When do you start issuing notices regarding late rent?

Sun Prairie, WI · Member since 2013 · 150 posts · 69 votes

I just want to get a general feel for when everyone is issuing their late rent notices. My rent is due on the 1st. If not paid on the 1st, there is a $50 late fee. After the 10th, there is an additional $3 per day for being late (added because I had a lovely tenant who had no motivation to pay earlier rather than later once they'd already incurred the $50 fee).

Do you give your tenants until the 5th in case it is in the mail (although I would still impose the late fee)? Or do you issue it immediately on the 2nd?

Thanks for the input.

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Mindy JensenPro Member

BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes

10y

@Jennifer A., Most landlords consider the rent due on the 1st and late on the second. It isn't late on the 5th, even if you have a grace period. It is late the day after it is due.

The longer you wait to serve them a pay or quit notice, the longer you have to go before you can file for eviction.

Every state is different, and I never owned rental property in WI so I'm not sure their laws. Issue the pay or quit the first day you can.

[email protected]Podcast Guest on Show #261

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Nancy Curran
Real Estate Investor · Chicago, IL · Member since 2014 · 286 posts · 159 votes
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due on the first, late after the 5th. Watch the per date late fees, it's not legal in all areas.
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Samantha Klein
Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
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I don't believe WI has a grace period. My rent is due on the 1st with a $35 late fee and $1 a day after, however, I issue a 3 day notice to pay or quit on the 2nd, and if rent isn't paid by midnight on the 6th, I file eviction. I have only had to issue a couple notices but they seem to be very effective, it shows you mean business and won't tolerate excuses.
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Robert Melcher
Residential Real Estate Broker · San Antonio, TX · Member since 2016 · 506 posts · 311 votes
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Immediately on the 2nd. For me, managing other people's properties, it is my responsibility to minimize the time the property is occupied without rent. Posting notice on the 2nd means we can file on the 5th or 6th and have court by the 20 th or so.
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Levi T.Pro Member
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
10y
A lot of states don't permit daily fees. We charge $95 late fee, most states limit it to 10% of the rent, so keep that in mind. We also apply a $35 admin fee to send them the pay or quit notice. Rent's are due on the 1st, midnight of the 5th it become late, and a notice is going out the door via email. The 10th we send certified, and 15th we file the UD summons — We have a no turn back policy at this point. The following month we are getting our writ, normally the 1st or 2nd week of the month, only one location is at the end of the month for landlord court for us.
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
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There may be statues relating to charging late fees and when you can post, etc. In Florida (I know this is not your state) if the rent is MAILED and the tenant is late, they must get an eight day notice to pay vs a three day notice if they can pay during office hours in the county in which the property is located. Check your state statutes for your rules and regs.
As to late fees: I dont charge them anymore. My leases state my rents must be POSTMARKED by a certain date and if so, they get a discount. We typically use $100 spread. So, your rent amount on the lease is $1500 but if you mail it by the third deduct $100.
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James DeRoest
Investor · Century, FL · Member since 2015 · 950 posts · 603 votes
10y
I don't issue a late fee notice or late rent notice, I post a 3 day pay or quit notice. I ain't running round playing games.
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Yvette M.
Reno, NV · Member since 2016 · 328 posts · 97 votes
10y
Originally posted by @Robert Melcher:

Immediately on the 2nd. For me, managing other people's properties, it is my responsibility to minimize the time the property is occupied without rent. Posting notice on the 2nd means we can file on the 5th or 6th and have court by the 20 th or so.
Same here! No mandatory grace period in CA. In the past I found that when tenants get a grace period that they tend to ALWAYS pay on the last grace day plus a grace only adds to the confusion on when rent is due.
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
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@James DeRoest
My lease states they owe an additional $75 if I have to post any notices. This $75 is identified as "additional rent". I also have a clause for a $25 additional if I have to send certified letters. I am not after their money! I am after hassle free landlording:)
The only running around I enjoy is checking the mail at the 1st of the month for rent checks:)
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Jim Adrian
Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
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Rent due on the 1st. Late on the 5th with a $50 flat late fee and letter stating there are late. On the 10th I issue a 3 day pay or quit notice (certified mail). Check your local landlord laws on what you can and cant do. I am looking to revise this timeframe as well.
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Jennifer A.
OP
Sun Prairie, WI · Member since 2013 · 150 posts · 69 votes
10y
Thanks all. I have reviewed the local laws so that I know I am complying with them regarding my fees. I just wanted to find out when people were giving notices. I'm in the process of training an inherited tenant so I have been issuing the quit or pay notices immediately after the 1st for these tenants. The other ones I've been giving until the 5th and was thinking I was being too lenient.
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Terry Martin-Back
Property Manager · Gainesville, FL · Member since 2014 · 47 posts · 20 votes
10y
What does your lease say? Who created your lease, (I hope you don't do it yourself or use a generic lease). There are many renters out there who know how to scam you because of your lease... BP is a great place for advice but you need local answers to your question.
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
10y
@Jennifer A., Most landlords consider the rent due on the 1st and late on the second. It isn't late on the 5th, even if you have a grace period. It is late the day after it is due.
The longer you wait to serve them a pay or quit notice, the longer you have to go before you can file for eviction.
Every state is different, and I never owned rental property in WI so I'm not sure their laws. Issue the pay or quit the first day you can.
[email protected]Podcast Guest on Show #261
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
10y
You are being too lenient and you are also showing preferential treatment, all tenants must be treated equally. Give notice immediately on the 2nd when rent is late.
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Jennifer A.
OP
Sun Prairie, WI · Member since 2013 · 150 posts · 69 votes
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Thanks everyone. I had an attorney with nearly 20 years of landlord tenant experience draft my leases. He's also a personal friend as we graduated from law school together.
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Jeff Gates
Investor · Cathedral City, CA · Member since 2014 · 481 posts · 170 votes
10y
If you use a Property management software package, they auto send late notices. Some even auto post the late charge in the tenant statement accounting. Not only that they warn you when to take this seriously.
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Ian WalshBusiness Member
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
10y
The exact day after the lease considers rent late. Do this every single month on time.
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Kimberly H.
Residential Real Estate Broker · Chicago Suburbs, IL · Member since 2013 · 1k+ posts · 594 votes
10y
@Jennifer A.
We do rent due on the 1st, we let them know on the 2nd that we don't have it. If not paid by the 3rd there is a late charge and then a daily late charge accrues after that up to 5% of the rent and that is also when we post the pay or quit. We use the 5% limit on the late fee because Chicago limits late fees to 5%, we are in the same county, and I've seen judges in court reduce fees if they don't think they are justifiable anyway.
I would enforce the lease the same way with all tenants, however, regardless of inherited or not.
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Bob CollettPro Member
Property Manager · Brecksville, OH · Member since 2014 · 486 posts · 464 votes
10y
Check out buildium.com. it automatically sends out late notices and invoices late fees. You end up with a proper tenant ledger.
I have been using it since I started my property management business.
Good luck.
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Account Closed
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
10y
I rented to a lot of grad students who had the money, but would forget to pay me. After I got over the idea of reminding them to pay the rent, I found it actually made my life easier. So, on the first, I started sending out a mass text to all tenants who hadn't paid me yet reminding them that rent is due now to avoid late fees.
Our lease actually had 5 days grace. I made the deposit on the 6th each month. If I didn't have a check in time for the deposit, they got a late fee for giving me more work to do. But, I also didn't allow them to pay later than that, unless they were waiting on financial aid and they proved their financial aid check was late.
Once I got rid of my inherited deadbeats, I rarely got a check after the deposit was ready.
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Levi T.Pro Member
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
10y
I have to double post on this one. I did some Googling... Looks like Wisconsin does a 5 day notice to pay or quit.
When people say they send a late notice, they normally mean they are sending a pay or quit notice, nothing else. No point in sending anything less. We send them by email, then print them out and send them certified when we mean business. Thus why we send 5th, 10th, and court filing 15th. State law requires 5 days, and certified mail is confirmation of absolute 5 days, so we are staging out in 5 days increments as you can see, as we escalate the issue.
Depending what day the 1st falls on the month, some tenants wont have the money as they live paycheck to paycheck. This is why they are likely renters after all. So keep that in mind when handing out late fees on the 2nd day type deal, as your just being an ******* to people who can't make it happen in the first place due to calendar days and pay periods. Been there, done that, was an *******.. give people 5 days to get a paycheck, and move your note payment to the end of the month.
We give them 5 days, that gives them the right amount of time in most cases to get to Friday to pay rent. No matter what, you will always have people that are late. We don't mind those who pay on the 6th or 7th each month as we make some late fees, which do add up nicely over the year, but those who are after the 10th, they got to go.
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Scott Schultz
Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
10y
if its late on the 2nd, I call or text, if they dont have it or dont have a plan, they get a 5 Day that day, I suggest Printing your 5 Day on Bright colored Paper in Bold Print, Tape it to the front door, so it can be seen from the street. Take a Photo of the notice on the door (dont bother knocking just post it) and text or email it to them, then there is no question that you did it, and everyone in the area will see what it is. I know its kinda a D!@K Move, but you need to get their attention.
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Robert Melcher
Residential Real Estate Broker · San Antonio, TX · Member since 2016 · 506 posts · 311 votes
10y
@Thomas S. is right on. Any difference in treatment from tenant to tenant might be considered a fair housing violation. For Texas, late fees can't start until rent is one full day late after due date.
So, we do due on the 1st, quit notice (it must be an absolute demand for the property, not pay or quit) on the 2nd, and late fees start on the 3rd.
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Brandyn Dietman
Milwaukee, WI · Member since 2015 · 72 posts · 16 votes
10y
Scott Schultz I I am doing my first five day pay or vacate right now in Milwaukee… I thought I could only post a notice on their door and consider it served if I tried three times in person first?
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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
10y
Yes that's right. You should just send certified mail. That's what I do.
Podcast Guest on Show #29
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Marti Statler
Chambersburg, PA · Member since 2016 · 4 posts · 0 votes
10y
I was given a genius idea by a friend of mine. In the state of PA, you can't charge late fees so he suggested I work in the opposite direction. My rental agreement states that rent is due on the fifth at the amount of $850. If they pay on or before the first, their rent is discounted by $50. After the fifth, you receive your ten day notice.
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