How are you handling non-paying Tenants?
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
The DIY Landlord Book4.7247 Reviews
How are you handling non-paying Tenants?
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Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
5yTermination of m2m agreements, inspections, compliance as to house rules, vehicles, animals, guests, large friends checking in, cash for keys if needed.
Don't have to just sit and take it if they're taking advantage. Lots of reasons other than non-payment of rent.
31 Replies
- Investor · Columbus, MT · Member since 2013 · 1k+ posts · 1k+ votes5y
Your making me a bit nervous here... your supposed to be the one with the answers, not the questions.
It’s so sad to think that we are at this point as a country that we have no recourse against entitled people during theses difficult times. I wish I had answers for you. So far we have had everyone pay though this whole thing, as our area has had hardly any impact from shutdowns and job loss (as far as I can tell).
I sorta assumed it was that way in all rural areas across the country other than tourist destinations.Do you think realeste will change if these things become permanent?
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes5y
Originally posted by @Joshua D.:
Your making me a bit nervous here... your supposed to be the one with the answers, not the questions.
It’s so sad to think that we are at this point as a country that we have no recourse against entitled people during theses difficult times. I wish I had answers for you. So far we have had everyone pay though this whole thing, as our area has had hardly any impact from shutdowns and job loss (as far as I can tell).
I sorta assumed it was that way in all rural areas across the country other than tourist destinations.Do you think real estate will change if these things become permanent?
I can assure you, I have had some tenants attempt to take advantage of the situation but we dealt with them before it went too far. I'm just starting a conversation to see how others are handling it.
There is a growing trend across our nation that coddles renters. Let's not forget SEATTLE BANNED WINTER EVICTIONS before COVID was ever on the scene. The more liberal cities are already creating laws that favor tenants that misbehave and make it more difficult for mom-and-pop investors to survive. Do I think the eviction moratorium will be permanent? No. But I think it will have a ripple effect that will be permanent. Politicians are seeing they can create these ridiculous rules and nobody stops them. So I expect we'll see more policies created over the next few years that continue to take away private property rights.The DIY Landlord Book4.7247 Reviews - Investor · Columbus, MT · Member since 2013 · 1k+ posts · 1k+ votes5y
@Nathan G.
I just saw that you manage over 400 units. holy smokes! Of course your gonna get a few bad ones with that many. Ide love to talk with you about this and figure out how you grew.
Feel kinda stuck here at 15 you units and wanna break into comercial or business related stuff.
Can I take you to lunch sometime this week? I'll pm ya.
- 5yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
@Nathan Gesner You have great definitions of the good vs bad renters. As you said communication is king!
I have only had one that has been struggling, but they are good at finding the free rental assistance places and their rent is current as of right now.
They are over communicators, drives me crazy. I generally force them into texting. I'd be happy to be able to get rid of them as they bother another tenant of mine in the house next door.
They have been managing to keep the rent paid and keep the house in relatively good condition so I have been tolerating them, for now.
So what did this involve? "we dealt with them before it went too far"
- 5yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Did the new covid benefits not have something about landlords being able to apply for back rent? Surely there is something in there that if the tenants refuse to sign the paperwork (which costs them nothing, that you can get rid of them.
I'm in Canada where the rules are different. I agree that communication is key. We had one tenant who we evicted as soon as we could as they weren't paying the rent and refused to talk to us...and yes they were getting benefits and decided to spend it on take out and alcohol instead of groceries and rent.
- Knoxville, TN · Member since 2019 · 111 posts · 57 votes5y
Originally posted by @Theresa Harris:
Did the new covid benefits not have something about landlords being able to apply for back rent? Surely there is something in there that if the tenants refuse to sign the paperwork (which costs them nothing, that you can get rid of them.
I'm in Canada where the rules are different.
The very latest bill has some rent relief money. It is the first one that has - so far, there has been no extra money funding that landlords qualified for (the exception being those large enough to have employees or run as a C Corp for pay/tax purposes (even if an LLC or S-Corp), so that they have at least one employee (themselves) to apply for a PPP loan. Note that sole proprietor and partership/LLC landlords could not legally apply for those PPP dollars. Some charities have increased outreach $$ and our state moved some of the state designated money to the cities and our city moved some of that $$ to increase rent relief payments. That was not required or done in many areas - such as our County, which has no relief money available (I have properties in both city and county). It is still unclear how the rent relief money will be distributed and what programs tenants will have to apply for in order to receive it (If they dump it into S8, that will help that program, but not the average tenant behind on their rent).
