Tenants not paying rent on time

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Tenants not paying rent on time

Johanna Castel
Real Estate Agent · Jackson Heights, NY · Member since 2017 · 17 posts · 4 votes

So we have an issue. 
My grandma owns a home and I do part of the landloring for her. We rented the 2nd fl apt to fellow church friends. Now at first my grandmother did not want to do business with church people but got sucked into it. They started out well, however, they are now paying rent late. Rent is due on the 1st they have up to the 10th to pay. Today is the 17th, no rent money as of yet.

Now every month is a new excuse, while there are 5 working people in the apt, someway somehow only the mom is responsible for rent and just lost her job. Lease expired and they never even gave a security deposit. They did not have it at the time and agreed to pay it little by little (which did not happen.)

Given the relationship, how can I approach the situation.? Any suggestions?
My grandma suggested I move in the 2nd floor and pay rent - the place is very big for me so she tells me I can rent the two extra bedrooms. I feel some type of way to share my space with someone. I have my husband and a baby.

I need advise.

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Michaela G.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
9y

Put up a 3 day notice. 

Grandma needs to decide whether she wants to be a landlord or support her church friends. Unfortunately, it'll likely back fire on the friendship. But it doesn't sound as if these people will catch up, if only the mother works and they're used to sitting on the couch. 

The 3 day notice will make them wake up. But then you'll have to be willing to follow through.

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  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    9y

    Put up a 3 day notice. 

    Grandma needs to decide whether she wants to be a landlord or support her church friends. Unfortunately, it'll likely back fire on the friendship. But it doesn't sound as if these people will catch up, if only the mother works and they're used to sitting on the couch. 

    The 3 day notice will make them wake up. But then you'll have to be willing to follow through.

    8Reply
  • Johanna Castel
    OP
    Real Estate Agent · Jackson Heights, NY · Member since 2017 · 17 posts · 4 votes
    9y

    Very right. 

    0Reply
  • Travis Hughes
    Denver, CO · Member since 2016 · 82 posts · 46 votes
    9y

    Two options - 

    1) Get started on the eviction process immediately.  No tenant should ever be this far delinquent without any legal action being taken.  Rent is due on the 1st and late on the 2nd (or whatever your lease says; hint: it should say late on the 2nd).  Enforce the lease.  Do not make any exceptions whatsoever.  This is business.

    2) If you don't know how to carry out an eviction, or you are afraid to do it yourself or ruin the relationship, etc, just hire a professional property manager.  These are signs that you should have had a professional managing the home in the first place.

    No pay, no stay.  Simple as that. 

    2Reply
  • Marcia Maynard
    Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    9y

    Follow the advice of @Michaela G. and @Travis Hughes.

    Question... If rent is due on the 1st, why do you they have up to the 10th to pay? I've never heard of anyone setting up a grace period like that. It defeats the purpose. In the tenants' mind, they are likely to think rent is really not due until the 10th.  The tenants need to understand through the written lease/rental agreement that rent is due on the first and late on the second.  They also need to understand that you will enforce that and charge late fees when they are due.

    The rental agreement should name all adult occupants (age 18 and above) on the lease as "jointly and severally liable". It is everyone's responsibility to make sure the rent is paid on time and in full. When you move to serve legal notices they should be served to all those named in the lease and also to "all other occupants" in case there are people residing there who are not on the lease.

    A good rule of thumb is to be "Friendly, Fair, Firm, Fast, Flexible." 

    Friendly - personable, polite and professional.... not a "friend or buddy".

    Fair - abide by all landlord tenant laws, communicate openly and honestly, no special favors for some tenants and not others.

    Firm - have the backbone to hold tenants accountable, stand by your written rental agreement.

    Fast - swift to do maintenance and repair, swift to address tenant concerns and swift to enforce the terms of the rental agreement

    Flexible - take into consideration extenuating circumstances and be flexible when it is warranted, but don't let tenants manipulate you or take control.

    Since your grandmother chose these tenants and is compromised because of her church relationship with them, do her a favor and take on the responsibility of addressing this issue as her agent. In addition to serving legal notice to "pay rent or quit", make an appointment to meet with the group, review the terms of the rental agreement, and outline next steps. 

    Take a listen to BP Podcast #83 where I share some landlording tips and strategies. If they don't pay up and get back on track, it's time to talk with them about a move-out plan. Their current behavior is either based on a lack of willingness or a lack of ability. Either way, this can't continue. Your message to them must be very clear and in a manner that positions you well to take further legal action if necessary.

    Eviction through through the courts should be a last resort, as it's very stressful for all parties, costly and time consuming. But it may come to that, so be prepared. Be sure you know and abide by all landlord-tenant laws for your jurisdiction. Establish a relationship with an attorney who specializes in this area of law and is known for handling evictions effectively and efficiently.

    Good luck!

