Collect half rent?
Real Estate Agent · Mechanicsburg, PA · Member since 2014 · 529 posts · 217 votes
So I have a tenant who sent me a text message asking if she could pay $300 dollars now, and another $ 300 on the 16th plus the 25$ late fee. I inherited the tenant over a year ago and she has been very good. Hasn't complained, and besides one other late payment (last December) she's been great. However, I am starting to get worried. What should I do? If she gets paid on the 16th, the following pay day will be the 30th. So she will owe another 600 which I'm assuming would be the majority if not all of her paycheck. What does BP recommend? Thanks in advance.
I'm in agreement with @Aly W. , as she made some very good points. Especially since the tenant has been in communication with you and has otherwise been a very good tenant. Even in the best of markets, turnovers takes time, energy and money. If you have the flexibility to work with her, do. But make it a win-win, you both will lose something and gain something in the process.
Make sure it is settled within the month that rent was due. I typically will allow until mid-month to catch up if the late fee is paid and all else is in order. Our tenants must pay the late fee first, regardless. So ask her for $25 + $300 now and the other $300 by the 16th as she proposes. If you are okay with receiving rent in two installments twice a month on an ongoing basis, then make it worthwhile for you by changing the rent to a higher amount, such as $320 on the 1st and $320 on the 15th.
In our current rental environment many tenants are spending 50% or more of their income on rent. In the low-income market it is closer to 75% and most do live paycheck to paycheck. If you work with her on this, and she is not playing you, it will make your relationship stronger and she could become a great long term tenant. If you start posting notices and filing evictions as soon as you can, you will push her into looking for other housing. As soon as you file with the court, it will become part of the legal record and it could affect her ability to find other housing.
One other thing.... whenever a tenant is late with rent, I check to make sure they are paid up on utilities. They tend to go hand in hand. It is part of our rental agreement that tenants remain current with their utilities. I also will do a periodic inspection of the premises to make sure they are not violating any other terms of the rental agreement and all else is in order. Once tenants see that paying rent late will result in me keeping a closer eye on what what they are doing, they have more incentive to pay rent on time.
I would work with her letting her know you will file if you don't get the payment on the date stated. I had tenants like this in AZ and it was not permanent so they eventually sorted it out and went back to paying on time. If it was permanent change in circumstances that might be different. One issue here may be she is not keeping any reserves (or maybe it was a really high fine). I would let her know that you appreciate that she let you know and reinforce communication is always key. Even though you may not accept this again you want to remain approachable.
For the 1st vs 5th issue, does your state only allow late fees 5 days after the rent is due like RI? If so it is hard to convince tenants that they are late since there is no consequence to being late. (unlike with that ticket being late ) Someone's expectations have to change. I prefer it is theirs but some people are just ok with the 5th.
@Colleen F. thanks for the reply. I think you are right. I did emphasize the importance of her communicating the problem. To your point about reverses, I am worried. I remember last decmeber her excuse was her car insurance came out earlier then expected and she already did her christmas shopping. By the way, 6 months ago she bought a brand new Hyundai Elantra....As far as the fee's, they can be charged the following date of the due date. Since the tenant is a on month to month lease, I might ask her to sign my lease that specifically states the rent is due on the first. It also has a waiver of notice to quit. It is my understand that PA has 10 day notice to quit. (If someone would like to confirm that would be great) So I will serve the notice tomorrow so I will have the ability to file the eviction on the 17th if she doesn't pay.
I guess I am the exception. My market is a small town market and it is not unusual for me to know the person renting a house from me. I make rent due by the 5th, and late payments accrue on the 6th at the rate of $15 per day. My lease says evictions begin on the 15th but I rarely file that quickly. My day job takes up so much of my time that I probably wait too long to get tough. I rarely have tenants for less than a few years and in 20 years have only filed one eviction for my own property. If a tenant calls with a decent excuse I will give them an extension. If it gets to be regular I send them a letter. It can be difficult to evict someone you know well or like. I have a tenant who is $200 behind on his rent. I know his current job has cut hours and his wife seems to be unable to work due to health issue for the last 5 or 6 years. They have 4 kids who I know by name and he has been a volunteer fireman with my department for about 8 years. If it comes to it I will evict him. Looking at it though he has been there for at least 5 years. I have a lot of rehabbing to do if he moves out. Most likely it will require new carpet and paint. He has quit watering the backyard and all of the grass is dead as well as some lilacs. I will probably need to put at least $1,500 to $2,000 into the house to spruce it up to rent it again. Renting any house in Wyoming from November to April is pretty hard. If he gets more than 1 month behind I would evict him, but it would not be fun. Perhaps I am too soft, and I have been burned once or twice, but I can afford to give some slack. I know he is building wood items on the side to try to make extra money. Your way is better business wise, but it is not my style. To me turnover is more feared than losing 2 weeks of rent from a tenant who skips out while behind.
