Tenant not paying rent prior to move out

34 Replies

I have a long term tenant in a SFH at $1766/mo that I contacted on November 8 to provide notice they would need to purchase the house or vacate by Feb 1. They were very interested in purchasing, and I gave him my mortgage broker's #, which he did contact. The tenant (male with Father cosigner, has wife and 2 teen kids living there) has good history other than occasional lateness (1 week), but always caught up with fees. They pay rent by depositing to my bank account by the 5th. At the time I contacted them, the Nov rent had been paid. Yesterday I checked the bank account to confirm Dec rent had been paid on time, but it had not, and the Nov rent check had bounced (which my bank never informed me of). I contacted them yesterday to find out what's going on and if they planned to move out or purchase. He told me they can't afford to purchase, they have to use their money for security on their new place, and they'll be out by Jan 1. In his mind, we have their security and last month, which should cover it. I explained what security deposit is for and that we did not collect last month rent at lease signing, and he needs to pay Nov and Dec rent Asap. He is offering to pay $1k this Friday and $1k two weeks later, and "go from there". He has a cosigner that had great income and credit 9 years ago. I told him I look forward to receiving the $1k this Friday and hearing confirmation of their move out date. I think my best option is to play nice, get what money I can through Jan 1, and then assess damages once they're out to decide if the damages are worth a small claims court suit against him and cosigner. If he fails on payments, is there any benefit to eviction notice assuming he follows through on move out by Jan 1? I think if I don't have payment and they're not out by Jan 1 (or scheduled reasonably close to that day), then I have to initiate eviction. Ideas from the landlord community?

You now learn just how hand-to-mouth your tenant has been living if they need to short change you to make their deposit and first month on a new place. 

Business is business - always, consistently, follow your procedures - which, in this case, should be to start the eviction process.  It may be disheartening to be on either side of an eviction during the holidays, but the tenant's decision was conscious and their situation is self-inflicted. 

Long term tenant right. How much have you made from him over the years?

Originally posted by @Ihe O. :

Long term tenant right. How much have you made from him over the years?

That's immaterial to the situation - the tenant is in breach of their obligations.

The tenant did not approach the OP to indicate they planned to move and to make arrangements for rent payments that would deviate from their established practice.  Instead they issued a bad cheque (whether knowingly or not) for November rent and made no effort to pay December's rent.    No curtesy was extended, no good will need be returned.

Originally posted by @Roy N. :
Originally posted by @Ihe O.:

Long term tenant right. How much have you made from him over the years?

That's immaterial to the situation - the tenant is in breach of their obligations.

The tenant did not approach the OP to indicate they planned to move and to make arrangements for rent payments that would deviate from their established practice.  Instead they issued a bad cheque (whether knowingly or not) for November rent and made no effort to pay December's rent.    No curtesy was extended, no good will need be returned.

Thanks but for some of us the name of the game is profit not catching people out on breach of lease clauses.

Originally posted by @Ihe O. :
   

Thanks but for some of us the name of the game is profit not catching people out on breach of lease clauses.

 Then, your statement is at odds with your objective and your advice does not appear motivated towards the same.   In this business, "profit" is dependent upon your tenants paying their rent.  

There is no "game" here, but there is an agreement articulated in a contract.  When one party fails to fulfill their obligations, the contract and the law provide instruments - eviction in this instance - which allow the other to mitigate loss.  

Most of the time, everyone behaves responsibly and there is no need to take such action, but there are also times when you should

Originally posted by @Roy N. :
Originally posted by @Ihe O.:
   

Thanks but for some of us the name of the game is profit not catching people out on breach of lease clauses.

 Then, your statement is at odds with your objective and your advice not motivated towards the same.   In this business, "profit" is dependent upon your tenants paying their rent.  

There is no "game" here, but there is a contract.  When one party fails to fulfill their obligations, the contract and the law provide instruments - eviction in this instance - which allow the other to mitigate loss.  

Most of the time, everyone behaves responsibly and there is no need to take such action, but there are also times when you should

Yes profit is dependent on tenants paying their rent. 

I have tenants who regularly breach the terms of their lease but they pay the rent.

If you want to run your business by being in and out of court and sending letters and notices to and fro because of your contracts you can but to me that says you are not in control of your business - your contracts are.

Originally posted by @Ihe O. :


Yes profit is dependent on tenants paying their rent. 

