Tenant always pays late, but not late enough....

93 Replies

I have a tenant in my first floor unit who has been late every single payment for 11 months in a row with every excuse in the book. However, they always end up paying right before the legal timeline for eviction. Does anyone have experience with this?

Easy answer here is to just not renew them when their lease is up. If they are paying, including the late fees, there's probably not a lot you can do beyond that.

@Colby Mulry I have no experience with this but I am sure others will ask similar questions about the situation. 

How late are we talking here 1 day or 7 days? 

Are you adding late fees each month? 

Are you serving them a late notice? 

Lastly how long is the lease? 

Might want to consider the option of not renewing it once its expired. Seems like a bad egg

In Rhode island, I issue a late statement after 5 days from the Rhode Island State handbook...if the tenant reaches 14 days I can evict. The tenant typically pays around day 10-12 with a late fee included. 

The lease is up in December (1 year)

Biggest problem is the waste of your time and having to listen to all the stupid excuses. Otherwise, you are making $ on the late fees at least. You can either put up with the aggravation and make a bit more $, or not renew. 

@Colby Mulry I'm with @JD Martin , just evict them after their lease expires and find someone who'll pay you on time. Also, you should consider increasing your late fee (make sure to keep it to an amount allowed by your state) so that tenants are more likely to pay on-time to avoid it.

Professional tenants know the laws better than anyone.  I suggest you get rid of this person when the lease is up.  Be sure to follow all the procedure, notices etc... Even when a lease is up it still requires a bit of work and follow up to get them out.  Be sure to use a lawyer, it's worth having a 3rd party involved that knows the law and can verify dates & communications. 

Get rid of him by not renewing his lease. No one needs tenants that do not respect their landlord and continually lie to them. Rent is due by midnight on the 1st. Landlords believing it is a benefit to collect late fees generally operate a mom and pop slip shod business that ultimately will come back to bite them. Good tenants are not born they are trained by professional landlords.

Find a new tenant and teach them from day one that following the lease to the letter is essential if they wish to stay. Start them out on a M2M lease so you can easily get rid of them if necessary.

@Colby Mulry does it really matter? You are getting your money by the 11th and extra money, via late fee for your trouble. Eviction will cost you a bunch of money, so that makes no sense unless the tenant is otherwise causing trouble or damaging your property. I would wait until the end of his lease and give him a healthy rent increase to encourage him to move on his own. If he stays, you get more money. 

Tenants that live paycheck to paycheck generally never move. They have no money to move, so even if you decide to not-renew, be prepared to evict. You need to decide what the best business decision is. Most businesses will just collect late fees on bills and as long as they get their payment, they will never shut off services.

Im with @Joe Splitrock here....does it matter? The rent gets paid consistently every month but a little late, and with the late fee included.  I wouldnt even bother conversing to hear the excuses, Id just keep collecting my rent. I have 1 tenant that has been late every month for 7 years.  Sometimes they can get pretty far behind...but always end up catching up.  I will take late but consistent any day over the ones that are non paying that will eventually need to be evicted. 

Remember, even with A class rentals, you are in a business of providing a service to a population that largely is irresponsible enough that they can not buy their home home.  Youve got to let some of these things roll off you, or you going to just give yourself more stress than what it's worth.

Late fees are just extra income. See it as 11 days interest....easy money...

if they start up with other issues address the whole situation right away.  Maybe after initial lease is up go month to month, then the power goes back in your favor a bit more.

@Colby Mulry . Yes I am currently experiencing this now. I am in the process of sending a letter for them to vacate the property because their lease expired. The reason is: I am a busy professional, not a debt collector. You want to enjoy making money, not begging for it. You will find someone else who can affor your rent.