I guess I am the exception. My market is a small town market and it is not unusual for me to know the person renting a house from me. I make rent due by the 5th, and late payments accrue on the 6th at the rate of $15 per day. My lease says evictions begin on the 15th but I rarely file that quickly. My day job takes up so much of my time that I probably wait too long to get tough. I rarely have tenants for less than a few years and in 20 years have only filed one eviction for my own property. If a tenant calls with a decent excuse I will give them an extension. If it gets to be regular I send them a letter. It can be difficult to evict someone you know well or like. I have a tenant who is $200 behind on his rent. I know his current job has cut hours and his wife seems to be unable to work due to health issue for the last 5 or 6 years. They have 4 kids who I know by name and he has been a volunteer fireman with my department for about 8 years. If it comes to it I will evict him. Looking at it though he has been there for at least 5 years. I have a lot of rehabbing to do if he moves out. Most likely it will require new carpet and paint. He has quit watering the backyard and all of the grass is dead as well as some lilacs. I will probably need to put at least $1,500 to $2,000 into the house to spruce it up to rent it again. Renting any house in Wyoming from November to April is pretty hard. If he gets more than 1 month behind I would evict him, but it would not be fun. Perhaps I am too soft, and I have been burned once or twice, but I can afford to give some slack. I know he is building wood items on the side to try to make extra money. Your way is better business wise, but it is not my style. To me turnover is more feared than losing 2 weeks of rent from a tenant who skips out while behind.
There's got to be some give and take in a market like yours. I forget about this sometimes. I grew up in small town. "Training" a late paying tenant using consequences has limited rewards when there isn't another tenant on the horizon. I work mostly really active markets, even the small towns. Vacancy has never worried me. It would if I were where you are. Not that you should ignore issues but as long as you've got someone making the effort and not destroying your property, it makes sense to accommodate.
Just one late payment is reason enough to look for new tenants. It says a lot about them and next to always means there will be more late payments that become more recurring. Next thing you know they are 3 months owing.. Take the warning bells and at least talk with them and say if it happens again you will have to look for new tenants.. It is just the window to trouble.
Sounds like she's pretty good on her word, has she given you a reason as to why she's running late on rent? If you see her wearing new shoes or have a new purse then i'd start the paperwork like everyone else says. But if she gives a good reason, i'd consider the time factor of getting her out, getting someone else in and they may be worse then she is.
@Gordon Mosier she said she got a speeding ticket. She must have been going pretty fast in that Hyundai to get a large enough ticket to affect her ability to pay rent.
If you are wanting her out then this is a good opportunity to start that process, but me personally I'd be very clear and explain to her you cannot keep making this exception and ask her what her plan is to be able to pay in full next month. I JUST did this with a tenant. I've done this in the past and overall it's worked out for me. I actually have one tenant that I've been too tenant with over the 8 years he's lived there. I recently went back and calculated costs if I had evicted him from the start and it's been a huge savings by working with him. But I will say this is a something I know I cannot do once I have many properties.
@Christian Bors if you are even considering evicting her you might want to consider using that month-to-month lease to your advantage. I will add this may not be the best time of year to put this into practice and I since I am not familiar with your local rent laws, talk to an attorney.
Provide her with a timely notice of a rent increase(s) with a few rent options. All would require her to sign a new lease/terms.
The first could reflect an annual lease with a $X increase. The next with a six month lease (takes you to Spring) with a $X+ increase for the shorter term. The last option would be staying month-to-month with a $X++ increase.
By walking down this path, your tenant may decide to leave herself or agree to your new terms.
@Steven S. that's a good idea. However, besides this month and once last year she has been pretty good. I would prefer not to evict. I actually want her to stay as long as she can afford it. I would like her to sign my lease so I can use the waiver of notice to quit. Not sure exactly how to approach this situation without upsetting the tenant. Also, I've never increased my monthly rent before. So I'm not sure how a tenant would react. I know if I force her to move, this will cost time and money to replace her. Hence I haven't raised rents. FYI, I've only been a land lord for a little over a year.
It depends on the law in your area. In some areas, you can not continue (or start?) the eviction process if you accept partial payment. I think that's ridiculous, but hey, it's the rule of the game.
Some people in Maryland have mentioned they can accept partial rent. This is true for some COUNTIES. But not in Baltimore CITY. The City recently changed it so that you can only accept FULL payment or you can not move on with the eviction process!
@Gordon Mosier she said she got a speeding ticket. She must have been going pretty fast in that Hyundai to get a large enough ticket to affect her ability to pay rent.
Are speeding tickets cheap in PA? A speeding ticket here going just 5-10 miles over the limit will set you back minimum $350.
@Account Closed Not sure, my 2001 Mazada protege with 210k miles doesn't go that fast so I don't have to worry about speeding tickets lol