Tenant didn't pay the rent increase

10 Replies

Hi,

I'm new here and also green when it comes to rental properties in California. Currently, my family ran into some issues with the tenant and I would love to get some feedbacks.

The background. We have a single family home rented out for 2+years to a tenant and in the beginning of July, we'd hand delivered a letter to one of the tenants notifying them of a $50 rent increase effective this month (September). When we went to collect rent over the labor day weekend, they've only pay the old rent but not the new increased rent, which we believe is intentional on their part. We've also send out a text message to 2 of the tenants (previous communications were made via SMS) to remind them and to let us know when we can get the remaining balance of rent. They've never replied back to us.

What are our options? 3 day notice to pay or quit? 60 days notice to terminate lease? If I do the 60 day notice, do I ignore the rent increase notification given to them almost 2 months ago? If I do the 3 day notice to pay or quit and they pay the owed balance, can I end their lease in a few months from now? They are not very good tenants, so I would prefer to end their lease sooner or later.

Right now, I am composing a letter to send them demanding payment for the remaining balance. Am I allow to add a late fee payment on top of the remaining balance since they did not pay in full and the grace period is over for late rent?

Also, should I return the incorrect rent of September or do I hold on to it until I received the full amount?

Any insight on this is appreciated. Thank you

Add a late fee, the fee not paid, and the normal rent to the next months dues...That is what I would do, However I am in TN which is extremely friendly for landlords...Check with your attorney to get all facts...You need to get it right the first time with them.

Check the California laws and conduct yourself to the letter of them.  California is a tenant friendly state.  The laws will say if you have to give 60 days notice of a rent increase or more. If you have complied with that law then don't bother texting go straight to the legal notice for your state of pay or quit.  My feeling here is they may be picking up on the fact you are new to this.  Show that you are serious. When does California allow you to charge a late fee?    5 days?  30 days?

It's not clear to me if these tenants are month-to-month (since you mention increasing their rent), or you have a lease with these tenants (since you also refer to terminating their lease). 

In any event, the normal landlord response (in California) to non-payment of rent (which would include partial payment) is a 3-day notice to pay or quit.

With regard to your question "If I do the 3 day notice to pay or quit and they pay the owed balance, can I end their lease in a few months from now?"  The answer is no, you cannot end it for non-payment of rent (which is what the 3-day notice is for).  However, if you have some other legitimate reason then you may be able to end it for that reason.  Or if they are month-to-month then you can end it for no reason (with the 60 day notice).  However, how you proceed will depend on whether they are month-to-month or you have a lease with them (which as I previously stated I'm still not clear about).

As for whether to charge a late fee, that will depend on how your rental agreement with the tenant reads.  On mine, if rent isn't paid IN FULL by the end of the grace period, then a late fee is due.

As for your question about returning the "incorrect rent of September", no - do not return that.  Keep it and serve the 3-day notice to pay or quit for the amount still owed (assuming your rent increase notice was proper).

What does your lease say about late fees, etc.

Stick to your lease.

If your local law allows you to serve a pay or quit notice, then do it right away.

Either you'll get the requested rent increase, or they'll move out. Which from the sounds of it, either are acceptable options.

I would cash the check and then send them a certified letter "did you forget about the rent increase"?  Give them 5 days to get the balance to you.  If they haven't paid up by then, send them a 3 day notice to quit.

You talk about the leases but do Not specify if they are month to month, or yearly with the agreement of rent increases.

You can Google "California rent increase law" to get the California Department of Consumer Affairs instructions on rent increases.  They talk about the 30 day notice for a rent increase of 10 % or less and 60 day notice for a rent increase of over 10%.  You need to factor that the percentage is calculated on a 12 month cycle.

I would type and tape a friendly reminder of the rent increase letter and include another copy of the notice of rent increase on the door.  Inform them in the letter that they need to contact you ASAP to remedy this oversight.  Ask them to notify you when you can expect payment.  If they are good tenants who take care of your property, pay on time, and you expect them to remain longer term tenants then I would do my best to try to work the issue at amicably without causing any spite.  

Thank you everyone for all your feedbacks.

I am sorry for the misleading information. The first year is a one year lease. After that, it is month to month, which they are now in. 

@Kyle J.   This means even if they do pay the remaining balance of rent, we can still serve them the 60 day notice correct? According to the lease, even for month to month, there is a grace period of 5 days for late payments.

@Jeff B.  I have sent out a certified mail with return receipt reminding them that they need to pay the remaining dues and late fees. I will also tape a letter as well as the rent increase letter to their door as reminder (thank you for the idea)

Originally posted by @Xiao C. :

Thank you everyone for all your feedbacks.

I am sorry for the misleading information. The first year is a one year lease. After that, it is month to month, which they are now in. 

@Kyle J.  This means even if they do pay the remaining balance of rent, we can still serve them the 60 day notice correct? According to the lease, even for month to month, there is a grace period of 5 days for late payments.

@Jeff B.  I have sent out a certified mail with return receipt reminding them that they need to pay the remaining dues and late fees. I will also tape a letter as well as the rent increase letter to their door as reminder (thank you for the idea)

Yes, if they pay the remaining balance of the rent you can still serve them with the 60-day notice.  As a matter of fact, if you want the balance of rent owed and you know you are going to want them out regardless, you can actually serve them the 3-day notice and the 60-day notice at the same time. 

A couple things to keep in mind.  In the 3-day notice, you can only ask for the amount of rent that is due and you cannot ask for the late fee (even if one is due it cannot be on the 3-day notice).  Also, there are only three legally acceptable ways to serve the notice:

  • Personal service - Personally handing the notice to the tenant.
  • Substituted service on another person - The person serving the notice must leave the notice with a person of "suitable age and discretion" at the tenant's home or work and also mail a copy of the notice to the tenant at their home address.
  • Posting and mailing - Taping or tacking a copy of the notice to the rental unit in a conspicuous place (such as the front door of the rental unit) and also mail another copy to the tenant at the rental unit's address.
  • I have a reason to create a lease for 12 months with a end date. I state in the lease there is no month to month option. I also have a overstay clause that charges $60 a day for over stays of dates. On the end date, they can re sign a new lease. The new lease has a new rent price. Forty days before move out day, I discuss the option to sign a new lease with the tenant. I run into many tenants who argue about rent increases. When the market bears higher rents, the tenant will look for options and soon realize that the options do not look good.