Habitual Late Paying tenant! To evict or put up?

31 Replies

Hi All- I have a tenant who habitually pays late. In fact, she has started to pay in arrears. To give some background, she has been renting for over three years now. She was not the most qualified tenant at the time but had a stable job and rent paying history. At the time, I was out of the country and was keen to get it rented. In fairness to her, she use to or at least most of the time paid on time prior to the pandemic. 

During the pandemic, she started paying late and had some arrears all of which were paid up without too much hassle. However, she has fallen in this habitual routine of paying at the end of the month. I decided against charging any late fee in the past.

She is back in full time employment along with her adult children who are also on the lease and in full time employment but my contact is mostly restricted to her and she is quite unresponsive to my repeat requests that she pay as per lease. She was quite upset on the suggestion that I will start charging late fee if she continues with this. Frankly, I don't want to charge late fees either. I am also worried that the one month sec deposit won't cover any lost rent or potential damages if she moves on overnight. Falling short of not renewing the lease, what else can be done to bring her to comply with the lease. So this month's rent which was due on the 1st is not paid and with the rent being around 3K, this has the potential to balloon up quickly.

@Jacob Beg

You've allowed the behavior for a long time. It's going to be difficult to change it. I know this doesn't help you, but this is one of the worst side effect of letting late-payers stretch out the late-paying.

You could try a frank conversation about how things need to change, how you need that rent on time. How you'll be forced to charge a late fee to offer her the convenience of paying as late as she has. You just don't have the money to cover her. It's not in your budget for this rental.

But probably nothing is going to change until you have to get rid of her. And you can be damned well sure that when she goes, she will insist that she paid the rent every month "just as soon as I had it," and that should have been good enough for you. The cognitive dysfunction necessary to forget the actual terms of the lease has probably already happened upstairs for this tenant.

@Jacob Beg if you don't want to charge late fees then why are they in your lease? You can't have it both ways. Either enforce the late fees or continue with the pattern that's developed. You'll be texting/calling/leaving messages for the tenant to "please catch up on rent" with the hope they will choose to pay rent. 

You have 3 options: 

1. Charge late fees - tell them you were lenient throughout COVID, but now you're enforcing late fees on all your rentals. No questions asked

2. Do nothing. The existing pattern will continue

3. Do not renew their lease 

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Of course she is upset that you charge late fees because she doesn't want to pay them.  Tell her the way to avoid that is to pay the rent on time.  If you've been letting her pay late for many months, she's gotten use to it and may not have the money to suddenly pay on time.  Tell her starting Dec 1 or Jan 1, late fees will apply.  That gives her 6-10 weeks to get her finances sorted.  You're asking her to basically pay rent twice in a short period of time (it is her doing) and she may not have the money to do that.

Also talk to her as to why it is late.  I've had one tenant that it worked better to pay half the rent on the 1st and the other half on the 15th of each month.

There is very little chance that this will ever work out. You've trained her to ignore the rules and do what works best for her at any given moment. She no longer cares about your lease agreement. I bet dollars to donuts there's more problems than just her rent.

You could take concrete steps to correcting this behavior and maybe getting back on track, but it's not worth the effort and she is far more likely to fail and leave you hanging.

If she is on a month-to-month lease, I would give her the necessary notice of termination and a demand that she pay the final month of rent to catch up before leaving. She probably won't and you'll have to use the deposit.

If she's on a long-term lease, then you're stuck with her until it expires. In this case, I would recommend you educate yourself on the Emergency Rental Assistance Program where she can apply for up to three months in rent. Work with her to apply and get caught up. Then wait for the lease to expire and get rid of her.

@Jacob Beg as hard as it may be, you need to take responsibility as the source of the problem. You should never allow late rent without a late fee. Without a late fee or threat of eviction, there is no motivation to pay on time, because there are no consequences for paying late. I don't let it go past the middle of the month without serving notice to vacate. 

