Tenant Unable To Pay Rent
BP Community,
I've been a landlord for almost a year now and so far things have been relatively smooth thanks to all of the forum posts and information here on BP. I've run into a situation that I could definitely use some advice/guidance on.
I have a unit that is rented by two people and their rent has been late (5 business days after the 1st) EVERY month since moving in in March 2022, this has been documented and acknowledged by the tenants. Rent has always been paid before the end of that month. We haven't charged a late fee or interest although we have the ability to via the lease agreement which is Month to Month.
I received a phone call today from tenant A that tenant B had a medical emergency and is currently unconcious in the hospital, tenant B has submitted half of their rent payment for the month and tenant A said theirs would be submitted in full before the end of the week (this will leave me short $575 for this month but will still give me enough to cover the mortgage). Tenant A has already told me that they frankly can't afford the rent by themself. This is obviously a horrible situation for the tenant and it feels wrong for me to move for eviction if rent is not paid before the end of the month, nor do I know if I legally can - being that the tenant is unresponsive in the hosptial. I thought of using the security deposit to cover the rent but part of NJ law is that the security deposit can't be used to cover rent until the tenants are out of the residence. I also made the stupid mistake of not putting the security deposit into an interest bearing account or notifying the tenants where that money was being held..
I've confided in a couple of people regarding this situation and everyone has a different answer but it seems like the best course of action would be to tell tenant A they will have to look for a new roommate and to use part of tenant B's security deposit to cover the remainder of their half of the rent.
Any advice on how to move forward on this situation would be very much appreciated.
#2 General Landlording & Rental Properties Contributor
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#2 General Landlording & Rental Properties Contributor
Never use the security deposit to cover rent. You may need it when they move out. If they are consistently late on rent (more than 5 days), you need to talk to them and tell them they need to pay on time or find another place to live. IF they are late and the lease says they pay a late fee, then charge the late fee.
#4 All Forums Contributor
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- West Valley Phoenix
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#4 All Forums Contributor
- Contractor/Investor/Consultant
- West Valley Phoenix
Unfortunately you are running a business, not a charity. If they don't or can't pay their obligation, you will eventually lose your investment. Are you ok with that?
Follow your lease to be legal and safe, but move to keep yourself safe. If they can find another co-lessee, take the ill person off the lease and replace them.
Life often sucks and it ain't fair. But you gotta take care of yourself and your family, ultimately.
it is going smoothly because you are letting the renters dictate your relationship
Should have added late fees and filed for eviction the first month they where late
Possibly could have avoided the situation you are in now
1. Late fees, all the time (if you want to be generous a one-time waiver, that's it).
2. Yes, you need to evict. Your lease should be structured that you couldn't care less who pays the rent as long as all of it is paid, not going in there trying to parse out who paid and didn't pay.
Quote from @Michael Plante:
it is going smoothly because you are letting the renters dictate your relationship
Should have added late fees and filed for eviction the first month they where latePossibly could have avoided the situation you are in now
100% completely agree, moving forward that is how I will be handling these situations