Tenant excuses, how far do you go to find the truth?
Investor · New York, NY · Member since 2017 · 111 posts · 49 votes
Tenant excuses, how far do you go to find the truth?
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
8yI never ask, don't want to know, don't really care, and I think I've had two one-day late payments from all of my properties total in the past 3 or 4 years. Three rules:
1. Rent, in full, on time, all the time, every time.
2. Don't damage my property.
3. Don't cause trouble for me, the neighbors, or the police.
Of course, a lot of things fall under those 3 rules - if you don't maintain the property, you are breaking rule #2 - but that's about it. My tenants know those 3 things cannot be broached. If they are, they will be finding another place to live. If you start giving people passes on any of those 3 rules you will have an unhappy, unprofitable business model.
Skyline Properties
25 Replies
- Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes8y
If a tenant is spinning tales, that's too much drama, disrespectful and not acceptable.
I think it's wise to establish expectations with clear communication from the start and to enforce the terms of the rental agreement. Be quick to respond. Be firm, but fair. Be flexible when the situation warrants. Maintain a professional, but friendly demeanor.
From my experience, jumping right to posting a notice to "pay rent or quit" is not the best approach. I'd rather start with a dialogue with the tenant and create a solution with them. Mutual respect is key, so is open and honest communication. We aim for long-term tenancies. Legal notices are necessary in extreme cases, but a softer approach more often quickly gets us the results we need and helps maintain a positive relationship.
When a tenancy begins, we let our tenants know what we expect. We tell them up front that we value open and honest communication. We build into the rental agreement the consequences for paying rent late. If tenants are late with the rent, they will be paying us a $50 late fee. First we call/text to notify them we haven't received the rent, determine what the problem is, and remind the tenant a late fee is now due along with the rent. We may also send a "Rent Past Due" letter (we've uploaded ours to share with BP members. Go to Tools > File Place > Other Documents and look for ones authored by me) which reinforces the terms of the rental agreement they signed and serves as a demand letter. If the rent is not paid promptly at that point, we can still service a legal notice to "pay rent or quit." It rarely comes to that.
It doesn't much matter why the rent is late. I just let the tenant know what we need them to do and what will happen if they don't do it. Sometimes it's a matter of priority in how the tenant chooses to spend their money. If that's the case, I remind the tenant that paying rent and utilities had better be a top priority, because if it isn't they're risking losing their home. However, if there are extenuating circumstances, such as the tenant was hospitalized at the time (verified) and couldn't get the rent to us on time, we'll accept the rent late and even waive the late fee as a courtesy.
Better yet, be proactive and net the best results. Encourage tenants to pay their rent and utility bills automatically through "bill pay" with their bank or by electronic funds transfer or debit card via a third party service that deposits the funds directly into your account.
Bottom line though.... if the tenant can't (or won't) pay, they can't stay. Then it's time to talk about a move-out plan.
- Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes8y
I was really surprised at the amount of “professional” landlords who recently said they give their tenants 1 free pass. No thank you.
I could care less why they are late, if they are late they pay a modest $50 late fee. I really don’t know what kind of drama some people are missing in their life to involve themselves in a tenant’s. My relationship with my tenant’s is spelled out in my lease- I certainly don’t make on the fly amendments to the lease and I don’t expect them to.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes8y
I never ask, don't want to know, don't really care, and I think I've had two one-day late payments from all of my properties total in the past 3 or 4 years. Three rules:
1. Rent, in full, on time, all the time, every time.
2. Don't damage my property.
3. Don't cause trouble for me, the neighbors, or the police.
Of course, a lot of things fall under those 3 rules - if you don't maintain the property, you are breaking rule #2 - but that's about it. My tenants know those 3 things cannot be broached. If they are, they will be finding another place to live. If you start giving people passes on any of those 3 rules you will have an unhappy, unprofitable business model.
