Involved In Real Estate · Fort Worth, TX · Member since 2012 · 158 posts · 11 votes
I have had this couple always be on time for the past 6 months but I just received a text. I am not sure what to think about it because I really want to be strict about late rent and in the lease agreement says that late rent will be charged a fee per day. Here is the text
"Hey David i just want to give a heads up I'm going to be a few days late this month I will have rent on Tuesday sorry".
What should I do should?? thanks
Involved In Real Estate · Fort Worth, TX · Member since 2012 · 158 posts · 11 votes
13y
In my lease agreement says.
A. If not paid on the 1st, Rent shall be considered overdue and delinquent on the 2nd day of each calendar month. If Tenant fails to timely pay any month's rent, Tenant will pay Landlord a late charge of $25 + $5 per day until rent is paid in full. If Landlord receives the monthly rent by the 3rd day of the month, Landlord will waive the late charges for that month. Any waiver of late charges under this paragraph will not affect or diminish any other right or remedy Landlord may exercise for Tenant's failure to timely pay rent. If rent is not fully paid within the 4th day, an eviction notice will be placed on door. Neither ill health, loss of job, financial emergency, or other excuses will be accepted for late payment.
Investor · Los Angeles, CA · Member since 2013 · 42 posts · 22 votes
13y
Hey David,
I will answer your question this way.."Have you ever been late on a credit card payment and called the company asking to remove the late fee?"
I have tenants that pay me late here and there, but for the most part are timely. I understand we are in this business to make money, but without the cooperation of our tenants we would not be in business.
Another way to look at it is when you have an issue at your property and its an inconvenience for your tenant, they will be more willing to be patience with you because you in turn were patience with them in receiving the rent.
I know in my lease agreement, I give them a 5 day grace period to pay the rent after the 1st of the month and if they go past that, I charge a late, fee, every once in awhile I will waive the late fee, if its a special situation and they usually pay on time, but if you get that request a second time, then be sure to enforce that late fee. I hope that helped.
Involved In Real Estate · Fort Worth, TX · Member since 2012 · 158 posts · 11 votes
13y
Theodore B. you are completely right. I want to be a little lenient with them after all they have been great. I am just concerned of why they need until the 5th to gather the rent. Could they have lost their job? I don't want them to think by allowing this they will continue to do it. Also I want to do a walk through to inspect the property, per the agreement it says in 6 months into the lease and with 24 hour notice. Maybe its perfect timing to swing by and inspect.
Real Estate Investor · TX · Member since 2012 · 59 posts · 15 votes
13y
David A.
There a couple of ways to look at it. You do not want this to become an accepted princable, but there can be exceptions. From what you said, the way I would handle it would be to ask what the reason for being late is. The good news here is that the tenant is being proactive and speaking with you ahead of time. For that reason, I would allow it one time for a good reason.
My example is this. I had a tenant call me on the 6th. (the 5th is when I start with late fees) I was out of town, but had not yet recieved rent. She called me and said that her check (by mail) was returned to her and that she drove to my house because she did not wat it to be late. It may have been late by 1 day, but because she was proavtive and showed concern, I felt the right thing to do was waive the late fee. If this becomes a habit, I think fees are necesarry.
Investor · Los Angeles, CA · Member since 2013 · 42 posts · 22 votes
13y
Hey David, me again I saw your lease agreement statement, I understand that everyone has something different, I have included mine below as a suggestion. I read yours and you had a lot of information that I think the tenat could get lost in. I say keep it short and sweet. But hey just a suggestion.
"If the rent or any other charges are not received by the landlord on or before 5 days after the rent due date, tenant must pay a late fee of $50 in addition to the rent. If rent is not paid in full by the 6th day, eviction proceedings will begin.
Payments received by the landlord when there are arrearages, shall be credited first, meaning any outstanding balance, and then applied to the current amount due."
