Tenant late every month for the last seven months

23 Replies

I have a tenant with a yearly lease expiring in November 2014.  She has been severely late in rent payments for the last seven months.  Gave her a 5-day notice every month.  She pays partially and late but pays till end of the month.  Today is July 1, and she still owes me $285 out of $1535 (Rent plus late fee)  Remaining $1250 has been paid.  This is a big problem.  If she somehow pays till November, and I do not renew the lease, she might still not leave the house and may need to be evicted.  If I rewrite the lease month to month and raise the rent and late fee by 10-15%, will that be a better option than just telling her lease is not renewed.  What are your experiences with such a bad tenant and how would you handle it now and end of lease presuming she somehow keeps paying till then.

Yes I like the option of raising the price on the unit. You can explain to her that expenses have gone up and if she is willing to stay and pay you the extra you may not mind the hassle as much. I had a tenant in chicago who did exactly what you are referring to! I raised her rent by about 15% expecting her to move out. She did the exact opposite she signed the lease and continued paying and absorbing the late fees! While slightly frustrating I certainly don't mind getting above market rent from her :)

Have you talked with her about it?  Not sure about Oak Park - but here we cannot just write a new lease mid lease and make them sign.  If both parties agree you can do what you want.  But talk with her about what is going on and see if she wants to move.  If she cannot afford the place maybe if you let her break her lease she will just move - I had a tenant that lost her job and was scraping by to make rent.  I let them out of their lease so they could find something they could afford

Good ideas! I meant raised the rent once her lease expired also should have clarified.

@Atul Mohlajee  Always best to nip this type of thing in the bud with swift enforcement of the terms of your rental agreement.  Maybe she just can't afford to rent the unit and needs to move on.  Maybe she does't manage her money well.  Maybe she doesn't have her priorities straight.  Maybe she is experiencing a temporary set back and is spiraling downward because she can't pull herself out of the tailspin.  I would definitely talk with her about it.  Ask her what it would take to turn this around.  Tell her if she doesn't then you will need to talk with her about a move out plan.

I've had tenants who got into a pattern of paying late and paying the $50 late fee each time.  These were often the tenants who could least afford it.  It was hard to see them making the choices that they were making.   

Sitting down with the tenant and coming up with an alternative plan helped on one occasion with a tenant of ours who was behind in rent.  Monthly rent was $660 per month, so we set up a payment plan for the tenant to pay $220 every Monday and suspended late fees as long as regular payments were being made.  The tenant had a better chance of meeting his obligation without being overwhelmed.  I learned not to let a tenant get so far behind in rent and now I am swift to act when a tenant doesn't pay rent on time.

If the tenant can no longer afford to live in your place, offer cash for keys and assist them in moving out.  We provide a large trash can with hefty garbage bags and offer to dispose of their trash for them if they clean out the unit in a timely manner.  We also give them some boxes and newspaper to get them started with the packing.  

If the tenant becomes uncommunicative or uncooperative, then it is best to start the process for eviction.  Eviction should not be the first remedy, it should be the last.  Anyone who goes through an eviction process knows it is costly and time consuming.  It can also be heart wrenching or frightening, depending on the disposition of the tenant.

Good luck.  Let us know how it works out for you.

She dropped in the remaining Jume rent today so won't be timely in July either. They have three adult jobs (Her,Spouse, and a daughter all work)as I spoke with her last week and have income equalling six times monthly rent. Just bad money management. Her old landlord gave her great reference and they rented an SFH from him for 10 years. Maybe he made hiigh late fee from them. She says she will be on time next month etc. but it is a pattern and lots of frustration and drama every month trying to get my full rent.

I have almost the exact same situation with one tenant.  You have to take it case by case, and you need to consider your own tolerance.  My tenant was paying consistently late but was paying.   For me that was better than the expense of having to go through an eviction and vacancy.

I agree with Marcia.  Talk to the tenant, see if you can resolve the situation.  If staying and paying on time is unrealistic maybe you could help her find another place for less money and offer cash for keys.  I try to maintain the dignity of my tenants while helping them understand that this is a business and "we" have to adhere to certain policies.

Obviously, a very frustrating scenario. You are doing the right thing by giving the 5-day notice every time and applying the late fee. It is important because (1) it provides discipline in managing your property and (2) it helps against a defense of laches by the tenant--a difficult defense to prove, but something to be aware of. 

Nevertheless, your goal is to get paid and avoid court. So, continue with your process and continue collecting payments and late fees from the tenant. If you restructure the payment structure (e.g., weekly payment, instead of monthly) be sure to get it in writing. It may be difficult to create a new lease at this juncture, but an amendment of the current lease may be more appropriate. 