Skyline Properties - Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes8y
I used to try and work with everybody and listen to all stories with empathy. If I did it while screening I ALWAYS regretted it. No good deed shall go unpunished in this business.
A few years ago I almost quit. Just sell it all and get a job. At least then I wouldn't have to bring the drama and indigestion home.
Then I realized my problem kids were less than 10% of my portfolio. The other good 90+% would be without me and subject to a new owner and most likely one of the horrible PMs in my area.
I started giving 'I will miss you notices.' These people were paying eventually, but every week there seemed to be a dramatic 'I need to talk to you' episode.
Got rid of my 4 problem people and haven't looked back. It was literally them or me and I'm still here providing quality housing and couldn't be happier. Get rid of them for your own sanity, Trevor. Learn where you went wrong while screening and improve!
- Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes8yDepends on the history of the tenant. If they’re good and have one late payment of a week or so, I’d be fine with that. But anything beyond two weeks is nuts. Most people are salaried assuming the tenant is, which in my case they usually are, a two week period means they’ve been paid and if they don’t pay rent still, then they’re just messing with you. I (or my PM) usually serves 5 day notice within a week of rent being past the late grace period (which is the 5th or 7th, depending on the market). If they’re a good tenant and they say they have cancer or something, and they’ve been there at least 2 years, I probably give them a month to get their stuff together and then leave. If things just get worse, move to evict. Unlike some landlords I am not completely heartless and believe in giving a reasonable amount of compassion. One months rent gone won’t bankrupt me, but it may mean a lot to someone who’s in poor health. Keep the deposit and let them out of their lease. Now if they abuse that, just move to evict.
- Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes8y
You are truly a wonderful person @Caleb Heimsoth
I have the same sized heart as my tenants.
When a tenant say "My rent is late because..." it is an attempt to manipulate you into not assessing a late fee. It is always an issue that they believe might pull at your heart strings and I am sure, rarely the truth. If you feel that a late fee is some sort of a punishment, then I suppose you will feel righteous in not assessing it.
I do not see it as a punishment. I see it as just another obligation that my tenant and I have both agreed to under the terms of a contract. When they have an issue, they appreciate that I deal with is ASAP, as I have agreed to. I don't get upset and start telling them that I cut them a break so they should do the same.
When one of my inherited tenants is late with their rent they simply add the $50 to the rent. Again- they have prioritized their money in such a way that the $50 cost of being late is worth it to them. I could care less what it is for. When a landlord chooses not to assess the contracted late fee, then he is saying to the tenant that it is indeed a punishment that he can forgive. He is also setting a piss poor example of how a lease should be treated, in my opinion.
- Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes8y
@Patrick M. I don’t have a heart of gold, I just try to be generous sometimes. I was raised by very generous parents and they have done fine for themselves, so I try to be the same.
Also whenever possible I want to avoid using attorneys.
- Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes8y
I understand @Caleb Heimsoth and as I previously stated- you may be in the majority here.
I do appreciate @Steve Vaughan's post. I really just keep this as a business and I remove my personal beliefs and feelings and operate within the confines of my lease and the law. I find it makes it so much easier.
- Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes8y
You travel down a dangerous road when you start wavering from your established policies. If the rent is late, and your policy is to issue a notice, then don't change that for any tenants.
Otherwise, you will open yourself up to litigious tenants who will find a way to make your exception into a selective enforcement. They will ask, "why did you give HIM a pass and not me?" And if the person asking is a protected class, then forget about it. You're going to court.
Slippery slope. Don't do it. Policies are made for a reason. You run a business. So, run a business.
- Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes8y
@Cara Lonsdale has a good point. Keep in mind I haven’t done this yet as I haven’t really been presented with the opportunity. In most cases I would likely defer to the guidance of my property manager, as that’s what I pay them for.
If they say evicting is a good idea then I would, no questions asked as I have a good relationship with the PM and their the ones who interact with tenants
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes8y
Originally posted by @Steve Vaughan:
I used to try and work with everybody and listen to all stories with empathy. If I did it while screening I ALWAYS regretted it. No good deed shall go unpunished in this business.
