Hi guys, 

I have these tenants who moved in this past June. They seemed like great people and have done a great job with the maintenance of the unit. They painted one room and even planted a flow bed in the front. These were ideal tenants until last month when they could only pay half of September's rent on the first. They said their money got stolen and couldn't pay until two weeks later. So I agreed and was empathetic. Two weeks went by and no rent. They then said it would be paid the following week. That day came and went and nothing received. Finally a few days later I got a payment from them but it was $15 short. I had to ask them for the remaining $15 and when it was all said and done, it took almost the entire month of Sept to collect all the rent. 

Oct 1, yesterday, at 9 am I get an email saying "Hey Adam, rent will be paid Friday. Won't happen again, payday is Friday." As you can see, they didn't even ask permission to pay rent late and didn't even give me any notice rent would be late. In my opinion, emailing me the day of rent due date is unacceptable. Vacancy rates in my area are at 0% (waiting lists everywhere to get in) so I could evict them and not have an issue finding new tenants. So my question is, at what point would you evict these tenants?

Thanks, 

Adam 

I would have evicted them last month.

They moved in June? It's not like you had some long term tenant and relationship to earn them some leeway. They are a hassle early in the lease, and will be a hassle until the end.

If it is a long time tenant who has been great I would give them the one time pass like you did and I have done it before.The only difference is that I go ahead and post an eviction notice. I do let them know up front that I will be posting notice because I have to get the process going in case they cannot come through with the rent. After the rent is late and the notice has been posted I will not take any amount of rent that is less than the remaining amount plus late fees. If they are then late again the next month I do the same thing over. Once they get behind it's hard from them to get caught back up and keep paying on time.

I would start the process as soon as possible! I made that mistake and it became a habit and then it ended bad. Don't wait and cover yourself, I hope im wrong but those are signs of irresponsible tenants.

Good luck!

When they made the first half months payment, I would have returned it(in my state), gave them one week for full payment and then filed a 3 day pay or quit notice if I didn't get it.

I'd let them know politely that the bank still requires that the mortgage be paid in time.

We run a rather large portfolio (800+ units) & what has worked the best is to set a date & just evict everybody on that date. Typically that date for us is the 15th. It could vary by a day or two depending on holidays or Sundays etc but generally speaking once the 15th rolls around we put out the 3 day notice. After that we file with the courts. So all tenants, no matter what get evicted after it's filed with the court system. Keeps it really simple. It's 100% black & white. No gray.

I'm a fairly new landlord so I don't know how hard it is to actually find good tenants yet as I've only had one who is clean but sucks at paying...until in the near future.  But, I would start the notice process as soon as your lease agreement states so that in case they don't actually pay rent you are ahead of that in case you need to evict.

Sorry you're going through that! We're in the middle of an eviction now, so I know how it feels.

I would tell tenants when they sign the contract that you will put out pay or quit notices by a certain day of the month if you haven't received rent. Then stick to it, no matter their excuse!

The earlier in the month you can get started, the less potential rent income you're going to miss out on down the line.

I own and manage a portfolio of about 200 tenants. We run into this at least once a year. The second time they are late I call them and meet with them. I talk to them face to face to get a good assessment of the situation. I explain to them that they can not under any circumstances be late again or I will have to evict them. If they seem to be a bit unsure about their ability to pay rent then I tell them they need to find a new place to live immediately. I have never had to formally evict anyone. I know this method isn't for everyone but I try to be a human as much as a business man.  

I would say once per year is reasonable, but only if they pay in full by the 15th. None of this piece by piece stuff. If they are doing that it means they can't afford it, or are diverting their funds elsewhere. 

@Adam Dow Once you let them pay late, you've established precedence. I recommend you never do it again. As you've seen, being sympathetic doesn't help you or them - it only puts them behind and makes it harder for them to catch up.

And, if you have multiple rentals, what you do for one you must do for all or you're guilty, by law, of discrimination. Do you want to let everyone pay late?

Have the terms spelled out in your rental agreement and stick to them. Our state allows a tenant 5 days to pay so, if their rent is due on the 1st, we can't begin eviction until the 6th, which I do. It only takes once or twice before they either (1) learn that you're serious or (2) move. Either way, I get paid.

Just curious to you enforce a late fee?
I’m clear with my tenants that after the 5th of the month a late fee will be charged regardless of the excuse..
In NC I can only collect up to 5% late fee, I believe every State is different..

I don't know your state laws, but I would start the eviction process right away. If they pay then they stay, if not, then they are gone. If they do pay, they will find out that you aren't going to deal with their games

I have a tenant who pays late almost every third - fourth month. At times, the tenant is 100% on time, but then it will slip and be one week late, etc. Mostly it is just a few days late, which I have a grace period for (3 business days).

