New landlords, tenant is late on rent for the 3rd month

23 Replies

We have tenants that moved in October of last year, 3 months ago. We are new homeowners, and new parents. We bought the duplex that we have been living in for the past five years, and we are living in one side of it. We spent time selecting a tenant, we did a credit check, but we did not call references. The tenant has been late on rent every month since she moved in, and has neglected to pay the late fee ($25) each month, even though it is plainly outlined in the lease. Are we able to evict on these grounds? We are in Michigan.

I would type up an invoice for the late fee.  When they pay rent in March I would create a receipt or invoice that shows that the first part of the funds went towards late fees, and now they are behind on March rent.  At that point I'd have no qualms about proceeding.

But, what do you really want, because an eviction is lose-lose.

Are they good tenants other than paying late?  If they are, I'd post for unpaid rent as soon as you can and be firm on late fees, but not let it drive you crazy.  We have tenants who pay late every month, it's not worth it to bicker over.

If you want them gone, consider offering them cash for keys.  "This just isn't working out. Can we offer you $500 to break your lease and part ways so we don't have the hassle and consequences of eviction?"

Unfortunately, they are bad tenants and we are both (my fiance and I) feeling the mental strain of living next door to them. We bought the duplex after living here for five years, next door to our landlord, who was an extremely nice older woman, that we never had a single problem with, everything went smooth transitioning to renting the place after our old landlord moved out, but we feel that we have genuinely rented to the wrong people at this point.

Also, I'm trying to be clear, you're suggesting we offer them money to vacate the premises, correct?

Originally posted by @Craig Spencer :

Also, I'm trying to be clear, you're suggesting we offer them money to vacate the premises, correct?

 Cash for keys is in fact offering money for them to vacate the premises. Brandon talks about this in his books and podcasts a lot. 

@Craig Spencer, people here call that "cash for keys".  Instead of the hassle and cost of an eviction, you offer them $500 or $1000 to be out of the house by the 15th, leaving no damage and cleaned out.  Write up a brief document to sign stating this, and they'll get their deposit back.  Sort of a win-win (even though you're out a bit of money).

Best case, it'll cost you a few hundred dollars and a month or two lost rent to go through the eviction process, maybe more.  The cash for keys ends up being faster and cheaper for you.

Screw that cash for keys crap. If they goto pay the next months rent without the late fees refuse to take it and start the eviction process. I hate the idea of rewarding bad behavior. Maybe the threat of an eviction on their record will motivate them to pay the past due and start paying on time.

Hi Craig, have you had a "come to jesus"talk with the tenants about their responsibilities?  Landlord rights vary greatly from state to state and depend on the terms of the lease. For example in ohio, you mAy not assess a late fee with an oral lease and courts Often will not enforce the payment of uncollected late fees after many months. My  rental agreements specify that all future payments are first applied to past due rent or fees so under my lease your tenants would be past due on rent. All my rental agreements are month to month except for tenants with stellar credit. in ohio you can give a 30 day notice to month-to-month tenants with no reason at all. What is the term of the lease for these tenants? Are they engaging in other bad behavior?

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To me cash for keys would be an offer I might make just prior to eviction. I would have a talk with them and tell them you expect rent to paid on-time and all late fees paid. Explain to them that if you have to go thru the eviction process that you will both lose. By having an  eviction on their record, it will make it very hard for them to rent another place once they're out.

Its the standard that has been set. If you haven't charged late fees, you can't expect the tenant to pay those. Why would they pay on time if they can pay late w/o any problem or additional cost? Issue a statement whenever the grace period is up, and another statement after payment is received. Both will reflect a balance. Call and ask or go next door and inquire as to when the balance will be paid. No need to offer money at this point, nor kick them out. Just get them trained right so when they pay late, they pay your established fee to make up for that benefit. And issue your 5/10/30/whatever day notice to preserve your rights each time.