- Rental Property Investor · Laurel, MD · Member since 2016 · 383 posts · 382 votes5y
@Nathan G. Great question. So far all tenants have been paying their rent.
The good ones we'll work with. The bad ones we'll evict by Non-renewal of lease. We won't bring up any payment issues.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes5y
Termination of m2m agreements, inspections, compliance as to house rules, vehicles, animals, guests, large friends checking in, cash for keys if needed.
Don't have to just sit and take it if they're taking advantage. Lots of reasons other than non-payment of rent.
- Burnaby, BC · Member since 2017 · 283 posts · 268 votes5y
Always try to communicate and compromise with the tenants especially the ones who are capable of paying. In Canada, it could be part of educating the tenants to collect the rent subsidy from the gov't; I had one tenant who wasn't aware she could have applied and received $500 towards rent during the time her partner was still paying rent but she lost her job due to covid.
They're still on hook for the rent eventually so I'd threaten that legal action will commence once the eviction moratorium is lifted so they better have the money ready then or they'll go into collections. Until then, unfortunately I think it's a time where you have to be a bit nicer to tenants especially the ones who may try to game the system as there is really no teeth in the current laws until the bans are lifted.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes5y
I wouldn't be surprised if we see rent forgiveness pushed once COVID dies down. I just can't see government allowing a bunch of evictions and collections.
The DIY Landlord Book4.7247 Reviews - Member since 2020 · 339 posts · 356 votes5y
I’ve evicted severalPeople this last year . If they don’t pay I’ll find a way to get them out . I do only month to month leases for starters and my lease is so outrageous and long that I can pretty much evict anytime I choose under a host of different violations aside from money , also you can still evict , I don’t know why folks think you can’t ?? They have to prove it’s Covid related and that they attempted to get funding help which they never do . Not a big deal after you’ve done this a few times in court
- Member since 2021 · 23 posts · 4 votes5y
Forceful reminders isn't scaring my tenant. I've reminded them multiple times that I can go to small claims court/collections. I am going to try some of @Steve Vaughan 's pressure tactics next.
I'll admit I am very worried about what else the govmint can come up with. If I do get my SFH back, I'll be converting it to an airbnb as I am sure many other landlords here will do. Let CA deal with the mess they created.
- Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes5y
Originally posted by @Dennis Wayne:
I’ve evicted severalPeople this last year . If they don’t pay I’ll find a way to get them out . I do only month to month leases for starters and my lease is so outrageous and long that I can pretty much evict anytime I choose under a host of different violations aside from money , also you can still evict , I don’t know why folks think you can’t ?? They have to prove it’s Covid related and that they attempted to get funding help which they never do . Not a big deal after you’ve done this a few times in court
In many locations the courts are closed except for emergencies, and that is like an immediate restraining order, even murder trials are on hold.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes5y
As far as I know you just can't evict for non-payment of rent. Holding over is different but I'm no legal pro. I would at least give notice of termination.
I don't offer more than m2m at all anymore unless in one of my small sec8 apts. HUD requires a 1 year lease in the beginning.
- Member since 2020 · 339 posts · 356 votes5y
That is real shame if your area does not even hear court cases ,that’s one of the big drawbacks to buying in “hot markets “ for me . they are almost always ran by insane liberal lunatics that favor tenants .
- Rental Property Investor · Richmond, VA · Member since 2015 · 128 posts · 25 votes5y
@Dennis Wayne it is ridiculous. We have a tenant who stopped paying before covid because her roommate skipped out and she had lied about her own income. We started eviction proceedings before covid but covid hit and pushed our court date back three times. We finally got the judgment in October but apparently the judges just aren't processing writs of eviction here in Richmond, Virginia. At all.
If I would have foreseen this, by one month, I would not have started eviction proceedings because she probably would have been more willing to work with us on getting state-funded rent relief.