I have tenants who regularly breach the terms of their lease but they pay the rent.

If you want to run your business by being in and out of court and sending letters and notices to and fro because of your contracts you can but to me that says you are not in control of your business - your contracts are.

Ihe:

Not only do I disagree, but believe you are trying to be inflammatory.

I would counter that if you have tenants who regularly breach the terms of their lease, then they are controlling the agenda of your business, not you.  There is a world of difference between the tenant who comes to you in advance to indicate impending turbulence in their ability to pay their rent on time and the one who simply does not pay and says nothing - one is a "good" tenant with a problem, the other is irresponsible at best or simply a problem coming to fruition.

If you screen well and clearly articulate - up front when the lease is signed - your expectations of the tenant and the course of action that will ensue in the event of a breach, you will spend surprisingly little time sending notices or going to court.  In all the years we've been doing this, we've never had to evict a tenant we've placed {we've evicted a few inherited tenants} and have only been to court twice ... and we have 50+  tenants {and growing}.

Your contracts, and systems (processes & procedures) are just instruments you use to steer your business of providing service to your clients and, while it is your obligation to provide quality and value in your product and services, it is the client's obligation to pay for those products or services as per the agreement.

It is really that simple.

Long term tenants mean something to me under certain instances. However this isn't one of them. They are already 2 months behind and will be 3 months very soon. If they don't move when they say they are going to your problem just got a lot worse. I would start the eviction process now and explain to the tenants why.

Its December 12 and you don't have rent for November.  And he gave you a hot check for November. I'd be posting a pay or quit notice this morning.

These are soon to be a ex tenant. They have decided their long term relationship with you is worth nothing to them in light of the fact that they have no intent to respect their lease. They have stiffed you with a NSF. You need to treat them the same to protect your business.

You should be filing the eviction notice immediately to protect yourself. If not then there is not much point in bothering to have a lease with tenants. Long term tenants are only of value when they pay their rent. If they do not pay you file the eviction to protect your business interests. 

If your priority is not in protecting your financial interests and enforcing a legal contract why bother being in business. 

These tenants are leaving, they should mean nothing to you outside of the money they owe. Why should you care about them when they obviously care nothing for your situation. 

They are basically saying...Thanks for everything and by the way ........FU very much.

I can see how tenants are not aware of the laws and think they paid a deposit and last months rent, so that would cover November and December. They are wrong, but it may not be malicious. The rent is due on the first of November, and then again on the first of December. I think you should check a little more often if you actually got paid. As some people said before, it's a business. I agree with one of the contributors before me, it doesn't matter how long they have been a tenant or how much money you have made on them. You have provided a safe place for them to live, you have done all they can expect from you. You don't owe them anything.

To resolve this situation I feel communication is key, like always. Post the notice and explain to them you have to do this to protect your business. Tell them it is not personal, but that you just have no way of actually knowing with certainty they'll honor their commitments. If they will, everything is good and you'll wish them all the best. If they will not you have taken the first steps into evicting a not paying tenant. Generally most people will understand this, they'll respect you as a landlord for doing what is right for your business and they'll appreciate you explaining it to them. If they don't get it, well, chances are they'll likely will not pay and at least you are on your way to evict.

Originally posted by @Roy N. :
Originally posted by @Ihe O.:


Yes profit is dependent on tenants paying their rent. 

I have tenants who regularly breach the terms of their lease but they pay the rent.

If you want to run your business by being in and out of court and sending letters and notices to and fro because of your contracts you can but to me that says you are not in control of your business - your contracts are.

Ihe:

Not only do I disagree, but believe you are trying to be inflammatory.

I would counter that if you have tenants who regularly breach the terms of their lease, then they are controlling the agenda of your business, not you.  There is a world of difference between the tenant who comes to you in advance to indicate impending turbulence in their ability to pay their rent on time and the one who simply does not pay and says nothing - one is a "good" tenant with a problem, the other is irresponsible at best or simply a problem coming to fruition.

If you screen well and clearly articulate - up front when the lease is signed - your expectations of the tenant and the course of action that will ensue in the event of a breach, you will spend surprisingly little time sending notices or going to court.  In all the years we've been doing this, we've never had to evict a tenant we've placed {we've evicted a few inherited tenants} and have only been to court twice ... and we have 50+  tenants {and growing}.