Real Estate Investor · TX · Member since 2012 · 59 posts · 15 votes
13y
text can be challenging to interpret, but i would basically say.
thanks for the heads up. what is the resaon for being late? we have a strict policy regarding timely payments. this is the 1st time this has come up, but cannot become a habit.
maybe i am not the best with words, but it sounds good to me.
Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
13y
I have found that it works better for me to have a more lenient grace period. I made an "administrative" change to my late fee policy when I converted my tenants to bank deposit. I made the grace period 5 days and charge on the 6th. This way they have absolutely no excuse to be late, whether it be holidays, bank holidays, February (short month), etc. The extra couple of days don't affect my bottom line.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
13y
If the tenant was proactive about being late, calling to explain and giving a specific date when it will be paid (and the date must be reasonable, not next month), I will forgive such lateness ONCE per year (but don't tell them that). And I explain that they should not make this a habit, as I will not be as forgiving should it happen again.
The reason for being late also has to be somewhat sensible. If it was because they just took a vacation, that won't cut it - late fee not forgiven. I've had that happen more than once, and I say it is up to them to get it in early if they will be away. The important thing is to not encourage bad behavior habits.
The other thing to keep in mind about onerous late fees. Once they dig themselves into a financial hole, those late fees accrue and never seem to go away. You can end up never getting on-time payment if they're struggling to keep up already.
But late fees are one of the ways that you can "collect more than 100% of scheduled rent" (as one of the gurus pronounces). So don't be too forgiving either :)
Washington, Washington D.C. · Member since 2012 · 66 posts · 15 votes
13y
One time I forgot to pay my rent on a $4,000/mo 3BR apartment, with a late fee of 10%. The building manager gave me a one-time waive policy, and I definitely held them in higher regard after doing that.
First off I would I would give him a call and discuss it on the phone. Texting is for talking to friends, not handling business matters. If it's his first time I would waive it, but let him know its a special scenario and you will only waive it "this one time."
I would take advantage of this opportunity to build some rapport with your tenant.
Real Estate Investor · Philadelphia, PA · Member since 2010 · 283 posts · 81 votes
13y
Just for record keeping, I ask all tenants to send me a letter, email or text if they are going to be late, a reason why and when they are going to pay.
I would take a screenshot of your phone screen if you can and keep it for your records.
Like all the other people said, have some leway espically if they have paid on time. After all they did notify you.
Involved In Real Estate · Fort Worth, TX · Member since 2012 · 158 posts · 11 votes
13y
Ok so he just called me. Unfortunately his wife left him and his work is holding some pay stubs for a few days. He had to pull some money out of his 401k. Also, he recently purchased a truck!! I'm not anyone to say how people should live their lives but I was thinking to myself what a bad decision. They are 20k in debt and bad credit doesn't make sense why someone would want to get deeper in debt instead of fixing the situation. I told him I appreciate him telling me and that they have been great tenants. I will do a walk through inspection on Sunday and try to get a better idea where he stands.
Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
13y
I always tell my tenants I understand things happen, and to text me when they've dropped the rent plus late fee off. I follow up by telling them I'd like to help them get back on track bc the late fee is a waste of money for them, and it'd be great if they could save that money in the future. It's not a lie--I hate enforcing the late fee to good tenants and I'd like for them to be successful and get their finances back in order... BTW, are you sure you can charge that much late fee, plus a per diem late fee? I'd double check your state law
Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
13y
Originally posted by David A.:
his work is holding some pay stubs for a few days.
This doesn't make sense. I don't need paystubs - I need paychecks. Are they holding his pay? Why? Sounds like a bad lie. What a coincident that all this has happened at the same time! It's like an iron clad argument of why he can't pay rent on time through no fault of is own! After that story, I'd probably charge the late fee....
Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
13y
FWIW, my tenant blamed his employer for not paying him on time when he was late on rent once. I told him that he could provide the reciept for the late fee to his boss to reimburse him. That's fair.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
13y
Rents on time or they pay the late fee. This is a big motivator for many folks. Get an agreement for a date when you can get the rent. If you don't get it, and he's still there, post your pay or quit notice. This drama is not your problem. Be sympathetic but be firm.