- Member since 2020 · 339 posts · 356 votes5y
@Matthew Maggy
I am
Not an advocate for cash for keys in fact I hate the idea however your goal as a business owner is maximum profit for yourself and scare holders so there’s times you must swallow your pride and remember your mission even if it means giving them 1000 bucks
- 5yJennifer T.Pro MemberInvestor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
I've had an issue with one tenant not paying their full rent and one tenant who has been in arrears for about half their rent.
The first tenant told me in May that she didn't have the rent money and didn't know when she would have any money, because she had lost her job. Previous to that, she had always paid her rent though usually a few days late. But she was a terrible tenant otherwise and was already under a Cure or Quit notice for constant, excessive noise. She seemed to have the attitude that she didn't need to pay her rent at all, because it was COVID. I corrected that thinking and told her she needed to pay rent to continue living in the house, but we could work out a payment plan. Then I started asking her questions she really didn't want to answer because they revealed her lies. Like, "When did you file for unemployment?" Oh? You haven't filed for unemployment yet? Why?" Long story short, she finally said, "Since you aren't being understanding about COVID, I will have the rent on Monday (this conversation was on a Friday)." And she did. So glad her Rent Fairy Godmother visited over the weekend. I was pretty sure she had not lost her job and knew for a fact that her live-in b/f had not.
They paid June's rent without a hitch. But then didn't have July's rent. I ''sort of" made a cash for keys agreement, where I agreed to return up to $700 of their security deposit (total had been $1,200) if they were out by July 8th, returned the place clean and with no belongings, and there weren't any medium/major repair issues. They met the first two conditions, but there was substantial enough damage I didn't return any of their SD. But also did not go after them for the damage that exceeded the SD, which had also been part of that move-out agreement.
The other tenant has been my tenant for about 5 years and has always been a marginal one. She was running a little short on her rent for most of the year (not COVID related). But then things took a turn for the worse in October when her adult daughter (also a tenant in that home) was supposedly hospitalized for COVID and was out of work for a couple months. Except the daughter said in my presence, not to me but to one of her friends, that she was lucky she'd only had mild symptoms. Hilarious. This tenant usually ignores me, until I post a 5 Day Pay or Quit notice. So that is what we have continually been doing so she doesn't fall further behind. She does keep paying, but is making no progress on the $475 (total rent is $1100/month) she has owed me for a few months. Normally I wouldn't be this "understanding", but I feel between a rock and a hard place. Eviction courts are open here but, if I file for an eviction, I won't see another dime and it could take much longer than usual because of backlogs. Plus, I could see judges being more lenient right now.
I wish I had the perfect answer! The best tactic I use is being sympathetic with their plight, but they will be far better off if we work out a moving-out plan, which will not come up as an eviction on their record. And that I think an eviction history will carry even more weight and much fewer rental opportunities in the future, than it already does.
- Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes5y
Originally posted by @Jennifer T.:
I've had an issue with one tenant not paying their full rent and one tenant who has been in arrears for about half their rent.
The first tenant told me in May that she didn't have the rent money and didn't know when she would have any money, because she had lost her job. Previous to that, she had always paid her rent though usually a few days late. But she was a terrible tenant otherwise and was already under a Cure or Quit notice for constant, excessive noise. She seemed to have the attitude that she didn't need to pay her rent at all, because it was COVID. I corrected that thinking and told her she needed to pay rent to continue living in the house, but we could work out a payment plan. Then I started asking her questions she really didn't want to answer because they revealed her lies. Like, "When did you file for unemployment?" Oh? You haven't filed for unemployment yet? Why?" Long story short, she finally said, "Since you aren't being understanding about COVID, I will have the rent on Monday (this conversation was on a Friday)." And she did. So glad her Rent Fairy Godmother visited over the weekend. I was pretty sure she had not lost her job and knew for a fact that her live-in b/f had not.
They paid June's rent without a hitch. But then didn't have July's rent. I ''sort of" made a cash for keys agreement, where I agreed to return up to $700 of their security deposit (total had been $1,200) if they were out by July 8th, returned the place clean and with no belongings, and there weren't any medium/major repair issues. They met the first two conditions, but there was substantial enough damage I didn't return any of their SD. But also did not go after them for the damage that exceeded the SD, which had also been part of that move-out agreement.
