Investor · Pikesville, MD · Member since 2016 · 40 posts · 8 votes
My Tenant has been in the house over 10 months and she has been late about 3 times, she paid with late fee. The new story is "I had death in the family and I haven't been able to get to the bank I have to wait for a check to clear on tomorrow to cover the rent .Do you want me to send the $$$ amount (which is 3/4 of the total rent amount).I have today and the remainder in the morning or send the whole amount in the morning"
The lease is a year lease with 5% late fee of the 1st day of the month with 5 days gross period.She knows that I am serious for the late fee and I don't like playing around but I also want to treat my tenant professionally so If you were in my case do you take 3/4 of the rent today? and the remain tomorrow or all together tomorrow? If you accept 3/4 of the money today how much are going to charge for the late fee? is it 5% from the remaining 1/4 only or 5% from the whole rent? How do you begin your letter in the family death case while your gut and experience is telling you its made up case?
Share me your experience and your opinion in this case please, thanks.
Everyone has a story. Everyone has a reason. What is your goal: to be a profitable property manager, or to play judge and jury of which story/excuse is worthy and which is not? Let me give you an example. Would you waive late fees if tenant was in any one or more of the following circumstance:
1) Lost a job?
2) Bank messed up their account?
3) Kid was sick / injured / hospitalized?
4) Had an expensive car repair?
5) Tenant was sick and missed a week of work without pay?
6) Aunt died?
7) Parent died?
8) Child died?
9) Etc.
You see, the list quickly becomes ENDLESS. And you must individual judge each one as "worthy" or "not worthy." Ugh.
Land lords get into trouble when they do not follow their lease. If you choose to play Judge Judy (or Alex), then at least be sure to document the circumstance and why you made the exception. That way if somewhere down the road you DON'T make an exception for another tenant and they sue you for illegal discrimination, you at least have documentation to prove it wasn't due to that person being a member of a protected class. As for me, I charge every one. I recommend you do the same unless you want to encourage this tenant that it is okay to make their problems into your problems.
For the future, consider requiring ACH/auto-debit/Zelle or some other form of automated/electronic payment so "I couldn't get to the bank" is no longer a factor.
Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
6y
@Alex Get I have a couple suggestions. First, don't charge a percentage as a late fee because it becomes convoluted in situations like this on how much to charge when the tenant pays partial rent. Charge a flat amount for a late fee (i.e. $50) that's due in full in the event the tenant doesn't pay the full rent amount prior to the due date. (Note: Admittedly, this first suggestion won't help you with this tenant since you already have a lease with her, but it might help you in the future.)
Second, don't listen to, consider, or accept any excuses from tenants. All you should care about is whether rent is paid on time or not. Considering some excuses (death in the family) but not others (my child was sick this week so I missed a few days of work) is a recipe for disaster and a lot more work for you. Again, rent is either paid on time or it's not.
Honestly, that'll be easier for both you and the tenant to understand/follow and it'll likely be consistent with your lease, since I'm pretty sure your lease says rent needs to be paid by a certain date and doesn't have an exception for deaths in the family or other similar reasons.
As an added bonus, when the tenant sees you following your lease, they'll be more inclined to do it too.
Investor · Newtown Square, PA · Member since 2015 · 132 posts · 149 votes
6y
@Alex Get
This is how we handle late fees. If the full rent is not received by the 5th it’s an additional 5 percent on the TOTAL rent. We don’t care if you are $5.00 short, we still collect the full 5 percent. So will we accept a partial payment and then the balance? Yes, however they last payment must include the late fee.
Sometimes we will waive a late fee for a long time tenant that has never been late. This is just a business decision you have to make, however, to the person that had been late 3 times in the first 10 months we would not waive.
I have a heart and I am not a bad guy, however I do need to run a business and by the way, my bank doesn’t care the reason my mortgage payment is late, they will always charge additional fee.
Surveyor · Dothan, AL · Member since 2014 · 425 posts · 391 votes
6y
Alex
I believe I misinterpreted your reply to my comment, and responded with a terse remark. Please accept my apology. It is I who should pay more attention to what people type. Egg on face.
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
6y
Full payment the next AM with the late fee included or the eviction paperwork starts.... PERIOD.
Accepting partial payments makes the eviction process much harder since you agreed to it.....
The "death in the family" is likely total BS but even if it is, that's not my problem.....empathy but not sympathy.....there are dozens of ways to pay rent w/o going to the bank, so Venmo or Zelle me the $$
If this was a first time issue in a long term tenant, then I would cut her some slack..... but she's been late 3 times in 10 months........ her excuse is BS