Tenant Needs Help and Can't Pay Rent

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Tenant Needs Help and Can't Pay Rent

Brandon Johnson
Investor · Baton Rouge, LA · Member since 2014 · 280 posts · 219 votes

Attention Bigger Pockets Landlord Community,

I have a tenant in Baton Rouge, LA in a low income subdivision whose daughter (living with her) has been dealing with cancer and was given up on by the medical community and she was sent home to be comfortable as the end of her life is expected soon (but she keeps hanging on).  This family has been struggling to pay rent due to this situation and they are currently a month behind on paying.  Last month I credited them $300 of the $650 that was due in order to help out because charitable giving is a big part of my life and my success and something I like to do as much as I can.  

This morning I got a call from their church because they were going to lend some financial assistance, but could only provide $200 and that was conditioned on them being able to come up with the remainder of January's past due rent.  I know they are truly falling on hard times as this family works low paying jobs.  I'm not sure what to do because I know I can't continue to let them stay and not pay rent.  Has anyone else ever had to deal with a similar situation and if so, how did you handle it?

The family has setup a Gofundme campaign that never really gained any traction.  I'm really just looking for advice on the matter.

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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
9y

I have dealt with a similar situation and the bottom line is you either let them live for free or inform them they must move.

The daughters condition is irrelevant. Tenants have payment issues of all sorts and regardless of the cause the end result is always the same....the landlord either loses money or deals with the issue on a professional bases.

Charity or business, it is your decision.  

The question for you is whether allowing them to owe money will pay off. Once the daughter is dead will they catch up or immediately move out leaving you holding the bag. My guess is once the funeral is over they will move.

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  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    I have dealt with a similar situation and the bottom line is you either let them live for free or inform them they must move.

    The daughters condition is irrelevant. Tenants have payment issues of all sorts and regardless of the cause the end result is always the same....the landlord either loses money or deals with the issue on a professional bases.

    Charity or business, it is your decision.  

    The question for you is whether allowing them to owe money will pay off. Once the daughter is dead will they catch up or immediately move out leaving you holding the bag. My guess is once the funeral is over they will move.

    13Reply
  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    9y
    Is applying for government aid an option? Not a landlord but I work with government grants on low income, in CA there are a lot of programs that nobody really know about, all they need is ask housing authority and it will trigger a chain reaction if they qualify. it is a pain on paperwork at first but same requirement is asked if they qualify on one program and apply for another. I too am a fan of charitable giving, but sometimes business is business and charity is charity. I think the 300 is already a big help.
    5Reply
  • Brandon Johnson
    OP
    Investor · Baton Rouge, LA · Member since 2014 · 280 posts · 219 votes
    9y

    @Thomas S. 

    Thank you for the suggestion.  I just passed the idea on to my tenant to go by the local housing authority and inquire about grants or aid.

    0Reply
  • Lois Ginter
    Rockford, IL · Member since 2016 · 126 posts · 48 votes
    9y

    Agree with steering them towards aid from public agencies.  Is there a hospice in the area where the daughter can stay?  That might take some of the care or financial burden off the family if the hospice has a sliding fee, and in the event you do go forward with eviction, you know that she is in a good place.  

    Besides the the public agencies, have you or the tenant contacted the local United Way chapter?  Many times they will be dialed into small non-profits that can help in various ways.  

    3Reply
  • Brandon Johnson
    OP
    Investor · Baton Rouge, LA · Member since 2014 · 280 posts · 219 votes
    9y

    @Lois Ginter

    The lady decided she wanted to be at home with family instead of hospice.  Thank you for the United Way suggestion; I have given them regular donations in the past and I passed the suggestion on to my tenant.

    1Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    9y

    @Thomas S. is right on the money here. And not to sound crass, or cynical, but if I were you and you are interested in continuing the charity, I would be sure she actually has cancer. I have worked with the public for years and you would be astounded at the number and types of lies people will often tell to get out of paying for something. Trust but verify. 

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  • Lois Ginter
    Rockford, IL · Member since 2016 · 126 posts · 48 votes
    9y
    Originally posted by @Brandon Johnson:

    @Lois Ginter

    The lady decided she wanted to be at home with family instead of hospice.  