Matthew Olszak, Real Estate Agent in IL (#471019601)
847-447-6824

OK, so we are NOT AT ALL interested in keeping these tenants as neighbors. The first day they were here, they were burning a fire, illegally (per city ordinance) dangerously close to our home. They are loud, to the point that, even after only three months, we are completely unsure as to what the inside of the place even looks like. They have people living there that are not on the lease, per statements made by the lease holder, a mother and her son are in the house now, without consent. Then, to top it all off, we have two dogs, we were VERY CLEAR in our lease that we were not interested in having any pets, my wife made a concession to her that she could have her declawed 6 year old cat, and it is written in on the lease, we also have a clause in our lease that we may terminate any concession with 30 days prior notice. Two months into the lease, we began seeing a dog at the residence. We asked about the dog, and were handed paperwork stating that this dog is an "emotional support animal". It's a damned pit bull, it has already been loose in the neighborhood once, and everyone, including our neighbors who have small children, were terrified of the thing, just like ourselves. It seems to be an aggressive animal, and we know that once summer is here there will be nothing but issues. Please tell us that we have some sort of leg to stand on with the late payments?

We would love to, but have been told that there is absolutely nothing we can do about the animal, due to the ADA. We are fine with this, and honestly, I suffer from severe anxiety myself, and, while I do not see how owning a dog can amount to less stress in this situation, if it does help her, then that's great. We have been told differing opinions on the illegal tenants, but that it will be hard to prove that someone is living there that is not on the lease, we have also been told that some apartments evict on additional tenants all the time and have no problem. We are by no means rich, this was an investment into our sons future, should we get a lawyer? Rent is $950 next door, how much money should we keep in an account specifically to tackle evictions like this? We want to be prepared should this ever happen again. Also, I honestly feel like anyone that would do this to a new landlord, living directly next door, we're just not sure what this lady will do.

@John Thedford Yes, this is a year lease, we've learned our lesson here. She had an eviction on her record, but she had a story about a nasty divorce that my wife decided to buy without checking any of the facts, again, another painful lesson learned.

Originally posted by @Craig Spencer :

@John Thedford Yes, this is a year lease, we've learned our lesson here. She had an eviction on her record, but she had a story about a nasty divorce that my wife decided to buy without checking any of the facts, again, another painful lesson learned.

 I have terminated leases for breach of the lease. This may be possible in your state. I have no idea what an eviction costs there but here typically under 2K. The big worry when doing an eviction is whether the tenant goes nuts and destroys your property. As to her previous eviction I know lots of PM, and myself included, that will exclude any applicant with an eviction. They ALWAYS have a story:)

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600
Originally posted by @Craig Spencer :

We would love to, but have been told that there is absolutely nothing we can do about the animal, due to the ADA. We are fine with this, and honestly, I suffer from severe anxiety myself, and, while I do not see how owning a dog can amount to less stress in this situation, if it does help her, then that's great. We have been told differing opinions on the illegal tenants, but that it will be hard to prove that someone is living there that is not on the lease, we have also been told that some apartments evict on additional tenants all the time and have no problem. We are by no means rich, this was an investment into our sons future, should we get a lawyer? Rent is $950 next door, how much money should we keep in an account specifically to tackle evictions like this? We want to be prepared should this ever happen again. Also, I honestly feel like anyone that would do this to a new landlord, living directly next door, we're just not sure what this lady will do.

 You really need to think about getting a professional property manager. "Emotional Support Animal" is not covered by the ADA. In any case, managing tenants is not for everyone, and there's no shame in admitting as much. Hire a professional property manager, and let them handle the dirty work if you are unwilling/unable to do so. 

@Craig Spencer , you're getting a lot of really great advice here.

I dislike the cash for keys option, too. I'd skip that one for now, and perhaps revisit if they don't leave.

You need to read your lease very carefully. If it states there is a $25 late fee, charge the late fee. Don't accept partial payment, and that includes full rent minus the late fees. I like @Michele Fischer 's suggestion to type up an invoice and give it to them.

You can't do anything about the ESA if it has proper documentation. I would not even mention it to them. That's a can of worms you don't want to open.

You should deliver a Notice to Cure or Quit today, for the extra people staying in the house. This is state specific, so read your state's landlord-tenant laws to find out how many days you have to give them to cure the problem. (Does  your lease say anything about guests can only stay for X days?)

Offer to allow them out of the lease with no lease break fee if the property is returned to you in the same condition that you gave it to them.  Go through the proper legal steps to do a property inspection. Does your lease provide for an inspection?