Your contracts, and systems (processes & procedures) are just instruments you use to steer your business of providing service to your clients and, while it is your obligation to provide quality and value in your product and services, it is the client's obligation to pay for those products or services as per the agreement.

It is really that simple.

The agenda of my business is for my tenants to pay the rent.

The agenda of your business is for your tenants to follow processes and procedures.

That agenda might work for you. Be broad minded enough to understand that it might not work for everybody especially when they are dealing with a long term tenant because for many of us, that counts for something. 

I've had a tenant bounce a check. Do I think she did it intentionally. Who cares. In the end she paid her rent ,I didn't have to waste my time and money on paperwork on a court filing and I've had her for 3 years plus. That's all I care about. 

I don't even see what the debate is here. The tenant bounced the november rent payment and hasn't paid december's rent yet either. You need to serve them with the 5 day notice (or whatever day notice your county/city requires) and start the eviction process.

I don't care if someone was there 20 years. I don't let them slide on rent for a couple of months. And here's the other reason. Whose to say they are out by january 1? They may just decide to stay there as long as they can without paying any rent.  So by not filing now, you may just be delaying the inevitable and they may not end up getting away with no rent for two months, it may extend out to four or five.

The bottom line is their rent was due. If you want to stay, you need to pay. Start with the notice and then move forward based on your county/city rules. The filing alone may be enough to get them to pay up in full.

If the co-signer has perfect credit, they may just agree to pay you to avoid getting dinged on their credit.

But to suggest that just because this tenant was there for 9 years, the landlord should allow them to skip rent payments is ridiculous. 

Originally posted by @Ihe O. :


The agenda of my business is for my tenants to pay the rent.

The agenda of your business is for your tenants to follow processes and procedures.

That agenda might work for you. Be broad minded enough to understand that it might not work for everybody especially when they are dealing with a long term tenant because for many of us, that counts for something. 

I've had a tenant bounce a check. Do I think she did it intentionally. Who cares. In the end she paid her rent ,I didn't have to waste my time and money on paperwork on a court filing and I've had her for 3 years plus. That's all I care about. 

Your assumption is broad and erroneous, it would appear you have misunderstood my posts above.

It is a good thing that we have the field to conduct our businesses - real estate and non-real estate alike as we see fit.  We have too have several long term (5 - 18 year) tenants - they are long-term tenants because they pay their rent on-time, do not disturb their neighbours nor cause property damage.  In turn, we provide them with safe, efficient, and well maintained accommodations.  There is nothing additional, nor magical about the long-term tenant, landlord relationship - it is an arrangement of mutual benefit and remains so as long as their is mutual benefit.

File eviction now!!!!

I've been at this (landlord) a long time.   I believe in working with people and trying to give them the benefit of the doubt.  Filing eviction is IMHO, not a hostile act.  It's just taking the logical next step which both parties agreed to when they signed the lease.   After the eviction is  filed, I'd try and be as "emotionless" and matter-of-fact as possible in your conversation with the tenants.  The eviction notice is all you really need to show them that you intend to hold them to their agreement.  An eviction notice basically the same communication as a pitcher who is willing to pitch inside.  If that baseball reference is too obscure, I apologize.  But you can look it up on the internet, LOL.

Typical tenant behavior.  Not good, but should be expected.  Be extra vigilant in the months following move-in and the months before move-out.  Watch for the signs of a tenant '"going bad"  --  the rent gets paid later and later,  less communication from the tenant, less furniture in the apartment (either moving out or selling things), rent coming in two separate payments .... these are all signs of a tenant in financial stress or who is planning to move.

lot of pointless arguing here that I will ignore.

the main point OP needs to know is that if tenants leaves on Jan 1st, than beginning your eviction proceedings was a waste of time. However, if he does not leave, you just extended your eviction proceedings by three weeks, and thus gave tenant an extra 3 weeks in your place. in order to protect yourself, you should begin process now. if tenant complains, just tell him it is administrative  to cover your behind, and proceedings will end when rent is paid in full.

now, accepting partial rent after issuing a pay or quit notice is another issue. follow up on your local eviction laws to understand what effect partial payments has on eviction proceedings.

Originally posted by @Roy N. :
Originally posted by @Ihe O.:


The agenda of my business is for my tenants to pay the rent.

The agenda of your business is for your tenants to follow processes and procedures.

That agenda might work for you. Be broad minded enough to understand that it might not work for everybody especially when they are dealing with a long term tenant because for many of us, that counts for something. 