    I would still have them investigate a hospice that might provide home care.  They might be missing work due to care requirements.   

    My MIL hung on for a year after she was told the end was near.  She and my elderly FIL relied on home hospice during that time, and it was a blessing.  Granted they had the means to pay, but some hospice agencies have sliding fees.  Hopefully if they reach out to United Way, they can connect them with a home hospice that can help. 

    3Reply
  • Jim Shepard
    Investor · Edwardsville, IL · Member since 2015 · 432 posts · 481 votes
    9y
    I would suggest taking it to the local news channel for a "compassion" segment. Maybe their gofundme account would take off with the segment. Make sure the news channel knows that you kicked in $300 towards their rent the previous month. This way you won't look like the evil landlord.
    3Reply
  • Account Closed
    Johnson City, TN · Member since 2014 · 586 posts · 705 votes
    9y

    Not being cold here, but will the electric company forgive or reduce their bill? No! It's often hard to run your business like a business when you have a compassionate heart. 

    5Reply
  • William Walker
    Investor · Wilmington, NC · Member since 2016 · 211 posts · 262 votes
    9y

    @Brandon Johnson

    Tough spot for everyone.  You seem like the charitable type and I would rather see my charity have a direct impact on a family rather than give it to a large organization and never really see it's impact (United Way CEO salary = 1.2mil). 

    One option would be to set a date.  Say 3 months, no rent, after that the tenants have to move or pay rent in full.  Stay firm on that decision when the three months is up and they say "but....".

    And to totally sidetrack this post, saying she "was given up on by the medical community" is total BS.  If that's what the tenants are telling you, then don't expect future payments from them because they are BSers.  If you believe her statement, expect lots of more excuses because they're going to keep feeding you.  Her doctor didn't say "Meh, I'm over this cancer patient, just send her home."

    4Reply
  • Tracy D.
    Investor · Neptune Beach, FL · Member since 2015 · 143 posts · 172 votes
    9y

    I was a nurse for 21 years. I believe you have been fed large spoons of baloney that the medical community just gave up. Regardless, I did all the charity I ever intend to do during the decades I was a nurse. I started in real estate as a business and for me, it would be a 'no rent, no stay' situation regardless of the reason. I hope she is able to get help if she isn't lying but you can't house the world and still expect to get ahead in this business. Best of luck to you in dealing with the decision. This is a tough business for a bleeding heart.

    6Reply
  • Account Closed
    Shirley, NY · Member since 2013 · 28 posts · 10 votes
    9y
    If you can afford to be charitable, then do the investigating to be sure she's on hospice, collect as much as you can and let her stay. But don't let her stay if it's going to cause more and more stress. Let her stay and feel good about it and feel good about what you're doing. If it's real and your not being scammed, then your making a great impact on someone's life. If I wasn't in the position though to be a bleeding heart, I'd be there with my 3 day rent demand and a hearty apology lol ...
    4Reply
  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    If you want to be charitable, donate money to the church in the renters name, you get tax deduction and they get the assistance, you'd have to talk with their pastor but it may be a way you could justify helping for a month or 2. But it is better they find housing now someplace maybe with extended family until all can get back on their feet a eviction filing will be a hardship for rental record. I'd give them notice if they have a longer lease, let them know your letting them out of lease no penalty.

    The county may be able to help with emergency assistance have them apply with the local social services department, you may have to add the daughter to the lease for her to get funds but that would be easy to do . 

    5Reply
  • Elizabeth Nourse
    Investor · Fairfax, VA · Member since 2015 · 239 posts · 90 votes
    9y

    @ Brandon 

    @Brandon Johnson 

    I've had this happen a few time in my career as a property manager and as a landlord of my own investments, both of these occurred in Northern Virginia ( near Washington DC) in the past eight years.    Two examples, to illustrate the issue:

    1. Great tenant, lived in our home for two years, always paid on time, always polite, never any excuses.  She informs us that she has cancer and wants to break the lease and move home where she has more support.   We requested documentation (which she provided) and then agreed to let her out of the lease as soon as we could find a new tenant (which we did in less than a month).   It worked for everyone and she was grateful. 

