What to do with new tenant who submits rent past agreed due date?

35 Replies

I have a new tenant of two months and as of now has submitted rent payment past the due date of the 1st of the month but, prior to the official "late date" of the 5th.  We're definitely not off to a good start but, I do understand that getting settled in can take more time for some more so than others.

Can anyone share their thoughts on how to best deal with this?

If they're submitting before your official late date, nothing for you to do.

Once they submit it past the 5th, you can set the precedent to them that it's unacceptable by taping a pay or quit notice on the front door on the 6th.

This is usually the first step in eviction proceedings and is enough to get most tenants to get right.

You take the payments and demand the late fee to be included. Use the late fee as an added income stream.

@Mark Belenky

I was a good tenant in my apartment by all standards except I always paid on the 5th because I didn’t understand that just because I wasn’t “late” didn’t mean I wasn’t late. Maybe I am naive, but I honestly think some tenants don’t understand that the due date is the first and anything after that is late even if they don’t have to pay a late fee. I just didn’t think it was a big deal.

But it also could be someone who might end up being bad. Not sure! Just my personal experience.

@Mark Belenky As others have said, legally there is nothing you can do. This is more common for tenants to do than to pay on the due date. If your people are just delaying paying because they can than you won’t have an issue. If they are scraping together every last dime every month and that’s why they are paying late than eventually the wheels will come off. 

You won’t know which until it happens which is why you want to be on top of serving the notice so you can go forward with an eviction if they don’t pay by the notice date. 

@Mark Belenky I tell my tenants the rent is late after the 5th. My tenants who occasionally pay it late know to send me a text letting me know when it will be in my account and they also know to include the late fee. Don’t sweat the small stuff.

Though my mortgage is due on the 1st, I never pay it before the 15th. On the 16th it’s late. Why give the bank my money for a few extra days?

I’m sure the tenant has the same idea. And unless it’s written into the lease that it’s late on the 2nd, I don’t know why they have to pay on the 1st.

I'm getting the sense that this is something to expect but, to have measures in place to sway the tenant from abusing their tenancy.  I appreciate all the feedback everyone. 

Thank you.

@Russel Brazil - I think I've been extremely fortunate the past three years with an amazing tenant who month after month paid her rent on the first without a miss.  So, I figured I'd reach out to the community to hear some good advice from their experiences.

Thank you for your feedback.

Russell Brazil

@Mark Belenky

Next time make the late date be the 2nd. Or keep cashing the rent on the 5th. I suppose you could ask them why they are always late. Maybe they get paid once a month on the 4th. That actually happened to me for a tenant. So we moved their due date to the 5th with late fees starting on the 6th. It relieved their stress of paying on the 1st.

@Mike McCarthy your mortgage works with compounding interest, paying early cuts into the interest due. It is completely different than paying someone when there are no penalties or interest tied to the payment as long as it is in before a certain deadline. The best analogy would be paying taxes. When the IRS wants it is irrelevant, if the 15th lands on a Saturday and Monday is a holiday and I get until 9pm on Tuesday to get it stamped at the post office, that's when I'm I'll be in line to send them my check

Originally posted by @Bryan Devitt :

@Mike McCarthy your mortgage works with compounding interest, paying early cuts into the interest due. It is completely different than paying someone when there are no penalties or interest tied to the payment as long as it is in before a certain deadline. The best analogy would be paying taxes. When the IRS wants it is irrelevant, if the 15th lands on a Saturday and Monday is a holiday and I get until 9pm on Tuesday to get it stamped at the post office, that's when I'm I'll be in line to send them my check

Mortgages are simple interest, not compound.

I set my due date = late date = 1st of the month so there is no grace period.  This made life easier for me as everyone knows when the 1st is coming.  It works fine to be any date if the 1st of the month doesn't work.

Setting a trailing late date often gets interpreted as the late date is the real due date, as mentioned above.  Don't be surprised to hear your tenants say they were only a day late when they paid on the 6th and your late fee started the 5th.

I don't have a late date on my leases.  Its due on close of business 1st of month.  Also, I have a bank account for my rental properties.  I give the tenant my bank account number, they deposit it and send me a text that they did and amount.  I confirm it.  If they are late I charge $50. $25 a day after the 5th.  So far Its been great.  It works for me because I'm small scale.  I only have 6 rental units.  I wont be able to do this as I scale up.

Here's a suggestion... explain in all new leases that any payments received after the due date = you're officially late, and goes on the record that way (for future landlords/lenders).  And any payments received after the "grace period" (I think 3 days is better than 5) you assess a late fee and possibly a Pay or Quit notice.  

Originally posted by @Mark Belenky :

I have a new tenant of two months and as of now has submitted rent payment past the due date of the 1st of the month but, prior to the official "late date" of the 5th.  We're definitely not off to a good start but, I do understand that getting settled in can take more time for some more so than others.

Can anyone share their thoughts on how to best deal with this?

 My husband and I set things up for the tenants to succeed.  So we allow them to pick their due date when they sign the lease. We have found that the late ones are almost always because of their pay date. So we tell them if they change jobs or they need a different due date, tell us. 

@Dominik Makaneole

I like your method. It works for you. I just want to remind everybody that late fees may be governed by their municipality. Iowa allows $20 per day up to $100 per month. As it’s been said a million times in BP forums, know your Landlord-Tenant laws where you own.