What would do in this situtaion?

Question

I have a tenant of a SFH that was in a bad accident March 1st. He was the lone occupant of his vehicle and there were 3 people in the other vehicle of which one died. He was in serious condition and has had surgery, but is not life threatening now. I was not aware of this until the wife called on March 3rd and explained situation and said rent was going to be late (rent is due on 1st and late after 3rd) but would be paid March 6th. I did not receive it. I do not want to be uncompassionate. What would you do?

Steve Rozenberg · Answer

you always have to remember you are running a business. If you called your mortgage company and told them that story would they give you a late grace period. Absolutely not, they would say sorry and maybe send you a card but you would still be obligated to hold up your end of the contract.

What do you do when they can't pay at all? Is that your threshold?? The problem is if you do not charge and enforce your Late fees etc you are the first person to breach the contract and you are the one that could potentially be putting yourself in legal risk by violating it and not adhering to a legally binding agreement.

Follow your policies and procedures, take the emotions out of it.

Sounds mean but it's hownit needs to be, don't let their problems soon become yours.

Marcia Maynard · Answer

I agree. I would also stop by to check in on how the family is doing during this stressful time. I would express our concern for their health and well being. I would also hand them our "Rent Past Due" letter which outlines what they need to do and the timeframe for doing so.  I would find out how they plan on paying the rent. If things are unraveling for them, I would call their emergency contact and get their support system involved. I would be as flexible as I could and still keep our business interests in mind. This is an extraordinary event. Because of the extenuating circumstances, I would not serve the "Pay Rent or Quit" notice immediately, but I also would not go past mid month before doing so.

Steve Babiak · Answer

How long have they been your tenant? If they had been your tenant for many years with good payment record, you might consider "giving them some slack" for now; if relatively new, you have no history with them to justify cutting them a break. Life happens, and it wasn't your fault that this occurred.

Now, the promised day for payment has passed. What payment method do you allow? Maybe the one in the hospital is the only one who has access to the money in the bank at this time. You have to explain that you gave some leeway initially based on the promise of being paid, and that has now been unfulfilled so time for them to cover the rent.

Account Closed · Answer

Steve is correct.  Mailing a late fee notice or billing them for a late fee is a "quiet" notification that rent is still due.

I wouldn't physically call them at this point.  I would, however, call them if they don't contact you by the time you are ready to file for eviction for non payment of rent.

In this case I feel that would be a courtesy call.  Being caring and polite, but still remembering, that they can always borrow the money from mom or dad, or sister or brother, or friend or bank.

It is a shame and a hard decision to make.  But our home is not their hospital bed, and we don't have an Insurance policy paying us for rent, like a hospital would be paid by their insurance company.

HOWEVER, they may  have an insurance policy that pays the rent, and perhaps have them check it out.

Yes, tough, it is...

Nancy Neville

Jeff G. · Answer

@Randy King if they're good tenants, have rented from you for more than a year, and you've have never had a problem paying on time you might consider extending the grace period. The tenant was courteous and called you as soon as she knew rent would be late. Which, lets be honest, is more than a lot of tenants would do.

@Steve Babiak is right, you're a business. But, you also have a soul. If I were in this situation I might approach the problem like this:

• Call the tenant back and ask, "I understand your situation and, I'm really sorry. That's terrible. IF I were to extend the grace period, how long do you think you'd need at most?" Just listen. If the number the tenant comes back with is acceptable to you send them a written notice that you've agreed to their terms as a one time extension. If not, by all means enforce the terms of the contract. In either case end the conversation with "I'll see what I can do."
• In the name of "going the extra mile." You might contact some local charities to see if they can offer some emergency assistance to your tenants. Don't spend all day on it of course. Even if you do end up enforcing the late fee or perusing eviction you've shown genuine compassion for the tenant--and they know it. If you decide to do this, I'd start with the local food bank in your area.
• If they don't pay by the 25th of the month, start the eviction process--period. Once they're two moths behind (in 5 more days) they're not likely to catch up and they'll be playing the same tune next month. Consider finding a local attorney who will do "flat rate" evictions in your area if you need to evict. They tend to be reasonable and it's much of a less headache for you.

In the above case you're getting a revised payment date from your tenants, so you're not letting them of the hook or being overly flexible. If it isn't going to work, you're still evicting them in a timely manner. That's still professional and you're not just rolling over for them.

Bryan N. · Answer

@Randy King

My tenants know that I'm reasonable and will repair things promptly.  That being said, my CPA said something to me today that rang true.  He said, "anytime rent is late, remove your heart and treat it like a business.   Tenants will play on your emotions to serve themselves.  When they cry because YOU are evicting them, you have to remind them that THEY are evicting themselves".

Not fully applicable to your post, but something to consider.  Hospital today and your ok with late payment equals 6 months of "physical therapy and unemployment" that you will be  ok with.  I have a heart and believe in treating people fairly.  But, due to the nature of my work I'm very aware of the dark side of human nature and I never allow it in.  If true, I would give them a pass this month, but tell them going forward its late fees and eviction.

What would do in this situtaion?

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