    2. Tenant with a history of payment issues, informs us that he has cancer (leukemia).  Does not pay the rent the next month, but assures us "he is working on it".  We threaten, but do not start eviction proceedings yet.  He stays at the house and does not communicate.  At the end of the month, he moves out in the middle of the night, and leaves a mess (not a big one, but some stuff). Never communicates again and we end up vacant for a month while re-leasing and essentially lost two month's rent. 

    I share this because virtually everyone will have times in their life when sickness puts stress on their finances or plans- this is not unusual and will happen repeatedly over time to an investor or a property manager.  Good people find ways to deal with it constructively, others struggle.   It sounds to me like you've got someone that's closer to my second experience. 

    Given what you've said, here's how I would approach it:

    1. Get assistance from a local licensed attorney or property manager to serve legal notice immediately, so there is no conflict about what you are currently owed.  Follow the law to the letter, so you are protected. 

    2.  Provide a list of hospice organizations and indicate that if she "moves out" within X days, you will be willing to forgive the difference, to have her "Move on".  This is a nicer way of doing cash for keys... take the smaller loss now, rather than risk the bigger one later.

    3. If she really wants to stay (and it sounds like she does) then explain that there are no options to stay without paying the rent.  She can either make the funds appear (charity is the main idea here) or you will be left paying for her, in which case I'd move with collection/ eviction.   Professionally, I do not think it's a great idea to accept partial payments of rent. 

    Hope this helps.  

    4Reply
  • Account Closed
    Developer · Austin, TX · Member since 2016 · 108 posts · 23 votes
    9y

    @Brandon Johnson

    This is tough, Brandon because this is the best kind of charity you can give. It's much more direct than giving to a multi-national charity where you don't know where the money is going.

    That said, it's all about what makes you feel better. If you let them stay and worry about the money, it's not worth it. 

    This is a fantastic way to give back to your community- but ONLY if you will really feel good about what you are doing.

    All that money you're earning- you're going to give to somebody one day. Do you want it to go to your kid's college fund? The workers on your yacht? United Way? Your contractors and their kids? Or the cancerous girl living in your house?

    If you are feeling concerned at all, get them out. Remember, you were providing them a service when they were paying you too

    2Reply
  • Turner Monroe
    Real Estate Investor · Arlington, VA · Member since 2016 · 84 posts · 26 votes
    9y

    My two, or three cents: 

    Your investments shouldn't be charity, and you should get the full rent every month. It's just good business and good accounting. That doesn't mean you can't help them out if your financially able and it doesn't interfere with your goals.

    First and foremost don't reduce your rent and require them to pay the full amount. They need to either pay it or move to somewhere they can afford. They owe that money and you might come into trouble later legally, or financially by letting them not pay it. If you want to help (and why not!? We all need help sometimes), be one of the people that donate. This helps balance your books, so your property shows that it preformed as it should, which can be important for various reason (like if you want to sell), and it clearly shows the extra came out of your pocket. 

    It's a small, but powerful difference. It makes you evaluate your own finances to see if there's room for you to personally pay out $200, $300, $400, or whatever. Also, it shows them that you are personally giving them money. By simply reducing your rent or not requiring them to pay they aren't going to see it as taking your money, even though that's what's happening.

    I say keep the rent as it is, and help out in other ways. Point them to different charity or gov. organizations, help out with the GoFundMe campaign (share it with your friends, share it in this thread!), or donate to them directly. But, don't reduce the rent, and require it to be paid on time. Separate the business and the personal.

    Have you considered giving them a loan? That way they can pay less now and you might potentially get the missing money back.

    I don't envy your situation @Brandon Johnson, but I think it's great your trying not to be soulless. Everyone could care a bit more about each other, especially in tough times.  

    1Reply
  • Michael Anderson
    Real Estate Professional · Baton Rouge, LA · Member since 2016 · 109 posts · 30 votes
    9y

    good luck, keep posting but most of all keep sharing, this is an optimal dilemma of epic proportion, that being said i tend to agree with just about everything mrs. nourse so elegantly laid out, it a tough issue no matter how you look at it, but at the end of the day you are in business to make a profit, and hopefully give away a portion to charity, and emphasis on just that "charity!"

