Tenants who ignore late fees

[C Rutherford]

I'm wondering what other rentals do when a tenant repeatedly ignores late fees with excuses.    I have a 4 year tenant who has begun paying rent later every month, and also not paying late fees.  I am afraid they are pushing the limits and eventually will either end at eviction or me housing them months for free.... and frankly I don't have anywhere near the budget to afford this.

We have an arrangement in our leases where the tenant gets $20 off rent if they pay by bank close on the 1st.    If they are late, they then have until the 4th to pay the undiscounted rent after which a 5 day notice is mailed, which includes a late fee of $10.   Its all extremely reasonable. 
I'm not here to debate this policy, it has worked for us, its clearly printed in the lease and we are sticking with it.    The incentives are all there to pay rent on time.

I'm in Illinois, and when no rent was paid July 1st she was again mailed a 5 day notice---  which due to the holiday could not go out until the 6th. I sent it Certified Mail.   It included the $10 late fee.   Its not much, but if you are in this business at all you understand that you have to stick to the fees, otherwise they quickly learn they don't have to pay on time or budget for rent.   And once they get past the 15th the next months rent comes into play, and you are on a downward spiral.

She finally paid rent this month on the 10th.   But she only paid the rent and not the late fee.  When I asked her why, she said, "I went to pay the rent and then when I got home, the notice had just arrived in the mail."   This was clearly a lie, as the notice was mailed in the same town on the 6th.  It takes 1 day to deliver certified in our town.   She had had it three days.

This is not the first time she has done this.   I made the mistake of letting it go before with her last excuse, and was rewarded with her repeatedly ignoring the late fees.   This time I told her, "We have to go by the certified mail date, and the notice can't be closed unless you complete the payment.   If you can please deposit the remaining balance by tomorrow, we can close the notice." 
Its the 15th, and she did not pay it.   She completely ignored it.

We are losing credibility and she is taking control of the payment arrangements and not following the lease, but the amounts too small ($10) to effectively do anything.   However it seems inevitable she will push the boundaries further.   The standard 5 day notice states we must file for eviction if payment is not made when it expires, which is costly.   Because she is paying late, and not even paying the late fee, she sees no incentive to pay on time.
However eviction is basically the only card I can see rentals have, they will not listen to anything else you say.   Sending the 5 day notice every month is making it routine, and eventually this also will be ignored.    
What would you do in this situation to try and head off this lease falling through?

[Jay Hinrichs]

Quote from @Greg H.:

I own a bunch of rentals and manage them all myself.  My policy has always been to do what is best for my business and produces the best return.  While it is human nature to feel like your are being taken advantage of or losing control, I still refer to my previous statement

The reality is your options are to give notice to terminate and/or evict if necessary.  Most all jurisdictions do not allow an eviction for late fees.  My guess is you have not kept a tally be moving late fees to the next month and crediting rent toward late fees first(literally nobody does)

So the question I would ask myself in your situation is do I want to spend thousands to do a make ready for a new tenant when I have a 4 year albeit frustrating tenant in place.  No way I would go down that road.  I have a 10+ year tenant that used to be my best and now the rent trickles in around the 10th.  While I get miffed, they cause zero trouble and ultimately pay 

absolutely this is ridiculous to get sideways over 10 bucks  and risk a vacancy and or non pay and full blown eviction.. as one other person said if its bugging you enough just dont renew the lease. I see the same thing with sec 8 folks whose tenants never pay their 10 to 30 buck co pay you going to have an eviction over that ??  Just think you have a turnover which cost 3k at least these days maybe a month or two of lost rent.. How long will it take you to make that up at a measly 10 bucks a month ??  20 years LOL