How Do You Handle Tenants Who Pay Late: Strict / Flexible?

Question

Every landlord eventually runs into the issue of late rent payments. I’m wondering how other investors/landlords handle this. Do you stick to a firm process (late fees, notice to cure, etc.), or do you take it case by case depending on the tenant’s situation? I’d love to hear what’s worked best for you, especially in balancing professionalism with tenant relationships.

Drew Sygit · Answer

Perspective: been managing Class A-D for over 25 years, so we've learned a thing or two - often the hard way.

Our lease states:

1) Rent due on first, with 5-day Grace Period2) Late on 6th3) Can charge daily late fee after 10th4) Is very specific that Grace Period can be rescinded if abused (defined in lease).

We've learned to leave NOTHING vague and define everything EXTREMELY well so tenants and judges cannot misinterpret!

How we enforce:

1) EVERYONE gets a nonpayment Eviction Notice (7-Day in Michigan), regardless of their excuse or history with us. The process is fairly automated to insure this. - If tenant alerts us they will be late, our standard response thanks them for letting us know, but we are contractually obligated to send them a 7-Day - which they can ignore if they pay before the 7 days is up.

2) We have 6 Milestone triggers when we try to contact the tenants to offer Payment Plans & Cash-for-Keys:- When 7 days is up, before we send to attorney for court date- When we receive Court Date Notice from court- When we receive Eviction Judgment after court date- When Michigan's 10-days to pay-to-stay is up- When we schedule bailiff- Day before bailiff date

3) Our Payment Plans are formal, in writing and tenant MUST commit to specific Payment Dates & Amounts. We require them to submit these, we do NOT tell them what we want as we know most will just agree to anything to "buy more time".

4) We offer Cash-for-Keys option to solely gauge interest and do not offer an amount. If they are interested we engage the owner to see if/what they will approve.

5) We do try to be a LITTLE flexible. Our staff is allowed to pause the next step in the process for a maximum of 3 days - anything else requires managment & possibly owner approval. Designed so that if our staff is speaking with a tenant on a Tuesday and tenant states they can pay on Friday payday, we can flex a little.

6) We train our staff to be empathetic, but firm.

7) We have to train owners to protect them from themselves. Many want to be too nice. We update owners on every Milestone with standard messages that end with, "we will proceed unless we hear otherwise from you ASAP as long as your account has the necessary funds".

8) We rarely waive Late Fees because we require tenant to make their next 3 payments on-time before doing so - which many tenants don't do.

Remember, if YOU do not maintain control, tenants will teach you a lesson that is often painful!

Theresa Harris · Answer

Depends on the tenant.  If they let me know ahead of time and it is a few days late and only happens once or twice, I work with them. If they are habitually late, add a late fee (as per your lease) and do not renew their lease.

Mike Dymski · Answer

I have never looked at it as strict, loose, professional, unprofessional.  It's simply what it is...rent due on the 1st, late on the 6th, eviction filing on the 10th.  Anything else just means there is no due date and it's up to the resident to decide based on what they tell you.  Always handled with curtesy and respect.  There is a lengthy period from the due date on the 1st until eviction proceedings; so, there is a lot of time to cure if the resident has a temporary hardship.

Jimmy Lieu · Answer

Late rent is one of those things every landlord has to deal with sooner or later, and in my experience having a clear, consistent process is really important because it sets expectations and avoids confusion. I always recommend sticking to the lease terms with late fees and notices, but also keeping open communication with tenants—sometimes life happens and if it’s a good tenant with a solid history, a little flexibility can go a long way. That said, I avoid making a habit of case-by-case exceptions because it can turn into tenants testing boundaries. In markets like Columbus, Ohio, where I invest, the landlord laws are very fair and the process is straightforward, which makes it easier to enforce policies without dragging things out like you might see in other states. It’s one of the reasons Columbus is such a great place to own rentals—you get steady demand, cash flow that hits the 1% rule, appreciation potential from all the job and population growth, and a system that actually supports landlords when issues come up. Happy to connect and answer any questions you have!

Joseph Tadres · Answer

You should always have a late fee in your lease agreement. The truth is that people will run into tough situations, and sometimes, as a landlord, you have to be understanding.

R. Elle Berry · Answer

Absolutely agree, a late fee clause is a must in every lease. Yes, we include late fees in ours as well. Like you said, life happens and sometimes tenants run into tough situations, so there’s definitely a balance between enforcing the lease and being understanding. Thank you for responding.

Jules Aton · Answer

Great question. I've never had more than 3 rentals at one time so easy to keep track and in excellent neighborhoods which I'm sure reduces financial issues. I am flexible unless the tenant gives me a reason not to be which so far hasn't happened. I had one long term tenant who struggled to pay rent. She wanted to have her child in the excellent school district and often paid late but always paid so I let it ride.

R. Elle Berry · Answer

Thanks for sharing your experience! I agree, having rentals in strong neighborhoods definitely helps minimize financial issues. I like your perspective on being flexible with tenants as long as they’re making the effort and communicating. It’s encouraging to hear how you handled your long-term tenant who sometimes paid late but always caught up. That balance between understanding and holding tenants accountable is something I’m working to fine tune as I grow as well.

R. Elle Berry · Answer

Thanks for sharing your process. I completely see the value in holding firm to the lease so tenants don’t start to see it as negotiable. The one-time courtesy waiver with clear conditions also sounds like a fair balance.

I’m in Ohio, and our eviction process can be long too, so I understand the importance of getting out in front of nonpayment issues quickly. Like you mentioned, strong screening makes all the difference. It’s encouraging to hear how rare late payments and evictions have been for you with tenants you’ve placed compared to inherited ones. Definitely reinforces the value of solid tenant screening upfront. Thank you again.

How Do You Handle Tenants Who Pay Late: Strict / Flexible?

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