As for the lease renewal, I would want to get this tenant out at the end of the lease. If she has trouble paying you the current amount, she will likely struggle more to pay the increased rent and penalty fee. As another person commented, she probably has poor money management skills. If you want her out at the end of the lease, you can simply say that you are not renewing the lease. You may be unsure of what to do with the property--continue renting it, sell it, rehab the place, etc. If you have to evict her at that point, you probably would have had to evict her at some future point--especially after you increase the rent and late fee. 

(This is not legal advice)

My main worry is that if I tell her in October that her lease ending in November will not be renewed, she might just stay put.  What is the process in such case?  Do I still have to evict her although a notice of 30 days for non renewal of lease was given.

If she stays put, after proper notice is given your next step is to evict.  It is important NOT to accept any money after notice is given, otherwise it is implied consent for her to remain.  Cash for keys is another good suggestion.  I suggest you read up on the laws in your state, below is a start.  Good luck!

Your Rights as a Landlord or Tenant in Illinois

What is your late fee structure?  In my state we are only legally allowed to charge $75/month.  We have ours set up as follows:

Any rent due not paid by the 4th day of the monthly rental period is subject to a $30.00 late fee charge with an additional $5.00 for each additional day that the rent remains unpaid. The total late charge for any one month will not exceed $75.00. All late fees in a month will be cut in half if tenant makes arrangements to pay late in advance [declares and follows through with a payment date]. Accrued late fees in a month will be credited up to $10.00 if half of rent due is paid by the 15th. Accrued late fees in a month will be again credited up to $10.00 if an additional 25% of rent due is paid by the 25th.

Charging more for each day late is more of an incentive than a one time late fee.  We offer the credits for progress payments because we are in a low income market, and have the flexibility as long as they don't get too far behind.

I agree that it is time to talk to the tenant.  Explain that their tenant reference from you is being compromised and that you have bills to pay too.  Work up a few alternative payment options that would be acceptable to you and let them choose.  Set it up so that you are getting enough late fees to cover your frustration.  Late fees can be a good additional income source. 

Decide what you want to do and do it, not changing your course of action because you are afraid they won't comply. Tenants are completely unpredictable.  They may leave, they may not.  If you give notice and start the eviction process timely, you'll get this behind you sooner than letting it drag out, if that is what you decide is your best course of action.  Just filing the paperwork may be enough if they view the 5 day notices as empty threats.  Cash for keys is great, as is explaining how eviction filings will limit their future housing options.

Yikes. Have you mentioned to her that this is 7 mos now? Some people really don't realize how long they have been a giant pain. Perhaps you are just too nice? Everything about this seems entirely too frustrating and just happening way too often. Perhaps because they know nothing bad will happen? 

I have the same situation exactly. tenants been there 7 months and late every month,

but pay. i am evicting them . i do not want the stress of not knowing when the check is coming and having to call them each month. i am sure this won't change .  

If the tenants are 3 working adults with sufficient income to pay the rent, and none of them are concerned enough to pay it on time, they likely never will. It may not hurt to have a chat with them, but don't expect them to change their lifestyle. We  evicted a tenant that was late at least 4 times out of 9 months and each time I had to chase her to find out when she was going to pay (with the late fees).

I finally asked if she was expecting to renew the lease. She said no, and with 2 months left on it, I asked if she would like to be let out a month early. She said yes....and did not pay that last month's rent. She lied and said she would pay on the 3rd...then the 7th, and then the 15th. I filed the 3 Day Pay or Quit on the 7th, then proceeded with the eviction as she refused to pay or leave.

We've had tenants that occasionally pay late, but will tell us in advance. Those that have to be chased will always be a problem.

A tenant that doesn't care about their own financial obligations will not care about yours. Telling them you have bills and a mortgage to pay usually mean nothing.

get rid of your problems, don't perpetuate them.. non renewal= youre out

I agree to non-renewal. But knowing this tenant, I believe she will overstay even after non-renewal. Will it be easier to get her out after lease completion as compared to eviction for non-payment of rent? I might have to evict her even after lease ends and I declare non renewal of lease.

@lease end in November can be challenging..Definitely find out what's really going on.  Consider month to month to get thru winter months, otherwise it could cost more than the inconvenience of late rent..

Atul the KEY here in my mind is what I call the SNOWBALL affect. This means they pay late but the rent is paid in full each month. It doesn't start adding up with leakage over into the next month.

Example January 1,200 ( pays 1,000 in two payments ), 200 leftover for February and now 1,200 + 200 = 1,400 owed ( pays 1,100 in  2 installments), March now 1,200 + 300 = 1,500 etc.

This creates a situation from where the tenant cannot recover. If a tenant pays late is fine if you have reserves and they make it CONSISTENTLY. So for instance they pay 100 extra a month but always pay between the 7th and 10th. Then you are making an extra 1,200 a year on your unit ! If the tenant is good with everything else keep taking in that money.