    5Reply
  • Cosmo Iannopollo
    Investor · Wakefield, MA · Member since 2016 · 107 posts · 71 votes
    9y

    Wait, you said the lease expired? If this is true, DO NOT accept any payments they offer. You are free and clear of them if the lease has expired. The second you accept ANY money from them, they have the right to be in the property for at least another month. 

    3Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    9y
    Originally posted by @Cosmo Iannopollo:

    Wait, you said the lease expired? If this is true, DO NOT accept any payments they offer. You are free and clear of them if the lease has expired. The second you accept ANY money from them, they have the right to be in the property for at least another month. 

     Since when? When a lease expired it will automatically roll over to month-to-month tenancy. In most states the tenant can give 30 days notice to move out, but the landlord has to give 60 days notice. They're still in a lease, but it's now month to month. 

    0Reply
  • Johanna Castel
    OP
    Real Estate Agent · Jackson Heights, NY · Member since 2017 · 17 posts · 4 votes
    9y

    @Marcia Maynard very helpful thanks! I also have a relationship with them, however I'm more direct with people than she is.Ten days because in my building I have ten days after the 1st to pay rent. Is true, in my mind, rent is due on the 10th. I will set up a meeting and outline things and let them know I will proceed legally.

    Lesson learned no business with family nor friends. They freaking sucked my grandma into renting them by bringing the grandma who my grandma loves and respects.

    @Cosmo Iannopollo true. I will speak to them before kicking them out.

    I might just resort in renting upstairs myself and renting the extra rooms Airbnb or just monthly rentals.

    0Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    9y

    Advise: kick their non-paying asses to the curb. Get the eviction process started immediately. 

    Podcast Guest on Show #243
    Skyline Properties
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    4Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    9y

    Maybe also tell their grandma, so that she can tell her child and grandchildren how disappointed she is and maybe the shame will make them come up with the money. Nothing to lose.

    6Reply
  • Alan Grobmeier
    Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    9y

    My rents are due on the 1st and LATE on the 3rd.  But I run a tight ship.  LOL. 

    0Reply
  • Sean Walton
    Wholetailer & Architect · San Francisco, CA · Member since 2015 · 544 posts · 298 votes
    9y
    Originally posted by @Michaela G.:

    Maybe also tell their grandma, so that she can tell her child and grandchildren how disappointed she is and maybe the shame will make them come up with the money. Nothing to lose.

     I agree with Michaela it is straight out of the negotiation book Getting More. Bring in a 3rd party that has influence over them. In this case social and family influence. Also file the 3 day notice get the process started so they know you are serious. 

    1Reply
  • Anthony Wienke
    Missoula, MT · Member since 2016 · 163 posts · 55 votes
    9y

    If theres one thing iv learned its that a sit down meeting tends to light the preverbial fire under there @!)!

    Sit down with them and give them the hard truth that rent is way past due. They need to make that payment within three or so days. 

    It bothers me that even the closest church going friends would pull something like that. 

    They need to realize that you have expenses as well. There choice not to pay is affecting others and needs to be taken care of.

    Hope you can get the issue worked out.

    1Reply
  • Shawn AckermanPro Member
    Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
    9y

    @Johanna Castel I know it's tough when you have friends and or close associates as tenants however it's a business and if your grandma is looking for the additional income to offset fixed expenses and or other financial reasons you just have to level with the tenants and give them a notice.  I think your already being extremely generous allowing rent to be paid on the 10th.  5th of the month is my cut off point and I assess a mandatory $50 fee for paying late.  On the 6th my tenants get a 5 day notice period!  I agree with @Anthony Wenke before the notice set up a meeting between you and the tenants.  considering you are managing the property you have to establish the authority in the property which will help maintain your grandma's church relationship.  Best of luck to you.  Persist and you will winb

    1Reply
  • Carl Schmitt
    CT · Member since 2010 · 135 posts · 100 votes
    9y

    Make sure you know your state's landlord/tenant laws.  I noticed several of the people that posted "rent is due on the first, late on the second" seem to be in landlord friendly states.  The Northeast doesn't normally fall in that category.  In CT, there is a 10 day grace period.  Not much you can do before then.  

    I don't know the exact laws in NY (or NYC specifically) but finding out would be a good place to start. 

    0Reply
  • Jan H.
    Investor · Saint Johns, FL · Member since 2015 · 141 posts · 100 votes
    9y

    Imho the problem with these situations is that once they fall behind, these tenants start digging a hole for themselves that they will not be able to get out...unfortunately.

    If you want to be nice, tell them that you give them a week to move, otherwise serve the notice and start the process....unless you're running a charity.

    0Reply
  • Marcia Maynard
    Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    9y
    Originally posted by @Carl Schmitt:

    Make sure you know your state's landlord/tenant laws.  I noticed several of the people that posted "rent is due on the first, late on the second" seem to be in landlord friendly states.  The Northeast doesn't normally fall in that category.  In CT, there is a 10 day grace period.  Not much you can do before then.  