The other tenant has been my tenant for about 5 years and has always been a marginal one. She was running a little short on her rent for most of the year (not COVID related). But then things took a turn for the worse in October when her adult daughter (also a tenant in that home) was supposedly hospitalized for COVID and was out of work for a couple months. Except the daughter said in my presence, not to me but to one of her friends, that she was lucky she'd only had mild symptoms. Hilarious. This tenant usually ignores me, until I post a 5 Day Pay or Quit notice. So that is what we have continually been doing so she doesn't fall further behind. She does keep paying, but is making no progress on the $475 (total rent is $1100/month) she has owed me for a few months. Normally I wouldn't be this "understanding", but I feel between a rock and a hard place. Eviction courts are open here but, if I file for an eviction, I won't see another dime and it could take much longer than usual because of backlogs. Plus, I could see judges being more lenient right now.
I wish I had the perfect answer! The best tactic I use is being sympathetic with their plight, but they will be far better off if we work out a moving-out plan, which will not come up as an eviction on their record. And that I think an eviction history will carry even more weight and much fewer rental opportunities in the future, than it already does.
As a landlord, we get the see the best and worst in people.
We've been explaining to tenants in a very empathetic way that the banks are still very much open and they are expecting their mortgage payments every month!
- Oakland, CA · Member since 2020 · 28 posts · 16 votes5y
@Nathan Gesner we've had success with landlords and PMs setting up online installment plans for missed rent.
This works if your tenants are interested in working with you towards repaying their debt.
Unfortunately I agree that we've seen lack of empathy on both sides, but that's not so say that there aren't good examples of both sides (tenants and landlords) working together. - Member since 2021 · 23 posts · 4 votes5y
I was at the rental earlier this week and the tenant let me fix something in the garage. I noticed that they'd modified the garage (sheetrock and paint) to make it habitable without informing me. I have pictures.
I then gave the tenant 72 hours notice to inspect (used the standard CA form). The tenant texted me back saying they are worried they have COVID and would like me to cancel my inspection until they get results. My lease has a right to inspect clause.
What are my options? I am not finding any COVID declaration that prohibits me from entering.
Would love to hear your thoughts @Nathan Gesner or @Steve Vaughan
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes5y
Originally posted by @Ming Wan:
I was at the rental earlier this week and the tenant let me fix something in the garage. I noticed that they'd modified the garage (sheetrock and paint) to make it habitable without informing me. I have pictures.
I then gave the tenant 72 hours notice to inspect (used the standard CA form). The tenant texted me back saying they are worried they have COVID and would like me to cancel my inspection until they get results. My lease has a right to inspect clause.
I get this all the time and it's probably just an excuse. You have a 99.98% chance of NOT dying from COVID.
Give them a written notice of inspection. Tell them they have 24 hours to respond and coordinate the time. If they are concerned about COVID, offer to wear gloves and mask during the inspection and they can leave the rental while you are there so there's no interaction.
Another option: tell them they have 24 hours to contact you and conduct a video walk-through. Use facetime or some other app to communicate while the tenant walks through the rental and points the camera at what you want to see. Or they can record a video and send it to you.
Check your local laws to see if there's any prohibition against it. To my knowledge, in-person home inspections and appraisals are still taking place every day around the country.
The DIY Landlord Book4.7247 Reviews - Member since 2021 · 23 posts · 4 votes5y
Tenant let me in today and I now have a list of violations. I don't want to go into the full list here for the purposes of privacy but let's just say that apart from property violations, the tenant is also violating the pet policy and having multiple inhabitants residing in the house.
I am in talks with an attorney who suggests that we start with a 3 day cure or quit. My assumption is with the 3 day cure/quit the tenant will claim to have fixed everything. I can do another inspection on the 4th day for the property violations but the pet policy and un-permitted occupants are harder. I am guessing I'll have to drive by or ask the neighbors for repeats of pet/occupant violations?
I'd love to hear how you've dealt with post cure/quit situations. @Nathan Gesner, @Steve Vaughan
I'd want to add that I am not trying to be a heartless landlord but I am starting to get worried that this tenant will expose me to liabilities with their bad behavior.
- Member since 2021 · 23 posts · 4 votes5y
@Nathan Gesner I found your older comments here :) https://www.biggerpockets.com/... . This makes a ton of sense to me and I'll follow through to check for extra beds and living circumstances on the 2nd inspection.
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