum penalty limit, which is 5% of owed amount or $15, whichever is greater.

    0Reply
  • Mary Jay
    Glendale, AZ · Member since 2017 · 1k+ posts · 238 votes
    4y

    I would be ok with a tenant paying 5 days late

    1Reply
  • J. Wang
    OP
    Member since 2022 · 20 posts · 5 votes
    4y
    Quote from @Account Closed:

    @J. Wang  Change your lease to have rent post and be due on the 25th of the month prior. Charge late fees as of the 2nd of the month. You will receive rent on the 1st. This is how my lease is written....I comply with all local late fee laws and still get rent on the 1st (Las Vegas has a 3 day law and I technically give 6 days). I've been doing this for 10+ years. Simple fix to outsmart the chronic late payers. An added bonus is receiving rent earlier than the 1st: I would say 50% of my tenants pay on the 25th and another 40% pay prior to the end of the month. About 10% actually pay on the 1st. Simply brilliant. @Russell Brazil Can you tell I love my chosen field? I seriously used to play property management/office as a kid. Other girls played family or school and I played office. lol


     That's brilliant!! Will check with my lawyer and see if it is allowed in NC.

    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    4y

    @J. Wang  Ok so we have this same law in RI, no late fee until the 5th, most tenants still pay on the 1st.  For one tenant I had to put in the lease any payment not received before Close of business on the 5th is received on the next business day. I also informed him that he could continue pay as he did but when his next potential landlord contacted me I would report the facts, that payments were due on the first and what dates they were received so just because I could not charge a late fee that didn't mean he wasn't late.  He was better after that but he was a PIA on everything too.  I never did hear from another landlord when we decided to part ways.

    On maintenance I would just set your standards and stop talking to her. Less emotional discussion the better.

    0Reply
  • Luka Milicevic
    Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
    4y

    A few thoughts: 

    Check your state law regarding pay or quits before rent is considered late by state law. Your lease can say the 1st, but the state might not recognize it until the 6th.

    Tenants will be tenants. They will pay late, give you headaches, that's part of it.

    I did the same thing a few years ago regarding placing a tenant that had an eviction. She was so nice, said the eviction was placed on her by her mother in law during her divorce as a way to get back at her. She seemed so sincere so I rented to her. Enter: Professional tenant. Despite everything I read about real estate and landlording, sometimes it takes $ to learn a lesson. 

    0Reply
  • J. Wang
    OP
    Member since 2022 · 20 posts · 5 votes
    4y
    Quote from @Colleen F.:

    @J. Wang  Ok so we have this same law in RI, no late fee until the 5th, most tenants still pay on the 1st.  For one tenant I had to put in the lease any payment not received before Close of business on the 5th is received on the next business day. I also informed him that he could continue pay as he did but when his next potential landlord contacted me I would report the facts, that payments were due on the first and what dates they were received so just because I could not charge a late fee that didn't mean he wasn't late.  He was better after that but he was a PIA on everything too.  I never did hear from another landlord when we decided to part ways.

    On maintenance I would just set your standards and stop talking to her. Less emotional discussion the better.

    Thank you so much Colleen for your advice. Yes, that's exactly what I thought "just because I could not charge a late fee that didn't mean he wasn't late". 
    0Reply
  • J. Wang
    OP
    Member since 2022 · 20 posts · 5 votes
    4y
    Quote from @Luka Milicevic:

    A few thoughts: 

    Check your state law regarding pay or quits before rent is considered late by state law. Your lease can say the 1st, but the state might not recognize it until the 6th.

    Tenants will be tenants. They will pay late, give you headaches, that's part of it.

    I did the same thing a few years ago regarding placing a tenant that had an eviction. She was so nice, said the eviction was placed on her by her mother in law during her divorce as a way to get back at her. She seemed so sincere so I rented to her. Enter: Professional tenant. Despite everything I read about real estate and landlording, sometimes it takes $ to learn a lesson. 