I've had a tenant bounce a check. Do I think she did it intentionally. Who cares. In the end she paid her rent ,I didn't have to waste my time and money on paperwork on a court filing and I've had her for 3 years plus. That's all I care about. 

Your assumption is broad and erroneous, it would appear you have misunderstood my posts above.

It is a good thing that we have the field to conduct our businesses - real estate and non-real estate alike as we see fit.  We have too have several long term (5 - 18 year) tenants - they are long-term tenants because they pay their rent on-time, do not disturb their neighbours nor cause property damage.  In turn, we provide them with safe, efficient, and well maintained accommodations.  There is nothing additional, nor magical about the long-term tenant, landlord relationship - it is an arrangement of mutual benefit and remains so as long as their is mutual benefit.

Ok let's talk about erroneous assumptions. 

You say if my tenants regularly breach their lease terms they are in control of the agenda rather than me. 

Actually  if I can persuade my tenants  to meet their obligation to pay rent without resorting to  the processes and procedures that you cite I have far more control of my business than you do.

Once you file proceedings against a non-compliant tenant  - 

You are not in control of the court date - the listing clerk is.

You are not in control of the outcome of the eviction hearing - the judge is.

You are not in control of the eviction date - the sherriff is.

In addition your own house is off limits for security reasons and for fear of something happening that prejudices the ongoing litigation. 

@Ihe O.

"if I can persuade my tenants"

Posting of a pay or quit notice is simple and easy to do. |It is all the persuasion any tenant should require to encourage them to pay rent. When they do the filing of a eviction is no longer required. On the other hand if they are not persuaded no begging on your part would have changed their decision. Pay or quit will save weeks of lost time and money when filed with the purpose of "persuading" tenants to respect their responsibilities.

If you were a landlord you would be familiar with the process and would know this.

Originally posted by @Thomas S. :

@Ihe O.

"if I can persuade my tenants"

Posting of a pay or quit notice is simple and easy to do. |It is all the persuasion any tenant should require to encourage them to pay rent. When they do the filing of a eviction is no longer required. On the other hand if they are not persuaded no begging on your part would have changed their decision. Pay or quit will save weeks of lost time and money when filed with the purpose of "persuading" tenants to respect their responsibilities.

If you were a landlord you would be familiar with the process and would know this.

Well sir.

My tenants have come to know that I don't send out snotty notices and invoke punitive clauses.

So when things go wrong my tenants don't BS me about whats wrong and they keep to their word as to how they will remedy the situation.

Because I have the social skills necessary to work with them like that. I have no need to do it your way.
Originally posted by @Ihe O. :
Originally posted by @Thomas S.:

@Ihe O.

"if I can persuade my tenants"

Posting of a pay or quit notice is simple and easy to do. |It is all the persuasion any tenant should require to encourage them to pay rent. When they do the filing of a eviction is no longer required. On the other hand if they are not persuaded no begging on your part would have changed their decision. Pay or quit will save weeks of lost time and money when filed with the purpose of "persuading" tenants to respect their responsibilities.

If you were a landlord you would be familiar with the process and would know this.

Well sir.

My tenants have come to know that I don't send out snotty notices and invoke punitive clauses.

So when things go wrong my tenants don't BS me about whats wrong and they keep to their word as to how they will remedy the situation.

Because I have the social skills necessary to work with them like that. I have no need to do it your way.

I'm also surmising you do not have 50+ of them either.

@Roy N.

I'm also surmising you do not have 50+ of them either.

It is rather obvious he is not a investor and therefor does not have tenants.

Originally posted by @Thomas S. :

@Roy N.

I'm also surmising you do not have 50+ of them either.

It is rather obvious he is not a investor and therefor does not have tenants.

 Thomas:

I might not so readily arrive at that conclusion - but that is the road I'm on.   It's quite possible Ihe has just a handful of tenants;  which affords the option of his more understanding and accommodating approach.   Being on a trajectory to have 60 - 70 tenants in another 18-months or so, we simply do not have that option ... I'm also just not that warm and cuddly ;-)

When I was a kid, my family out west had a saying about hats and cattle which fits here.....

On a related note:  Mr. Munson, I am sorry for the trajectory your thread has taken today.  However, you did get to see two different approaches towards dealing with defaulted tenants and hopefully gleaned some useful information regardless of the path you pursue.

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