    I don't know the exact laws in NY (or NYC specifically) but finding out would be a good place to start. 

    You're right about the importance of knowing the state (and local) landlord-tenant laws. And I understand what you're thinking, but rent is legally due on the date specified in the lease or rental agreement (typically the first of the month). If it's past due, it's late. What can happen when it's late is another matter.

    Grace periods are allowed or even mandated in some states in regards to late fees. So if rent is due on the first, it's still late on the second. However, the late fee can not be charged until either a date specified by the laws for the jurisdiction or as defined by the terms of the lease. The lease must be in compliance with the laws of the jurisdiction. 

    It's also important to know when you can serve the Notice to Pay Rent or Quit (or similar notice) too, as it may vary from one jurisdiction to another. There may be a mandatory grace period for that too. And when you start counting days for the tenant to respond to the legal notice, it's important to know how days are counted in that jurisdiction too. Most places don't allow you to count the day on which the notice is served, and many don't allow you to count weekends or legal holidays either.

    I believe in New York, it's common for landlords to serve the "Written Demand for Payment of Past Due Rent" as soon as rent is past due (the day after the due date... when it becomes late).

    0Reply
  • Johanna Castel
    OP
    Real Estate Agent · Jackson Heights, NY · Member since 2017 · 17 posts · 4 votes
    9y

    All great points. I'm arranging a meeting with them first, given the relationship. I will let them know this is not working out for either party and let's try to workout a moving out plan.
    However, if it does come to giving a 3 day notice, should I serve that myself or just seek a lawyer? 

    0Reply
  • Tony Gatto
    Property Manager · Myrtle Beach, SC · Member since 2014 · 135 posts · 13 votes
    9y

    You can just call the county building/Sherrifs office in your area they will tell you how to start the eviction process.....

    We are much like the others... due on the first but late on the 5th..... We also start the process on the 5th no matter what they say... our contracts also charge them $75 on the 6th if we have to file... and if they pay late they are $5 per day and after the 15th day late and extra $100. 

    We are very firm on all this and learned from past experiences promises of money is almost never going to come and for sure never going to pay your bills. 

    (PS we have one tenant that is late every single month by about 15 days.... we have made thousands off them extra) 

    0Reply
  • Arthur Kraamwinkel
    Investor · Chatham, NY · Member since 2015 · 23 posts · 7 votes
    9y
    Tell them this is not working and they need to leave before it will cost you any more money. You and your grandmother still care about the relationship, they apparently don't.
    0Reply
  • Vitaliy Merkulov
    Property Manager · Sacramento, CA · Member since 2015 · 121 posts · 33 votes
    9y

    Please report them to Renter Inc or other bad tenant databases so future landlords are warned. You owe it to future landlords.

    1Reply
  • Johanna Castel
    OP
    Real Estate Agent · Jackson Heights, NY · Member since 2017 · 17 posts · 4 votes
    9y

    @Vitaliy Merkulov we dont have that in NYC. I'll search though.

    0Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    9y

    I'd be careful about any 'bad tenant' websites. I think you could easily open yourself up to a slander lawsuit.

    1Reply
  • Vitaliy Merkulov
    Property Manager · Sacramento, CA · Member since 2015 · 121 posts · 33 votes
    9y

    @Michaela G. Renter Inc says that it's completely legal because they are FCRA compliant and fact based so there is no reason to worry about a slander lawsuit.

    Here is what they Renter Inc says

    0Reply
  • Marcia Maynard
    Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    9y

    Situations of this nature usually happen as a combination of what the tenant and landlord have done or failed to do during the course of the relationship. Sounds to me, if paying rent late is the only issue and the landlord has not handled this appropriately from the start, then labeling the tenants as "bad tenants" is the wrong thing to do. Landlords need to take responsibility to guide their tenants to be good tenants from the start and at any time they deviate from the terms of the rental agreement.

    I favor trying to save tenancies whenever possible. Time to reboot the landlord-tenant relationship and get this back on track. Most times, if approached with good intention, tenants will step up to the plate and do the right thing. However, if they can't pay rent or won't pay rent, then talk about a move-out plan.

    2Reply
  • Cody Barrett
    Phoenix, AZ · Member since 2015 · 345 posts · 138 votes
    9y

    Confidence of what to do will come from knowledge of your state laws. Knowing what the state allows you to do will give you a few ways to solve the problem and an idea of how long it will take. Ideally you should ask what you want long term...If you think the tenant can meet your needs as a landlord while you meet your responsibilities to them then solve today's problem and set clear expectations along with regular follow ups going forward.. Might have to babysit these tenants until they're up to your standards.  Hopefully the return on that time investment is worthwhile. Good luck! 

    2Reply
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