    1Reply
  • Anthony Giannette
    Residential Real Estate Broker · Renton, WA · Member since 2014 · 87 posts · 33 votes
    9y

    @Brandon Johnson

    There is likely help in your area. We have a housing authority that subsidizes rent for such families. If you really want to do a solid and still receive the benefit from your rental, steer them, drive them and / or be with them through the application process. Remember, you are a business man and might have a bit more courage to show them the ropes. Some folks just let the impending doom become their reality and lose all motivation. Don't let your tenants do that. Their daughter may lead to the break up of the family but the right motivator at the right time can prevent 3 or more lives in this situation from spinning out of control.

    1Reply
  • Amy A.
    Portland, ME · Member since 2012 · 616 posts · 550 votes
    9y

    Where I live each town has a general assistance fund.  I had a tenant lose his job and I was really happy that he applied for GA before telling me that he couldn't pay his rent.  There was annoying paperwork and they only paid 2/3 and I had to wait a bit, but it all worked out and he paid me the other 1/3 in installments once he had a job.  Maybe your city has something similar?

    2Reply
  • Robert Steele
    Investor · Lucas, TX · Member since 2010 · 620 posts · 352 votes
    9y
    Originally posted by @Brandon Johnson:

    @Lois Ginter

    The lady decided she wanted to be at home with family instead of hospice.  Thank you for the United Way suggestion; I have given them regular donations in the past and I passed the suggestion on to my tenant.

     Money gives her the option to decide to stay at home with family instead of hospice but guess what? No money, no rent, no choice.

    There is an old saying that I think applies here; Beggars can't be choosers.

    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    Regrettably in this business no good deed goes unpunished (charity included).

    1Reply
  • Kweku Ako-adjeiPro Member
    Investor · Seattle, WA · Member since 2014 · 36 posts · 5 votes
    9y

    @Brandon Johnson keep us posted on what you decide to do and how it turns out. This is a really tough situation and I would definitely not want to be stuck in this situation! Hoping I can learn what to do if this ever happens.

    1Reply
  • Tami DuBose
    Lender · Prairieville, LA · Member since 2014 · 146 posts · 114 votes
    9y

    @Brandon Johnson, I think the consensus is "she has to go." You have plenty on your plate. If you need help, let me know. I have a way with telling people they have to go & they still like me.

    1Reply
  • Brandon Johnson
    OP
    Investor · Baton Rouge, LA · Member since 2014 · 280 posts · 219 votes
    9y

    @Kweku Ako-adjei I owe this post a long overdue update. 

    @Tami DuBose I'm glad to know I can call on you when I need a bouncer!

    The tenant ended up living for about 3 more months after this post was made.  Because of several of the suggestions posted here I was able to offer some advice that the mother took action on to get some rent assistance.  A home hospice moved in for the end of life care and they made a contribution to the family's rent.  Their local Catholic church made a similar contribution on their behalf and as of today, they are still almost a full month behind on rent, but continue to make significant progress in getting it fully caught up.  Now I am aware of at least two organizations worthy of my charitable donations in the future.

    At the end of the day, I still have a paying tenant, I was able to make a difference in someone's life when they really needed help and they still have a place to live and are not having to deal with being evicted at the same time as losing a loved one.  If the worst case scenario had come to be then I would have been out a couple months rent and had to rehab a unit that has been in rough shape since I acquired it with this tenant already in place.  

    I know the "best practice" is to follow the advice of those who say this is a business and compassion will only cost you money in a situation like this.  I've never been one to play by the rules, so I'm glad my chosen path worked out and I am pleased with the end result.  A huge thanks to all who offered their input here.  I truly appreciate the support of the BP community.  

    Law of Attraction says that thoughts become reality, so choose to focus on the good ones!

    4Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    9y

    I'm glad it worked out for you. There are occasionally happy endings to these things, I suppose in as much as a story about cancer can have a happy ending. Is the tenant still living? I was unable to gather that from your post. You said they ended up living for 3 more months after this post, but this post was only 2 months ago. 

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