Non payment due to medical hardship

Real Estate Investor · Columbia, MD · Member since 2014 · 172 posts · 94 votes

My tenants just called asking if they could meet with me regarding payment of their rent. They have been in the property for three months and twice their checks bounced. The husband has recently had some serious medical issues and because of that he is not able to work. The medical issues occurred right after they signed the lease. I understand their hardship but this is a business for me so any advice on how to handle what I should do regarding their non-payment based on a medical hardship is appreciated. Thank you!

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Amanda Davis

Attorney · Dayton, OH · Member since 2015 · 32 posts · 24 votes

10y

.I would approach them about an agreed move out date and have them sign an amendment terminating the lease. This would allow to avoid an eviction on their record and you the costs If an eviction process. Also, there may be some agencies that will help them pay their rent. If they call the United Way they probably can give them a list of agencies that offer rent assistance. If they are a veteran, have them contact the VA. They might pay you the rent while they get on their feet Good Luck!

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
10y
One thing that caught my eye is that it appears - and maybe I'm wrong - that at least one of them didn't have a job when they moved in, and the other was working part-time commission, and both were trying/hoping to land RN jobs (and one apparently has, starting in November)?
One thing I feel pretty strongly about is that the opening payment - i.e. first month plus deposit - is fairly far down the list on the most important T's to cross and I's to dot. Yes, I love getting money, but I will not rent to anyone that I think will either cost me trouble or money once they become a tenant, or will have difficulty meeting the lease once they are in. For example, I have a unit that is about to be filled with a young girl, early 20's, who has a clean record but no credit and shaky finances. Without her father's co-signature on the lease, I would never be able to rent to her, even though she (he) had no trouble providing the deposit & rent, because if she were to get to a point where she had to be evicted there would be no reasonable hope of collecting anything, and it could be a battle every month for the rent. It sounds like you did good getting that size deposit (sounds kind of high, actually, on a $600/month unit), so you probably have no risk of being burned.
I think you did the right thing. It is hard to say "I'm sorry, but it has to be this way". I LOVE @Joel Owens strategy of "I'm sorry, but the bank requires the rent be collected" - if I ever get in a non-payer sob-story situation, I might just use it - and hey, it wouldn't be a lie since I am the bank, and I require rent be collected! :D
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Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
10y
I rented to a young woman with 2 kids , nice person , she called me and said she lost her job and cant pay the rent . She wanted to cut a deal , I told her that I cant and wont let her stay without paying rent , Its not my job to support her and her kids . But I wasnt totally heartless , I spent a day moving her in with her parents .
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Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
My guess is that they want to get as much of their deposit back as they could before they let you spend your time on an eviction.
I was surprised that you had $2,000 on what I thought was a $1,000 rental. But I know some places allow first, Last and deposit. If that's the case I'd be sure I was allowed to collect that much AND know under what circumstances I could withhold. I believe some jurisdictions will not allow security deposit to be held for rent due. They could stay a couple of months with the last month deposit applied, $600 discounted rent In their pockets and the court making you give them their full security deposit back even tho they've lived rent free til you can evict them.
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Kyle Penland
Investor · Dyersburg, TN · Member since 2015 · 320 posts · 100 votes
10y
I can't believe people are saying to get another check! Give you CASH for what you are owed, move, or evict! Simple as that. Like you said it is a business.
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Todd Campbell
Investor · Mc Lean, VA · Member since 2015 · 75 posts · 48 votes
10y
@Jennifer T. Great story, thanks for sharing.
@Sandra Holt I hope everything works out for both parties.
Sometimes people need to be placed into a hard position in order to activate what I call their "creative survival instinct." It is when you are faced with adversity that people grow most and work their hardest. To reference Jennifer's experience, it was a hopeless situation that would put this long time resident on the streets or in a shelter. Somehow though, it worked out.
I was cringing this entire thread, recounting the sob stories, angry words, and the amount of trash left over from evicted tenants. That however, wasn't the worst of it. Like others who posted above, unpaid rents, and a few torn up lawns from the midnight move outs.