A few years ago I almost quit. Just sell it all and get a job. At least then I wouldn't have to bring the drama and indigestion home.
Then I realized my problem kids were less than 10% of my portfolio. The other good 90+% would be without me and subject to a new owner and most likely one of the horrible PMs in my area.
I started giving 'I will miss you notices.' These people were paying eventually, but every week there seemed to be a dramatic 'I need to talk to you' episode.
Got rid of my 4 problem people and haven't looked back. It was literally them or me and I'm still here providing quality housing and couldn't be happier. Get rid of them for your own sanity, Trevor. Learn where you went wrong while screening and improve!
Man, isn't that the truth. I have two things to expand on right from your post-
1. Keeping perspective - you are so right, lots of times your trouble comes from one or two people. In the utility business I sometimes would think "what a bunch of deadbeats", until I sat down and realized that 90% of all the customers paid on time, all the time, and I didn't even know who they were, and another 5% paid late, but paid reliably, and paid the late fee. It was only 5% of the total customer base that we had to squeeze the money from.
2. Empathy & sob stories - my very first public manager job 20 years ago, had a young girl come in with a baby, maybe 2 months old, and ask for more time and to not have the utilities cut off. Gave me some sob story, which I bought. I gave her another 2 weeks and she didn't make good. She got disconnected, came back in with another sob story - her and the boyfriend were driving somewhere out of town, car broke down, they had to use the utility money to pay the repair bill, etc. Turned her back on and gave her another 2 or 3 weeks, with a firm date, to get the bill paid up by. The day before her pay-up date, the property owner came in the office to see if she had paid up on her bills (in that state, utility bills become a lien against the property if unpaid). Told him she had until the next day, and the property owner let us know that they had skipped town that weekend, owing several months of back rent and he had no deposit because he had let them use it one month to pay the rent. Everyone got burned, I felt like a total fool, and it was the last time I let a sob story factor in to what needs to be done. Ever since, I have always told people "It's not personal, it's just business, and this is what has to happen in a business."
Skyline Properties - Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes8y
@Account Closed it doesn't matter if they are telling the truth and it doesn't matter why they are late. When you enable people, it hurts them more in the long run. Follow established processes consistently. You can be empathetic without bending your policies.
- 8yDick RosenPro MemberProperty Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes
Issue the notice... there are no excuses that matter, you are running a business!
I used to be VERY UNDERSTANDING when I started out.
I had one bad tenant who kept paying late because he was "TOO BUSY" to deal with rent. I noticed it was getting progressively worse every month and obviously, the issue was my being too easy going, I trained him to ignore my written rules. On month #10 I was traveling on business in Singapore and I didn't have time to even check who paid rent, and went I got back to the states he was 18 days past due.
I just sent him a simple text reminder. I was too tired. It was month #10.
I also sent him a non-renewal notice when the 1 year lease was up. That was being responded to REAL QUICK, along with the unpaid rent and late fees. LOL.
Occasionally I do have to listen to sob stories. I do listen, but I tell them I there is nothing I can do, it needs to be fairs for other who are paying on time, and I can't selectively enforce. I also let them know when they sign the lease paying rent is #1 priority and there WILL be a late fee after 5 days and eviction after 10 days. I also let them know that if they need me to provide a landlord reference in the future, how many times they are late and how many times eviction notices are served is an integral part of the reference.
It's tough being a landlord. You need an iron fists covered with kid's gloves.
- Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes8y
@Account Closed Without reading the comments, I know others have said it. Don't chase after the truth. Stick to your lease, if they don't pay on time, start the eviction process. This is a business.
Sure there are extreme circumstances, someone had a tenant with cancer they made a post for the other day, that was more of a "have a talk with them and try to figure something out" instance. But those situations aren't super common.
Bottom line...truth or lie....who cares, it changes nothing..