Now if the tenant is causing other issues with the property and one month it's on the tenth in full, another it's 2 or 3 payments over the full month, and another it's fractional then they are all over the place ( not acceptable) . What you want is a RYTHM to get the tenant into for payment in full whatever that agreement is. You can set up late rents per day on top of a base fee. Having a single house to rent or owning an apartment building with multiple tenants plays into this decision as they will talk whereas a single house you do not need to worry about workout agreements unless you rent other houses to other members of their family in other locations.  Our Judge in eviction court here would never grant per day fees on top of the late fee past the 5th of the month but it's good to have it in the lease as it motivates some tenants to comply with timely payments.

Tenants that make partial payments  you can tell them the rent is going up because of having to pay extra for bookkeeping costs. It's a true statement as the extra time, gas, logging partial payments costs more money. If they say the late payment covers that you can say I break even filing notice every month and having to pay the bank so bookkeeping is additional. The bank owns has the loan on this property and I have to make payments to them on time. They do not care about your situation so I hope you understand. Make it about a third party you have no control over so they cannot negotiate or argue with you they just need to give you ALL the money as you are the middleman.  

Have you conducted a recent inspection of the property?? You need to for seeing what condition it is in and seeing what re-tenant costs and lost rent would add up to. You just say it is a maintenance inspection which you are looking for items to fix but real reason is to assess damage they just do not need to know that.

You need to know eviction timelines for your state in months and also need to know how much reserves you have if you had to get them out. Example you find it takes two months to get them out. You file to evict. They now stop paying the rent as they are saving up for deposit to new place to move and moving costs. You lose for example 1,400 a month times two, then another month to get rent ready again 1,400, and then another 2,000 in make ready costs to the unit. Say your deposit is one months rent. You would still be out 4,800 and the mortgage still must be paid. Could you afford to take that hit?? If the answer is no and they make 6 times rent then you need to condition them to pay.

I can keep going on but hope it helps and no legal advice.       

Posting a notice does no good if there is no follow up with it. By now they are probably conditioned to - another notice, ok we will pay when we want. I disagree w/ the comment the idea is to get paid and avoid court. The idea is to get paid and if getting paid late is a concern, why avoid court? Whatever you might lose in time and money via court, it is part of the deal and to me, its important to communicate before and after any notice to ensure the tenant is fully aware of where I stand and so I can discover any simple issues that I may have been unaware of. Also, as mentioned above make sure you understand the law regarding recieving money after the notice. In VA, there is a letter to have the tenant sign (forget the name of it), but basically states what you receive and that it doesnt affect the upcoming court date or satisfy the balance of what is owed, etc.

Thank you all for really great input. So far they have paid every month with never having payment to trickle into next month. I would continue to work with them untill first instance of nopay and file at that time. They have great upkeep of premises and no other issues. I will switch to a month to month lease and 10-15% raise in rent as they have been told and do not mind. They love the place and never want to move and I am about 5% below market rent as rents have been escalating especially this year. I will file eviction as soon as they miss the rent for one month and it trickles into next month.

Unless the tenant somehow secures a cash injection into her budget, this pattern will likely continue. Seen it several times in my own properties and got burned in most of them. 

If you want this to cease, the path of least resistance is generally not to renew her lease. Maybe give her a 90 day notice so she has ample time to find a new home and can't claim this as a defense during eviction (if it happens)

Alternatively, give her a cash for keys equivalent to 1-2 weeks rent often does the trick. Say it's for rental trucks, movers, whatever she wants to use it for, but if she agrees verbally, get it in writing as well. The goal is not to make her feel trapped, circle the wagons and say "evict me b/c I have no where else to go." 

The worst outcome is she can't pay rent and you're forced to evict her. Then you're out legal fees, repairs and lost income (unless you can get a judgment against her & collect at a later date), plus the upcoming costs of vacancy. 

@Marcia Maynard great process. I like your methodical approach with high emphasis on the human factor. Thanks.

Have you spoken with this tenant to see why he/she is always late? Is it due to her pay periods?

She just gives excuses that she was sick and had to pay medical bills.  But I doubt that.  If she delays rent, she can let medical bills go to collection.  I talked to her last week and she says that all three of them still have same jobs and she will be on time next month but that never happens. Then she has all kinds of drama, she was bringing rent but is staying at her friends house 40 miles away due to storm, ATM did not work properly, car broke down, had to work late, came to town late late night, money order machine at 711 did not work, and there is a never ending stream of excuses.  She pays a few installments of rent every and so far has completed rent payment at the last date of the month.  She is nuts and is driving me crazy. I would rather have her out at end of lease and deal with other tenants who put rent in mailbox regularly and I talk to them once every few months if there is a maintenance issue etc.  She is in 40's and has a grand kid.  Never picks up phone and keeps texting me all her plans and excuses.  My inbox gets full with her messages at the rent time which extends to two weeks or more.  I only call her on promised date if she does not pay on that date.

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