How to deal with consistent late payment renter?

How to deal with consistent late payment renter?

Member since 2024 · 7 posts · 4 votes

Hi,

I am an out-of-state investor and have a rental property in Jacksonville Florida that is managed by JWB, a local property management company. The renters have lived in the property for 2 years now, and we have a long-term rental agreement with them, the lease ends in January 2026. For more than a year now, the renters have never paid on time. The rent is due on the 1st of the month. Each month, they would pay a little at the beginning of the month, like a couple of hundred dollars, a little in the middle of the month, and the rest at the end of the month.

I've asked JWB if any actions are taken to address the consistent late payment. They respond that they send notice to the tenant of any outstanding balance, and the notice is valid until mid-month. When a tenant makes a payment, a new notice is sent and a new expiration date is set. I think that's how renters avoid eviction since they just make a little payment to reset the notice expiration date.

I know I am getting full payment from the renters at the end of the month despite the consistent late payments, but consistent late payments don't look good on the ledger when selling the property with the renters.

What actions could I take, if any at all, to address the issue?

Thank you!

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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
2y
Quote from @Michael W.:
Quote from @Peter Mckernan:
Quote from @Michael W.:

Hi,

I am an out-of-state investor and have a rental property in Jacksonville Florida that is managed by JWB, a local property management company. The renters have lived in the property for 2 years now, and we have a long-term rental agreement with them, the lease ends in January 2026. For more than a year now, the renters have never paid on time. The rent is due on the 1st of the month. Each month, they would pay a little at the beginning of the month, like a couple of hundred dollars, a little in the middle of the month, and the rest at the end of the month.

I've asked JWB if any actions are taken to address the consistent late payment. They respond that they send notice to the tenant of any outstanding balance, and the notice is valid until mid-month. When a tenant makes a payment, a new notice is sent and a new expiration date is set. I think that's how renters avoid eviction since they just make a little payment to reset the notice expiration date.

I know I am getting full payment from the renters at the end of the month despite the consistent late payments, but consistent late payments don't look good on the ledger when selling the property with the renters.

What actions could I take, if any at all, to address the issue?

Thank you!


 Would get the full payment upfront at the first of the month and if they cannot fulfill that than start the eviction process. This will go on forever till you put a stop to it or just let it go. The PM company should be managing this for you 


 I completely agree with you. That's what I think the PM should do, but they often BS their reply by saying their policy of sending a notice and resending another notice after receiving partial payment. 


 Just do not collect the small amount.. And fire that PM company 

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  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    2y
    Quote from @Michael W.:
    Quote from @Kevin Sobilo:

    @Michael W., what about the late fee? Most every lease has a late fee specified either a flat dollar amount or a per day fee.

    I would be collecting a fair flat rate late fee and enjoy the extra income.

    My current late fee is a flat $50, but I plan to bump it to $75 for rents exceeding $1,000.

    I  had a habitually late payer pay well over $1k in late fees over their ~3-4 year tenancy. 

    The contract with tenants has a late fee clause, and when I talked to the PM, they replied that they would remove the late fee if they paid the rent before the end of the month. The late fee is also retained by the PM, JWB, so to me, the PM, JWB, kinda encourages the tenant to consistently pay rent late.


     That is not a great policy.  When we set a policy on the PM side we always try to have incentives aligned.  If they get 100% of the late fee, your incentives are not aligned.

    We keep 50% of the late fee.  We incur cost to collect late rent with phone calls, credit reporting, emails, texts, owner calls, etc...  We cannot provide the service for free, however, keeping 100% of the late fee does not align with a mutually beneficial relationship. 

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  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    2y
    Quote from @Michael W.:
    Quote from @Kevin Sobilo:

    @Michael W., what about the late fee? Most every lease has a late fee specified either a flat dollar amount or a per day fee.

    I would be collecting a fair flat rate late fee and enjoy the extra income.

    My current late fee is a flat $50, but I plan to bump it to $75 for rents exceeding $1,000.

    I  had a habitually late payer pay well over $1k in late fees over their ~3-4 year tenancy. 

    The contract with tenants has a late fee clause, and when I talked to the PM, they replied that they would remove the late fee if they paid the rent before the end of the month. The late fee is also retained by the PM, JWB, so to me, the PM, JWB, kinda encourages the tenant to consistently pay rent late.


     >The late fee is also retained by the PM, JWB, so to me, the PM, JWB, kinda encourages the tenant to consistently pay rent late.

    Why would you agree to this?  It is their responsibility to collect rent on time and in full.  If they do not then it is on them especially if they placed the tenant.  You have expenses, ]late fees if you miss your payments, etc.   The late payment fee should go to you and not the PM.

    It reminds me of a Dilbert cartoon.  Pointed hair boss indicated that they would pay $500 for each bug repaired.  Wally was hard at work programming.  Dilbert asked what he was doing.  Wally responded that he was coding himself a minvan (implying he is adding a lot of bugs for him to fix).

    I suspect you see the analogy.

    Good luck

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