Priorities for most people should be:
1. Food
2. Shelter
3. Clothing
I look for things out of the ordinary (and usually find them):
- Big expense items (new phone, new tv)
- Cable service works
- Internet service works
- College student still has enough money to buy beer
There are assistance programs for just about everything:
This link describes 4 different types of medical assistance https://www.medicare.gov/Pubs/pdf/11445.pdf
I'm sure they exist, but I have never heard of a registered nurse not having medical insurance or not knowing how to get medical assistance. This just doesn't fit the story very well.
Good luck! I'm pulling for you!
-todd
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Cal C.
Investor · Peachtree Corners, GA · Member since 2014 · 1k+ posts · 1k+ votes
10y
when I used to take checks if a new tenant wrote me a hot check then I required a cashier's check or a money order to pay rent for at least a year afterward.
If someone gave me two hot checks then my sympathy for them would be greatly affected. Definitely time for them to move on, because they obviously can't afford your property.
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Amanda Davis
Attorney · Dayton, OH · Member since 2015 · 32 posts · 24 votes
10y
@K.
@Account Closed The addendum wasn't for them to sign away there eviction rights ( which I know you can't do). In my experience many times if the tenant sign an agreement to move out early they are more likely to keep it, most tenants understand how hard it is to rent once an eviction is filed. The time period could easily be until the end of the month ( or whatever time period you agree on). Also, it gives you another ground for eviction, especially if they are able to become current before the month is up and the money situation is still shaky and you don't want to risk no longer renting to them.
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Aaron Mazzrillo
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
10y
Tell them they should use their free cell phone to call the ObamaCare customer service line... as you hand them the 3 day to pay rent or quit.
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Nicole A.Pro Member
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
10y
@Aaron Mazzrillo In Maryland, there is no "3 day pay or quit". The first step here is to file a "failure to pay rent." I know you really just meant "the first step in eviction", but I'm clarifying for any Maryland landlords that are reading and unfamiliar with the local laws. :-)
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Account Closed
Investor · Memphis, TN · Member since 2015 · 105 posts · 68 votes
10y
@Sandra Holt, you're the real MVP here. Good on you for sticking to your guns and treating your tenants with decency and candor. It takes guts to wager a bit of short-term profit on humanity, but I offer that it will pay you back.
It's good to watch out for your bottom line, but it is also important to realize the importance of housing in a person's life. All the best, Sandra.
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Renea Steward
Massage Therapist · Chicago, IL · Member since 2015 · 613 posts · 84 votes
10y
@Sandra Holt in your opening post you mentioned "I understand their hardship but this is a business for me" that was enough said.
This is a business so treat it as such. Give them a 5 days noticed and a 30 days noticed. Continue with your state requirements for eviction. You may not have to evict, but be prepared. It is like insurance we don't usually use it, but we have it in case we need it.
You mentioned having a 2,000 deposit, would you be as patient if you didn't have the deposit or resources to pay the mortgage on the property? By the way 2,000 for the deposit was great considering rent at 600.
In your last post in this forum you mentioned " Well, I feel like a heartless ***, but I told my tenants "no deal" and that they owe the full amount of the rent." It not the first nor will it be your last time that you find yourself feeling that way. That feeling will pass and happen less less for this type of situation.
@Account Closed she did not say 1,000 for rent. 1,000 mortgage was mentioned in @Joel Owens post.
@Kyle Penland no one has advised her to except another check. I agree with you it is business.
@Sandra Holt make sure your next move is a business move. Advice that you would give to someone else.
Enjoy as you prosper.....
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Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
10y
Originally posted by @Amanda Davis:

@K.
@Account Closed The addendum wasn't for them to sign away there eviction rights ( which I know you can't do). In my experience many times if the tenant sign an agreement to move out early they are more likely to keep it, most tenants understand how hard it is to rent once an eviction is filed. The time period could easily be until the end of the month ( or whatever time period you agree on). Also, it gives you another ground for eviction, especially if they are able to become current before the month is up and the money situation is still shaky and you don't want to risk no longer renting to them.
Amanda: you are a legal aid attorney. I am pro tenant rights. IMO the advice you gave to the OP regarding an addendum is detrimental to the recovery of her property. It gives the tenants 30 days free of legal action and rent. A tenant that does not pay by day 5 and then "agrees" to leave by end of month may or may not perform. Surely you have seen tenants not live up to their end of agreements and addendums that they signed. It sets the OP back an entire month if her tenants do not perform per the addendum. Perhaps this is what you intended. Perhaps not. But this is a landlord thread. The OP can act legally and ethically without such an addendum. There is already due process for tenants not paying rent or who do not vacate.
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Sandra Holt
OP
Real Estate Investor · Columbia, MD · Member since 2014 · 172 posts · 94 votes
10y
One thing I want to mention that I wasn't clear on is that the rent is $2000 a month, not $600 a month which is why I have a $2000 deposit.
That doesn't change anything but a lot of people were surprised I have such a big security deposit when they assumed that the rent was only $600 a month. I'm just clearing up that misconception.
The tenants came by yesterday and gave me the full amount of rent for October in certified funds. Hopefully it will be the same going forward.
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Nicole A.Pro Member
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
10y
I agree with @Account Closed, I too would like to believe that most people understand that eviction affects their ability to rent in the future and takes it seriously. However, you'd be surprised how many people will continue to push their luck with you. I'm glad you've had people who at least stand up to their word. But right now, this landlord should insure herself with all ways possible to get paying tenants asap.
Words mean nothing to some people...even when they're written down.
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Nicole A.Pro Member
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
10y
@Jennifer T. told them just yesterday or so that eviction would move forward and suddenly she has a full payment. :-)
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Sandra Holt
OP
Real Estate Investor · Columbia, MD · Member since 2014 · 172 posts · 94 votes
10y
Actually, they told me that they would have October's rent but that things would be hard for them in November and December so I was expecting full payment for October.
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Nicole A.Pro Member
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
10y
I'm confused. So they didn't give you full October payment in certified funds like you said in the previous post?
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Sandra Holt
OP
Real Estate Investor · Columbia, MD · Member since 2014 · 172 posts · 94 votes
10y
I told them last month that I was only going to accept cash or certified funds and that is what they gave me yesterday for October.
Sorry for any confusion!
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Amanda Davis
Attorney · Dayton, OH · Member since 2015 · 32 posts · 24 votes
10y
@Account Closed I only suggested the addendum because the OP did not want to evict them so I only suggested possible alternative as well suggestions of agencies that may pay rent for the tenants. I did start out my career in Legal Aid but I no longer work there and have been in the private practice. Depending on when the agreed move out day would be, it wouldn't necessarily put her back 30 days ( as if she gave them to the end of month, considering Oct. is half over). I figured the the OP would be in the best position to determine if she felt the tenants would be type to stand by their word.
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Mario Mormile
Investor/ Real Estate Agent · Burton, OH · Member since 2015 · 167 posts · 53 votes
10y
@Sandra Holt
I am in the process of tenant screening for my duplex (first rental). I know so many people who have gotten into real estate investing, bought a few rental properties, and became discouraged with tenants overtime and left the business completely. It is a shame for that to happen- seeing how amazing real estate investing is. Lots of good advice on here I hope things work out for you.
always keep in mind that you're running a business :-)
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Kevin Yeats
Lender · Fort Pierce, FL · Member since 2009 · 825 posts · 486 votes
10y
Sandra,
First sorry for this drama in your business life. I hope, in addition to the tidbits of wisdom from others in this thread, that you take a few moments to review everything involved in the rental transaction starting with how you found these tenants (or they found you) and think about what red flags went up, when and what you should have done to avoid the drama.
Perhaps better screening could have screened them out .... perhaps.
I like Eric Drenckhahn's blog .... No Nonsense Landlord and the tips that he gives (from lots of experience) on screening tenants.
Although rare, companies offer insurance for such circumstances known as Disability Income Insurance. As Health Care professionals who probably see lots of people who cannot work for extended periods of time due to illness or injury, these tenant probably understand the need. That does not mean that they acted and had a policy in place ahead of that need.
I'm really surprised that a couple of professionals renting a house with a monthly rent of $2,000 don't have more financial resources accumulated. I suspect there is more to this story than just bad luck hitting the tenants.
Best wishes
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Jack B.
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
10y
Originally posted by @Amanda Davis:

.I would approach them about an agreed move out date and have them sign an amendment terminating the lease. This would allow to avoid an eviction on their record and you the costs
If an eviction process.
Also, there may be some agencies that will help them pay their rent. If they call the United Way they probably can give them a list of agencies that offer rent assistance. If they are a veteran, have them contact the VA. They might pay you the rent while they get on their feet
Good Luck!
This is a really good suggestion. I'd explore the idea of building a payment plan for any rents still owed into said agreement as well, so that they don't ding their credit. This is a good argument for only picking tenants with good credit, so they have something they want to protect. With deadbeat 500 score tenants. I think I'm going to set a threshold and start enforcing it moving forward.
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Renea Steward
Massage Therapist · Chicago, IL · Member since 2015 · 613 posts · 84 votes
10y
@Sandra Holt thank you for clarifying the rent price is 2,000. I was thinking 600.
Enjoy as you prosper......
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Account Closed
Investor · Memphis, TN · Member since 2015 · 105 posts · 68 votes
10y
Originally posted by @Sandra Holt:

One thing I want to mention that I wasn't clear on is that the rent is $2000 a month, not $600 a month which is why I have a $2000 deposit.
That doesn't change anything but a lot of people were surprised I have such a big security deposit when they assumed that the rent was only $600 a month. I'm just clearing up that misconception.
The tenants came by yesterday and gave me the full amount of rent for October in certified funds. Hopefully it will be the same going forward.
BOOM! Good for you and your tenants. +1 for the good guys.
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Kyle Penland
Investor · Dyersburg, TN · Member since 2015 · 320 posts · 100 votes
10y
@Renea Steward Thanks! And yes, actually the second poster Greg advised her to have them meet her with a good check...Once a check is bounced, no other checks are good in my opinion.
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