@Colby Mulry don't renew their lease. It will be hard to evict in the dead of winter so I would let them go month to month until around January/ February then evict or give a 30 days notice to vacate. This is one of the main reasons why I love to fill my apartments in Spring/Summer because come winter you are not getting the "cream of the crop" in your tenant applicant pool.. most tenants do not like to move in the dead of winter or after school has started for their children... Just an FYI 

@Colby Mulry This is why I charge a 5% late fee on the 2nd ($60) and then $20 per day for every day after it's late, until it's paid. I get paid via ACH through Cozy (cozy.co), so it takes 5 days to get to me, but as long as the payment is made and being processed by the 1st, I dont charge them. Not sure your local laws on rent late fees, but where I live has no statute for late fees. Lanlordology website has rent laws by state. Hope that helps. Treat your business like a business. This is also why I dont rent to friends and family.
@Colby Mulry Also, did you screen the tenant at all? Credit and background check will tell you a lot. I also have tenants pay for that via Cozy. It costs them $39 per person for credit and background check.

@Colby Mulry Try doing semi-monthly payments if you're concerned.  If they're paycheck-to-paycheck, then take a little from each paycheck.  That way if they bail you're not out the full month.  However, if they're constantly paying on time then just sit back and earn that little extra.  If you're worried they'll bail, stay on them until their lease is up.

I have one tenant that pays late every month, two installments. Tenant increased their own rent $50/Month to compensate for late fee... I get an extra $600/year and the tenant has never missed a month, never complains and is a great tenant IMO. The unit is already at max market rent. If the tenant goes...I lose money. I make at least an extra $1000/year in late fees from tenants. My PM and I are both happy with that. Turning over an apartment, painting, screening and vacancy cost WAY more time and ultimately money. If the tenant is a model tenant and it never goes into the next month, I'd keep them.

Re-sign this tenant, but change your lease terms. Remove the late fee , but raise the rent and add a huge discount for paying rent early (say $200) If they want to keep paying late, they don't get their discount, they pay late and it's less aggravating.

Disclosure :  I'm not a lawyer, this may not fly.

Originally posted by @Kyle Schlosser :
@Colby Mulry If they pay just a bit late...but with the late fees...might it make financial sense to keep them, because in theory, the rent payment is just moved back (but total payment increased)? I realize I’m looking at it oddly...

 this is exactly what I thought as well. Not the only one! But people like this can be a huge hassle outside of just paying late I suppose, so that might weigh in favor of getting rid of them. 

We have the same situation. Tenant is young professional, Late on payment almost every month. But submit with late payment fee, usually before 10th. The reason why we don’t kick the tenant out is: most likely I will lose 1mo of rent and we’ll have to invest some money in order to make it ready for the next tenant like fresh paint and other little things. Not to mention showing to bunch of people before finding the right tenant.

So if it not critical to your budget just keep the tenant. I get around$300- $400 extra per year. Yes, that means Every month on 5th I send a txt to my tenant with a friendly payment reminder.

@Colby Mulry

I checked online and discovered there is no limit to late fee in Rhode Island.  Check your lease to make sure there is not a maximum late fee.  Start charging 8% or 10% immediately for every late fee.  In Minnesota, I charge 8% after midnight the first, no exceptions, no matter how much I like the tenant.

Also, don't do written checks, if at all possible.  Two of my tenants don't even have checking accounts, yet they pay every month at Cozy.  Hearing their excuse is a waste of your mental faculties.  Just follow procedure.  Hit them with the late fee, and make it sting.  Send the late notice letter the day after it is late.  Call around to find out eviction costs, and communicate the costs to him/her for the eviction if it comes to that.

On the bright side, you have a paying tenant who at least pays every month, and if they don't mind paying an extra 10%, and they take care of your place, maybe you just decide what your tolerance is, and go with what you think is best.

Lastly, if it ever comes to eviction, it is not as bad as people make it sound.  Find a company to do it...ask property management companies who they use, or other investors.  Very likely, someone has a contact where the lawyer or company does all the hard stuff of the eviction.  If they do damage, it's part of the dance.

Also, consider cash for keys, if you want them out. First offer I give is I will refund their damage deposit the day of the walk thru, minus any costs I estimate on my final walk through. They get a check, you get the keys.