    True. I find it's hard to make the right decision though. Once I got scammed, someone applied had perfect credit score, no criminal record or eviction history, and good income. I even met her in person. Three weeks into the tenancy I found out that the person who actually moved in was someone whom no landlord would rent to. Luckily, I suffered no loss in that case. Ironically, it's the same property. 
    1Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    @J. Wang I'm curious...do you really need the money on the first that bad? Or is more of a control issue....?

    0Reply
  • J. Wang
    OP
    Member since 2022 · 20 posts · 5 votes
    4y
    Quote from @Bruce Woodruff:

    @J. Wang I'm curious...do you really need the money on the first that bad? Or is more of a control issue....?

     More of a control issue. I think my real issue is the tenant's attitude. But I wrote the post when I was angry. Now I just thought, whatever, if the relationship doesn't get better I just won't extend the lease. 

    1Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @J. Wang:
    Quote from @Bruce Woodruff:

    @J. Wang I'm curious...do you really need the money on the first that bad? Or is more of a control issue....?


     More of a control issue. 


    Figured that. I could ask why, but don't really care. Just revise your lease so your tenants are forced to pay on whatever date makes you happy. Easy. Done.

    0Reply
  • Dave Van HornPro Member
    Fund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes
    4y

    @Jiebing Wang it appears the tenant is within their grace period so technically they’re not late so not sure why you’re overreacting, you can always change your due date, grace period and late fees with proper notice as soon as the current lease is up. One thing I do know about managing properties for over 30 years is that a move out and turnover costs a lot more than a tenant paying within their grace period, if this is the biggest tenant issue you have you should count your blessings especially with the light pre screen job you did in the beginning.

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  • Mark Nickoson
    Rental Property Investor · Dayton, OH · Member since 2015 · 79 posts · 85 votes
    4y

    @Jiebing Wang

    I have a few tenants.  One pays electronically before the first, the other pays electronically usually on the 5th.  Now, I don't get perturbed about payments up to the 5th because my mortgage payment doesn't come out until the 8th.  But, if it upsets you, you could reward the behavior that you want.  If your rent is $1,000/mo then knock $10 off if they setup electronic payment and pay by the 1st.  If it is not by the 1st, then the cost is $1,000.  Most banks subscribe to a service that offers ACH payments.  I like to have payments deposited into an upfront account, then I transfer to another account with the same bank for a little measure of safety.  The service the tenant uses sends a text message to my phone saying tenant has paid.  It usually shows up in my account the next day. 

    One of the other things that I do when I have done my screening and we sign the lease is that I give them a short one-page document that explains why I charge $50 for a late fee and goes through a short calculation showing the price of the price of the house and an interest rate.  I describe that they are borrowing a $130,000 asset.  When the regular rent is not in place, the normal payment is not covered, I'm losing $31/week (@5% interest), not to mention that if I have a rent payment coming out of a bank account, I have to scramble to make sure I have it covered.  If I'm not paid by that next week then there is a bigger problem.  I've had a tenant that had two months in a row where he made the late payment.  He has a good job, but they had a large car repair bill and the next month another situation came up.  The next month he was back on track.  Each time he was late, he sent advance notice to me and said that he would send the $50.  It sets the expectation.  I've been leasing properties for 12 years and it seems to work for me.

    2Reply
  • Matt Bishop
    Rental Property Investor · Dallas, TX · Member since 2020 · 161 posts · 88 votes
    4y

    @Jiebing Wang, what's a few days matter? You're getting your rent, let it go and be grateful. You sound like you are resentful she doesn't have an acceptable excuse for paying late but you would be ok with the situation if you felt sorry for her. The only thing that matters is your income. You have better ways to exercise your emotions and feelings. And better ways to spend your time.

    Have you ever considered using a management company to handle your rental so that you don't have to be burdened with minutia?

    1Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Matt Bishop:


    Have you ever considered using a management company to handle your rental so that you don't have to be burdened with minutia?


    I suspect she enjoys it....

    1Reply
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