It does not make any difference whether a tenant is lying or telling the truth. Proper business practices dictate you issue a notice to pay. You could simply tell tenants your accountant or lawyer require you follow procedure. Of course you always charge late fees.
This of course applies to the first time a new tenant pays late or they are a long term tenant without a history of late payments.
A second late gets a notice and a warning that a third late will result in eviction or non renewal of their lease.
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes8y
The truth , lies or excuses dont matter . Rent is DUE on the FIRST , Late on the third . I am sorry your mother died , your brother got arrested , someone stole your purse , your car broke down , you lost your job , you broke up with your girlfriend , you are behind on your child support .
Pay the rent , or you will be homeless on TOP of all that .
- Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes8y
Like others, I was compassionate and empathetic early on. All I accomplished was teaching my residents that I was compassionate and empathetic. Also, If you do you own PM, an electronic collection tool is invaluable e.g. Cozy in providing fact based proof of payment (or lack of).
I self manage properties in C/C-/D+ neighborhood. I always hope I don't have to care why my tenants are late. When a tenant notifies me that they will be late. I respond as follows: (If notified before due date): Thank you for the heads up. How much can you pay on the first and when can you pay the rest?
This response says several things to my tenants:
1) I will not be rude to you (or be condescending or pry into your affairs, i.e. I don't care about the excuses).
2) I am willing to work with you
3) I expect you to pay something on the due date
4) I expect you to make a commitment for payment in full
Good tenants will ALWAYS have some sort of payment plan in mind. I like to get enough money up front to cover the "daily rent" until the balance can be paid. If they can't cover the daily rent then I use a quit and pay for CYA, I explain how it works, how much time it buys them, and the latest they can pay before an eviction is filed. I also give tenants a copy of our late policy each time they are late-- this policy clearly defines and prohibits habitual late payments. So far (2 years in) all tenants that have been late have managed to pay within my time requirements.
Another factor that's important to note is how strong or soft is the market? It's easier for a landlord to be strict and enforce late fees in a strong market without having vacancy ramifications.
I've offered the one free pass to tenants - of course - I tell them this is their one free pass. For me, it has worked. I'm also both fair and nice to my tenants and fix things on time and make upgrades to the property and I'm convinced tenants who are happy with a property will make every effort to pay on time (I'm also picky when it comes to accepting tenants and consider myself a good judge of character and I have a strong shady person-meter).
One tenant was late because she was in the hospital with birth complications - I was understanding of that. Things do happen. She even offered to give me her debit card and have me ATM the cash out as she wasn't allowed to leave the hospital.
My tenants call me and ask if I have openings on the regular - I take that as a compliment.
I am fair and always get the rent money - I wouldn't stand for not receiving it, of course.
Recently, another tenant was out of town with on the job training - he actually paid the late fee without me asking for it which was nice.
I only ever made one tenant pay the late fee (an inherited tenant) because he gave me excuse after excuse. They no longer live there (I didn't have to evict them, which is good).
- Investor · USA · Member since 2015 · 325 posts · 447 votes8yIt is just like every other interaction with people. If you feel like they are taking advantage of you JUST SAY SO! I also don’t think that being rigid with people works as well. Usually I am compassionate with people but make the comment “I am sorry to hear that _______ happened. I want to be helpful but I have to treat this like a business.” Then I tell them if it’s going to be late I need to charge a late fee. If I want them out I will tell them the same thing and say “I am sure you will pay me when you say but there are things that I have to do to protect my business”. Then I give them a 3 day. If it’s 1 day late I let it slide. If they tell me in advance (a week), I will work with them. If it’s the 1st of the month and they have an excuse I am pretty firm.
- Investor · New York, NY · Member since 2017 · 111 posts · 49 votes8y
Thank you guys, this is really great feedback. I have taken your advice to heart and issued a notice to this particular tenant. It is really quite liberating! I am relieved to move on to another tenant at last, and will reconsider my screening process.
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