Investor · in, MI · Member since 2013 · 226 posts · 102 votes
Had a tenant pay in full for the month (with late fee)
Got a text and girl said her husband was only supposed to give me $50 less because they needed it for groceries this week.
What they paid me is what they owed for the month, should I give them $50 back and collect next week? These tenants are late every month, but pay rent and late fee. They are currently paid in full for December (as of today).
What would you do? What would you say back to them if you keep it?
I know it is rightfully mine, but I think I am rather "soft" haha
Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
9y
@Kurt K. If you really want to be soft in this situation here is a suggestion; Go to a grocery store that is close to where they live and buy them a gift card for that grocery store for $50. Give it to them in a Christmas card and tell them Merry Christmas or Happy Holidays or whatever you think is appropriate. Give a gift to them for the holidays if they are struggling. Do not just give the cash back to them. Enforce the rental agreement.
Investor · NY · Member since 2014 · 74 posts · 49 votes
9y
@Kurt K. I'm a softie too :) How much do YOU need that $50 is the question I'd be asking. Loan them back the $50. At best, you've helped them out in a time of need. At worst, you don't get it back and you start the eviction process and be out $50. I'm much more inclined to risk losing $50 if it helps someone in need out. Yes this is a business but not every business needs to be run in a cold hearted calculating way to be successful.
Rental Property Investor · Olympia, WA · Member since 2012 · 543 posts · 311 votes
9y
@Kristopher Hanks , said it beautifully. I love it. If we are not helpful during this season, when will we be?
"Go to a grocery store that is close to where they live and buy them a gift card for that grocery store for $50. Give it to them in a Christmas card and tell them Merry Christmas or Happy Holidays or whatever you think is appropriate. Give a gift to them for the holidays if they are struggling. Do not just give the cash back to them. Enforce the rental agreement."
@Marcia Maynard, Thank you for your post. You just gifted me with two new tools for the new year. "That would be very difficult." and "I'm not prepared to do that." Thanks also for the reminder to focus on ultimate goals. Best Wishes.
Professional · San Antonio, TX · Member since 2016 · 24 posts · 2 votes
9y
I would help out and be nice about it if there struggling for food, just be in the Christmas spirit, is only once a year, god is good he'll repay you 100 times more when you help some one in need. And if there late again next month well just do what is best for you happy holidays
So, it sounds like "always late" is "on-time" for them. They're willing to eat the late fee, so hard to find fault.
You might suggest to them, however, that twice a year there are either three or five paydays in a month, and they might use that to get caught up the month after. Then, try to stay "ahead of the curve".
Seems like it would be good training for them in financial discipline.
Specialist · Charlotte, NC · Member since 2016 · 111 posts · 95 votes
9y
If you own multiple properties, for legal reasons and your sanity be CONSISTENT.
If this is the only property you own, give it back
AND offer them a $50 PAY BY THE FIRST discount on NEXT MONTHS RENT... maybe you can show them how great it feels to be early aka on time for a change.
Wholesaler · Farmington, MI · Member since 2016 · 6 posts · 2 votes
9y
I would give them the $50.00 backs in a card saying merry Christmas. Enjoy!! If they pay even late you have great tenants. And $50.00 isn't worth the stress the money can bring. I usually give my tenants that pay on time the month of December free so that they can make Christmas special for there family. But only if they pay every payment on time!
Real Estate Agent · Austin, TX · Member since 2014 · 636 posts · 486 votes
9y
I am what you might term a "soft" landlord. I always waive late fees the first time it happens, and I try to work with my tenants as much as possible, even in cases where they need to break the lease or they can't pay. That being said, people who live paycheck to paycheck choose a number of financial priorities, and you want to make sure that rent is number one. If they have to be late on their phone bill, electricity bill, gas bill, credit card bill, lotto scratch-off budget, weekly filet mignon at the Four Seasons (you get the idea), make sure that all that is being defaulted on first.
If for some crazy reason they've already deferred all those payments and they still don't have enough money, buy them enough groceries to keep them and their family nourished and start eviction proceedings. If their situation is that dire, they need to be living with stable family or in a shelter, rather than trying to hustle their way through life on their own.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
9y
I wouldn't give the $50 back but in the future maybe stick to more stringent screening criteria for tenants. You obviously rented to people who can't pay the rent on time and it sounds like that is because lack of income. It is a tough situation to go through as a landlord but just get better for next time.
