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

Real Estate Broker · Salem, MA · Member since 2015 · 16 posts · 9 votes

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?

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

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.

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Joshua S.
Rental Property Investor · Chesapeake, VA · Member since 2017 · 100 posts · 75 votes
8y
Originally posted by @Brian S.:
@Joshua Saunders thanks for sharing! I just started using cozy but my tenants haven’t taken advantage of ACH payments.
I put it in my lease that it's required that they agree to use it. May be a good idea for future tenants. This is from my lease, of course, I'm not a lawyer and you'll want to check local laws in your area to see what you can and can't do in your lease:
"The Tenant(s) will pay the Rent on or before the FIRST (1st) of each and every month of the term of this Lease to the Landlord. The Landlord requires that rent installments be paid through COZY SERVICES (https://cozy.co) – a secure payment processing website approved by the Landlord. The Landlord reserves the right to discontinue this online rent payment service and require at any time that Tenant(s) pay all rent and other sums by certified check, money order, personal check, or other methods deemed appropriate by the landlord, following the same schedule and due dates. No personal check from a person who is not a Tenant or approved occupant will be accepted."
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Joshua S.
Rental Property Investor · Chesapeake, VA · Member since 2017 · 100 posts · 75 votes
8y
Originally posted by @Peter Stewart:

I had the same thing happen. For 10 months straight rent was 1-2 weeks late. Often paid in 2 installments. Drove me nuts, but, at the end of the month, the money was there, so I let it ride...UNTIL, they stopped paying. So, I evicted them and won a damages hearing for back rent, back late fees, and damages (they left the unit trashed).
So, I agree with everyone else on here - don't renew them when the lease is up. The bad behavior on payment will most likely only get worse. Give them an inch they take a mile.
Yep, that's why I charge a hefty up front late fee as well as a daily late fee. So the longer it's late, the more they owe me. What kind of screening did you use?
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Jordan Knoll
Real Estate Agent · Grand Rapids, MI · Member since 2016 · 23 posts · 11 votes
8y
I would definitely use this as a learning experience to improve your lease as much as possible, making sure the late fees are iron clad and communication is clear on late payment of rent. I also agree with everyone else on this thread about not renewing this person's lease. I charge late fees after day one and my property management software even auto-charges the fees when tenants are late on rent, so no excuses ever cross my path! Good luck on this and don't let one headache tenant discourage you!
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Account Closed
Specialist · MI · Member since 2013 · 30 posts · 7 votes
8y
Why do you care? I buy lots of dflt notes with rolling 90s and 120s but they pay. With the late fee they pay more. Late or not I still get it. Predicated on your bldg location and condition maybe this isn't such a bad thing. You could evict, re-rent and find the new tenant has a meth lab. Take the rolling lates with the late fee and focus on improvements that'll demand higher rents in the future.
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Peter StewartBusiness Member
Real Estate Broker · Indianapolis, IN · Member since 2018 · 160 posts · 168 votes
8y
@Joshua S. for this particular tenant I made a HUGE error and didn't screen them. Long story short they were a friend of a friend, and that friend vouched for them. I went against my gut and rented to him without doing any screening. Never, ever, ever, will happen again.
I typically use MySmartMove through Transunion for screening.
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Jay G.
CA · Member since 2014 · 152 posts · 65 votes
8y
Originally posted by @Colby Mulry:

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)
As others said, don't renew contract OR
- Set maximum allowed security deposit for next period (if didn't before)
- Set maximum rent increase allowed by your agreement, law (http://webserver.rilin.state.ri.us/Statutes/title3...) and market
- Set late fee to max allowed by law (which... verify for yourself, but no statute in RI?)
https://www.ezlandlordforms.com/articles/landlord-...
I'm thinking a $200 late fee would probably nip that problem in the bud :)
And if not, you'll be compensated for the couple of extra hours each month you have chase the rent down.
Just explain reason for lease change/late fee increase is that you make $200/hr and have no other tenants that are consistently late like them, requiring this extra 1-2 hours of administrative work on your part. "No hard feelings, I don't want you to have to pay me late fees - but I must reclaim my time." etc. also might want to explain the importance of a good/positive rental reference if they intend to keep renting from others.
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Nicholas Weckstein
Real Estate Agent · Warrior Run, PA · Member since 2016 · 341 posts · 146 votes
8y
@Colby Mulry I have the same scenario currently. Tenant always pays late. And always pays a late fee. I know it’s a business and we are supposed to be very factual and by the book. But here’s what I realized. THIS TENANT ALWAYS PAYS. Yep it’s a bit late. As punishment I impose a late fee. If she wants to pay that? Okay more money for me. Think of it like this. If you have to eveict her, clean up the unit and RE rent it. Your talking about a minimum of 2 months down time if your lucky. By the time u file for eviction. Then she appeals to buy time. And all of that great stuff. Your out 2 or more months rent all bc she paid a bit late BUT ALWAYS Paid. This tenant I have, never once paid online in the 15 months she’s been here. So 14, 35$ late fees I’ve collected. Here’s my advice. As long as she pays and it’s not like 3 weeks late every month. Just find a way to deal but still let her know it’s un acceptable. And charge late fees. Also do not accept partial payment ever. Only in full. People are different. And not everyone is going to be punctual and clean. Certain battles are worth fighting. Others aren’t.
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Bola A.
Rental Property Investor · Houston, TX · Member since 2014 · 146 posts · 35 votes
8y
@Colby Mulry My story is exactly the same, always pay late, you have to discern if they are playing you or things are just tight. mine always pay the late fees with sincere apology.
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Joe Arida
Rental Property Investor · Fitchburg, WI · Member since 2016 · 91 posts · 60 votes
8y
@Colby Mulry do you do a DAILY late fee? E.g., $40 first day then an extra 10 or 20 for each say after that? Maybe that would get them paying so they don't have a $150 fee every month
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Ned J.Pro Member
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
8y
If they are a "model tenant" in every other way (no issues, take great care of property etc), this is what I would do....
At the end of their lease...
Increase the rent to market rate if indicated
Increase your late fee to the max allowable in your state
Make it month to month......
Best compromise to taking the risk and cost of eviction and turnover and still be able to quickly change your mind when you get tired of this BS
Personal decision......is the stress and hassle of dealing with this each month......and the risk that they will burn you for more $$ down the road......worth the extra $$ to you?
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Gilbert Dominguez
Investor · Detroit, MI · Member since 2016 · 211 posts · 144 votes
8y
As long as they do pay every month there does not appear to be a problem of them not paying their rent. I do not believe in being a hard ***. I try my best to work with every tenent's situation. Have a talk with them I am sure they are not all that happy about paying an extra late charge. I would simply change their payment date provide no more late fees and have them sign an addendum to their lease that if they pay late more than 3 times they are out, will accept eviction for your good will, at least talk this over with your attorney and see what they say. Sometime people just have some kind of a hang up in their personality and there is nothing you can do about that.
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Steven Stohlman
Investor · Cleveland, OH · Member since 2017 · 29 posts · 25 votes
8y
@Joshua Saunders I use cozy too and I love it! My daily late fee is $10.00 I may need to up that a bit after seeing you are at $20!
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Rachel H.
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
8y
@Colby Mulry If they pay late and bring it current every month, you'll just need to keep going through the process. As
@JD Martin said, you can choose not to renew these tenants when the lease runs out. Good luck!
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Alyssa Hammond
Timonium, MD · Member since 2018 · 14 posts · 6 votes
8y
@Thomas S. this is a very interesting point! How do you convince them to sign a year lease after allowing them to go M2M
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Keisha Swanson
Member since 2018 · 5 posts · 0 votes
8y
@Colby Mulry how much is the late fee? Seems like your making out good lol. Around my area people don’t pay at all then squat
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Eric Wong
Torrance, CA · Member since 2018 · 11 posts · 2 votes
8y
I had tenants that I inherited when I purchased my first duplex that were in this exact situation. In my situation it never got better, and they eventually fell as far behind as a month on payment. Since they were month to month, I ended up terminating their lease, and gave them 60 days to move out (because they had lived there for more than 1 year). It was the best decision I could have made, and wish I had made it sooner. Since I have had great tenants who pay on time and care far better for the property (I attribute this to vetting my applicants till I found quality renters).
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Brandon Ingegneri
Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
8y
I own a bunch of these things in RI, and my personal opinion takes into account a few factors. How are they maintaining the unit? Are they respectful of the property and neighbors, or do they live like animals? If they are sound tenants but consistently pay in the late but not too late window, and they regularly pay the late fees, I would let it ride so long as the late fees are ample enough to make it worth while.
If they are shi* head tenants, the notice of termination of tenancy would have been ready to go the second month in a row that they were that late.
If people have an unforeseen circumstance that they communicate with you about that temporarily jumbles things up, that is one thing. If they are leaving you in the dark and consistently pay late and aren't the best overall tenants, show them the door.
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