Tenant not paying Rent

12 Replies

I currently have a 1 bedroom/ 1 bath unit that the tenant stopped paying rent for after losing her job. I have notified her and talked to her about being late on rent and that it is a breach of the lease agreement.

What in your experience is the best next step for me to take as the landlord? My property is located in Peoria, Illinois. 

You need to look at what your state laws are and what they  still have in place in terms of eviction moratoriums and rental assistance.  If you want her to try for rental assistance and your state has a program they see about applying.  If she has a plan for catching up then see if that works for you. Otherwise let her know that if she doesn't move out you will proceed to eviction as soon as legally possible and that will hurt her chances of getting another apartment.  you should serve her notice on eviction as required by your state laws. If you don't want to go it alone hire an attorney for the eviction. 

Now some may mention cash for keys, I am not a fan but might make sense in some states.

Illinois has some of the not so friendly landlord laws so best way is to try to do a cash for keys vs spend more money to go to court and then the court allow them to stay there for a few months. Talk with the tenant and see if they are motivated to pay rent; maybe take that one month and spread across other months rent. I done that to help a tenant who was laid off due to covid and was waiting for a long time for unemployment to kick in

She already knows it's a breach of the lease agreement. Talking to her is more likely to exacerbate the issue.

When a tenant starts to struggle, the best thing you can do for all concerned is treat it like a business. Serve written notice as soon as the law/lease allows. Charge the late fee. Start the eviction.

Look at how a late payment is handled by every business: utilities, cell phone, car loan, mortgage, etc. They don't call and ask why the payment is late. They don't listen to sob stories. They don't try reasoning with you or negotiating some kind of plan. They send notice, they charge fees, they take action. They do it professionally, in accordance with the law and the agreement, it's in writing, it's without emotion. That's what most people respect and react to.

This is your answer right here.  To me, there is no point engaging into the why's of the issue.  If you are a compassionate person, it might convince you to give them "extra time" or convince you next month they have everything in order.

Follow the rules and it will also show your other tenants that you don't mess around - a deal is a deal.  You kept you end of the bargain with a well maintained, safe, and healthy rental, they need to pay on time.  Give an inch, take a mile.


Originally posted by @Nathan G. :

She already knows it's a breach of the lease agreement. Talking to her is more likely to exacerbate the issue.

When a tenant starts to struggle, the best thing you can do for all concerned is treat it like a business. Serve written notice as soon as the law/lease allows. Charge the late fee. Start the eviction.

Look at how a late payment is handled by every business: utilities, cell phone, car loan, mortgage, etc. They don't call and ask why the payment is late. They don't listen to sob stories. They don't try reasoning with you or negotiating some kind of plan. They send notice, they charge fees, they take action. They do it professionally, in accordance with the law and the agreement, it's in writing, it's without emotion. That's what most people respect and react to.

 

@Cedric Volkmer - What was your tenant's response after you talked with her?  I understand the job was lost, but are they able to collect unemployment or get any assistance? 

Now, some people might say it doesn't matter the circumstances but I try to lead with empathy and understand what is going on before I jump to conclusions.

Next steps......I know up here in Chicago you need to serve them a 5-day notice "officially" and then serve an eviction notice.

100% you need to serve her with notice.  7, 30 or 60 day whatever your state allows.  Doesn't mean you are going to evict her but you need to get the clock ticking.  You need to start the clock on all of the above options.  Cash 4 keys, State COVID fund, Payment Plan, eviction, whatever the end result is going to be you need to set a deadline.  So, step one, set a legal deadline for your next move and then operate within that.  

if she was terminated or laid off from her job she can draw unemployment and pay the rent. If she quit her job it is sometimes difficult to draw unemployment.

Don't get held hostage...first thing is serve a Notice To Quit. Let the clock start running in your favor should this come down to eviction.  

Next, file a Small Claims Court lawsuit for the full amount of rent owed you - plus late charges.  It's inexpensive and most municipalities allow for filing online.  This is not an eviction event so it is not impacted by any moratorium.  Get your judgement so that she is not able to buy that next car, phone, or apartment without settling with you.

Then schedule an inspection - just a routine and regular maintenance inspection - giving proper advanced notice.  If any violation is found during the inspection, serve a Notice To Quit/Cure for lease violation. These violations are not covered by the moratoriums and you will be able to evict.

Bottom line: you're running a business.  I don't recommend doing Cash for Keys because you'll just be out more and she won't qualify to rent anywhere else.  Sometimes the best thing you can do for both parties is to simply MANAGE TO THE LEASE.  It's a best business practice and it motivates the unmotivated to seek other remedies including housing assistance, moving in with someone else, getting a new job (workers are in short supply!).  

There's a program through IHDA where you can apply to get rent paid for by the government. See link here. That would be my suggestion as a start unless you really want them out. 

I would say that If you are not in urgent need of money and you can wait, then you should look at the intentions of your tenant, If her intentions are clear and you know that she will pay as soon as she will able to pay, then you should wait for a bit. You will be saved from any legal expenses and other than that you will earn repute for being a gentleman and a good landlord gesture, which will worthable from a business perspective as we

      But If you are sure that she won't be able to pay your rent soon enough then you should serve her a legal notice.