Mindy Jensen, Real Estate Agent in CO (#FA100049656)
Originally posted by @Craig Spencer :

OK, so we are NOT AT ALL interested in keeping these tenants as neighbors. The first day they were here, they were burning a fire, illegally (per city ordinance) dangerously close to our home. They are loud, to the point that, even after only three months, we are completely unsure as to what the inside of the place even looks like. They have people living there that are not on the lease, per statements made by the lease holder, a mother and her son are in the house now, without consent. Then, to top it all off, we have two dogs, we were VERY CLEAR in our lease that we were not interested in having any pets, my wife made a concession to her that she could have her declawed 6 year old cat, and it is written in on the lease, we also have a clause in our lease that we may terminate any concession with 30 days prior notice. Two months into the lease, we began seeing a dog at the residence. We asked about the dog, and were handed paperwork stating that this dog is an "emotional support animal". It's a damned pit bull, it has already been loose in the neighborhood once, and everyone, including our neighbors who have small children, were terrified of the thing, just like ourselves. It seems to be an aggressive animal, and we know that once summer is here there will be nothing but issues. Please tell us that we have some sort of leg to stand on with the late payments?

STOP! Do not pass go, do not collect $200.

From what I have read, I think you are in over your head. get an attorney, and evict. If you do not, this tenant is going to be in charge from here on out. While you evict, spend a significant amount of time on here learning about tenant screening standards, and landlord operating procedures. Concurrently, download your local landlord tenant laws and read them twice.

If you do all that, by the time you have a new tenant you will be properly prepared to run your business.

Originally posted by @Craig Spencer :

OK, so we are NOT AT ALL interested in keeping these tenants as neighbors. The first day they were here, they were burning a fire, illegally (per city ordinance) dangerously close to our home. They are loud, to the point that, even after only three months, we are completely unsure as to what the inside of the place even looks like. They have people living there that are not on the lease, per statements made by the lease holder, a mother and her son are in the house now, without consent. Then, to top it all off, we have two dogs, we were VERY CLEAR in our lease that we were not interested in having any pets, my wife made a concession to her that she could have her declawed 6 year old cat, and it is written in on the lease, we also have a clause in our lease that we may terminate any concession with 30 days prior notice. Two months into the lease, we began seeing a dog at the residence. We asked about the dog, and were handed paperwork stating that this dog is an "emotional support animal". It's a damned pit bull, it has already been loose in the neighborhood once, and everyone, including our neighbors who have small children, were terrified of the thing, just like ourselves. It seems to be an aggressive animal, and we know that once summer is here there will be nothing but issues. Please tell us that we have some sort of leg to stand on with the late payments?

 Are you the landlord or not? If you are act like it and take action. You should not be unsure what the inside of the house looks like, do an inspection. Hold them accountable to the lease they signed and make sure your investment is being cared for appropriately... 

Thanks everyone for the input. We are by no means skilled in this area, which is why we are asking advice. This is all great advice, and I am so glad that we were able to get in contact with everyone here. I guess a big portion of this is just paranoia as to what could happen here. My wife and I are both feeling physically sick dealing with this. I think that our only option at this point may be to hire an attorney, so we can at the bare minimum know exactly what this specific set of circumstances could result in, and be sure that everything is handled properly. I can see some people saying that property management isn't for everyone etc.. We think that we can handle property management, and we don't have multiple properties, this is it, it's a duplex and we live in one side of it. We are not looking to get rich from this, we are simply trying to get some good tenants in the other side so that we can move from here completely in a couple years, the goal being to some day give the property to my son or sell it for college.

"Slow pay, is the road to no pay". Most leases, and hopefully yours, state in some form late fees are added rent.  Meaning, they haven't paid the rent.  You've established a pattern of acceptance by not enforcing FULL rent collection.  Pay a lawyer who specializes in evictions for an hours worth of time.  

FYI, since you mentioned the new landlord thing, there are tenants who rely on the good nature of the inexperienced.  They actively look for you, because anyone else would reject them.   I'm willing to bet that there was something, or many things, that maybe you overlooked and gave them a pass on just to get it rented.  These gut feelings should never be ignored.  As a landlord, you usually get trained to this pretty quick by screening lots and lots of people.  Some people never get the hang of it and for those there are PM's. 

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