I have a late fee structure in my lease, and I do enforce it. This tenant seems to have no problem paying the late fees (and to be honest, it is a nice padding), but I hate the hassle of collecting late rent. I also have an eviction clause in my lease, but generally, what does that procedure look like? I have never done an eviction before, even though I have threatened it.

Any suggestions?

I have on the contract a late fee of $50 after the 3rd and $10 daily after that through the 15th.  I have on occasions waived the daily fees if they pay partial rent and agree to pay the balance within a reasonable time and actually comply.  This was I get a small compensation for the running around and I also make a note and use his "credit" with me as a reference for deciding to renew.  Hope it helps...Cheers!  

@Nathan Mills Thanks for explaining your policy to me. That's going to work for us, too.

I would say 10 days.  I have a tenant that is consistently late, but she consistently pays.  Otherwise she is a great tenant, and now I just plan for the late payment.

Originally posted by @Todd Dexheimer :

I don't know your state laws, but I would start the eviction process right away. If they pay then they stay, if not, then they are gone. If they do pay, they will find out that you aren't going to deal with their games

 This.  You can't afford the extra cost of accommodating someone else's bizarre payment schedule and it sets a bad precedent.  Your time running down payments should have a higher value associated with it than what you will lose placing a new tenant.

@Adam Dow

It depends on your local landlord-tenant law. 

In Philadelphia it takes about 3 month from the date you file with the court to evict a tenant. 

Here it makes sense to evict only if you have tenant that doesn't pay at all. Tenant that pays but late is still paying tenant. 

You should have late payment fee. Which can be a good addition to your rent income. I have a tenant who is always late but always pay on the same day (the 14-15th). I get 5% more rent from here because of the late payments.  

Really depends on your local laws. In Chicago, many would agree that you're better off paying someone to leave than trying to evict. I would strongly encourage you to enforce the late fee and let them know the eviction process starts on the 6th. 

I hate that situation. We all know if we evict them, then it will cost us money. Not to mention they will hold our house as a hostage. 

I happen to have a tenant, who ALWAYS pays late on the 10th-15th of the month when rent is supposed to be due on 1st. But she pays, and she pays in full. 

Lastly, the reason why I have never evict her is... she had been living in the same property for 6 years now. 

I kinda just let it go at this point =(

I would suggest to stick with what the lease agreement between the landlord and tenant binding contracts. From experience within the current industry I am in, lease agreement states 5 day grace period, 6th day we assess a late fee of 5% and then non payment we file on the 15th of the month and then they go to the courts on the 25th of the month. Although, I agree that you tried to be sympathetic to them but they have to understand as tenants this is a business for you as well. just wanted to add my 2 cents.

@Adam Dow ,

Do you have a M2M or a year long lease?  

I would evict them ASAP... I went through this exact same thing early this year. It started with late payments, then it became “hey were paying the rent late this month” not even a “is it ok IF we pay rent late this month... soon it moved to being 1 month behind.... eventually their lease ended and they did not want to move out (which in my state you can’t kick them out for a year lease expiring, as it automatically becomes a month to month lease). Finally I evicted them but I lost 2 mo rent plus attorney fees (I did keep their deposit but it wasn’t enough to cover everything they owed).

Lesson learned: in this business you CANNOT be a nice guy. First late should be a warning + Late Fee, second time should be an eviction filed asap

Originally posted by @Nathan Mills :

I own and manage a portfolio of about 200 tenants. We run into this at least once a year. The second time they are late I call them and meet with them. I talk to them face to face to get a good assessment of the situation. I explain to them that they can not under any circumstances be late again or I will have to evict them. If they seem to be a bit unsure about their ability to pay rent then I tell them they need to find a new place to live immediately. I have never had to formally evict anyone. I know this method isn't for everyone but I try to be a human as much as a business man.  

 I love that this person approaches things as a human and not just business.  The fact of the matter is that more than 75% of Americans live paycheck-to-paycheck.  My full time job I work for a non-profit funding agency.  I have the pleasure of working with some wonderful case managers across agencies such as United Way, Catholic Charities, and the Salvation Army.  These people work with clients to help get them back on track when an emergency happens and their next paycheck doesn't cover it.  Too many times, I've see people thrown to the street who have NEVER had a history of not making payments.  These people work 3-8 jobs a year just to take care of their families, keep a roof over their head and food on the table.  Maybe as landlords we can work to partner with some of these social service agencies to ensure not only are we getting paid but we are not contributing to a homeless population.  There is so much that goes into this and I'm happy to chat further with anyone interested in learning more.  Sometimes our society isn't the greatest when it comes to certain neighborhoods but what are we doing to help turn things around.