Pittsburg, KS · Member since 2016 · 1 post · 0 votes
9y
I agree with the gift idea or no refund at all. I think of it as being your money not theirs, the electric company sure as hell wouldn't do it why should you. It business.
On the other hand if you truly want to help then help, food for the soul, but do it as a gift.
You have to train your tenants, that's what I say.
Regrettably the majority of small/hobby landlords lack the experience or discipline to operate by standard business practices. Their decisions are driven primarily by emotions and therefor they lack the ability to train tenants. They are also fearful of actually having to inforce policies/standards. When a business has inconsistent practices training customers is not a option. Since most of their business decisions are hampered by their personal emotions they tend to defer to what is best for the tenant not the business.
Specialist · Lakewood, CO · Member since 2014 · 1k+ posts · 1k+ votes
9y
I would have told them that I already used their rent to pay the mortgage. Everyone knows that it doesn't matter how soft you are, the bank isn't giving it back. It also helps reinforce that you aren't some moneybags they can take advantage of. Of course, step 2 is to quit being the moneybags that they take advantage of and retrain your tenants ;)
Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes
9y
I wouldn't give it back. By your own post, they are already always late. If they wanted to save a few bucks, pay on time. Like others have said, my credit cards/banks don't give me the fee back if I am late on my payments.
If you want to be helpful, refer them to the local food pantry, or other social service. Paying rent on-time is a choice about priorities.
They are already taking advantage of you for not paying on time. If this was me and they paid routinely on-time, and then this was a one-time occasion then I might consider it, although it is a bad precedent to project to them. It showcases that you are a source a cash for them, that your payment is not as important as their groceries. And by the tenants statement, they meant to short you and not pay the full amount. In that case, next month you would be looking for ways to collect the $50 in addition to next month's payment and the late fee.
Real Estate Agent · Circleville, OH · Member since 2008 · 633 posts · 488 votes
9y
It's a sign of things to come - Done this a few times. I'm a softie too and gave it back, so far I've had to evict 100% of those tenants. If they NEED $50 for groceries this month, it'll be more next month, or the month after.
You've gotta just make a decision whether you can live with the losses or not. I can't decide that, no one here can.
St Thomas, Ontario · Member since 2013 · 575 posts · 408 votes
9y
@Kurt K. Your problem is not $50, it is that these are weak tenants and that the tenancy is quite likely to fail, with them owing you rent. I would be disciplined in addressing this problem. Charge whatever late fees are permissible, give them a notice to start the eviction process as soon as they default on the rent, and get them out. If you do not approach this in a professional manner you are going to end up being owed thousands. Now is the time to be sure you are completely familiar with the relevant laws in Michigan, and be prepared. You need to be firm and fair. It would be good to identify a lawyer who specialises in eviction issues ahead of time.
Selkirk, NY · Member since 2016 · 8 posts · 2 votes
9y
If they're late every month, that late fee adds up to $600 more in your pocket each year for that inconvenience. I don't know from your post if they are good people struggling with money or not, but I like the previous suggestions of sending them a $25 or $50 gift card to the local grocery store out of the kindness of your heart, not as a refund of the late fee.
Lender · Brown City, MI · Member since 2015 · 38 posts · 28 votes
9y
Easy decision once u know if u want these tenants or not.
If u like them "gift" it in gift card form with a Christmas card.
If u don't like them revert to your business model and stay strong :)
Good luck.
Real Estate Agent · Grand Rapids, MI · Member since 2014 · 493 posts · 200 votes
9y
Among other things, you'll want to weigh whether or not you want them out--permanently. If you're willing to deal with constant late payment as you have been and this is the only reason you would evict, eviction would be a costly response. On the other hand, if you're burnt out on dealing with them and would rather have a tenant that pays you consistently and on time, you could consider evicting them. It always helps to pursue the eviction for late payment if you have a clause in your lease dealing with frequent late payment of rent. You should also consider how you treat other tenants--you want to avoid treating people differently! I generally recommend following the same course of action for all tenants--regardless of their situation to avoid fair housing complaints, etc. Seems a little heartless, but that is what government regulations force us to be.