There are two aspects to payment:

1. Ability to pay, meaning income. With her and adult children employed, most likely she has money.

2. Motivation and discipline to pay, meaning is paying rent a priority. Someone can have all the money in the world and still pay their bills late. 

My advice is tell her she has two choices. Move out or start paying on time. Starting November 1, you will be fully enforcing the late fee requirements of your lease. Who cares if she gets mad? If a tenant gets mad at me, I tell them to start being more respectful. People will run all over you if you let them.

You should consider going forward if property management is the right fit for your personality. For many people, hiring a PM is the better choice and that it totally fine.

@Jacob Beg Not to pile on this thing but the best predictor of future behavior, is past behavior. What would all of a sudden make her change her learned behavior? Nothing unless you start enforcing the late fees that are already written into your lease. By avoiding it, you have taught her that you are a doormat and she can dictate the terms. And you can bet money that if you give her notice, she'll use the deposit as last month of rent. You may as well prepare to serve notice as soon as you legally can so you can move forward and get the property rented to a good tenant. Good luck. 

@Jon Kelly for option number one how should that be communicated, email or some type of certified mail? I also have an issue similar to this, i do want to have the convo like you’re saying due to being Lenient during Covid. But sticking to everything in my lease as well. 

@Ishmael Johnson either way of communication is fine. I’d follow whatever form you currently communicate.

I know a lot of landlords have done this. I also expect most, not all, tenants will understand and appreciate it.

I suggest you have an honest conversation with her about paying on time and ask her in a nice way why this is happening. Better to get her out before she trashes your home! I would tell her you are reminding her of the lease terms and the late fee is a cost that is an option if she wants more time to pay. I would never present a late fee as a penalty but as a fee for convenience. I have made good money off of tenants that were just lazy and willing to pay to be late. Do your best to put a positive spin and you will keep her in place. Also suggest she moves to an online payment like zelle or paypal where you can request money by a due date to gently remind her and then send ongoing late fee requests to for the late fee as it builds so you don't have to feel you are walking on egg shells. Worst case she leaves and you get a better renter paying higher rent!

The big question to me is whether or not you already have a late fee clause in your lease.  If yes, and you haven't been enforcing it, I recommend taking the good ol' Brandon Turner approach.  Talk to a lawyer (friend, if possible) and ask "Should I be enforcing my lease?, Yes, OK".  Then, have a kind and frank conversation with your tenant saying that your lawyer told you that legally you have to enforce a late fee.  Blame somebody else so you don't have to be the bad guy when delivering bad news.

I collect rent using an online system that automatically charges a late fee if rent is paid late.  If that is an option to you with your current rent collection systems, I recommend putting that into place.

If a late fee is not written into your lease, then delay this conversation until it is time to renew.  Make it part of the renewal addendum then put everything into place.

This is one of those "ounce of prevention is worth a pound of cure" instances.  While this sounds like a pain, it could still get worse before it gets better.  I would try to set some money aside for an eviction (or judgment suit in today's landscape), cash for keys, or to help cover your costs until you can get a better system (and possibly tenant) in place.

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What you could have done but not obligated unless required by the state law is adding a 3 day grace period. Nonetheless, a late fee should always be a requirement to avoid these situations. If she still needs help there are programs that help the renter pay for utilities and rent. you can offer that as an option. Best of luck

@Jacob Beg

Ask for the late fee. I was in the same situation and I simply had a conversation with the tenant and let her know that I too have a late fee if I'm late paying the mortgage. I asked her to add an additional $50 if it was after the 5th. I don't know if it was the conversation or an additional $50 actually carries that much weight but I was stunned by the results! She has not been late since!

As of today the tenant owes 3K?  That has already ballooned quickly : )   In 10 days it will be 6K.  

I get forgiving a late fee here and there but only as an incentive.  Meaning, if a tenant is late and says they can pay by X I have no problem throwing the inventive of if you do pay by X I will waive the late fee.  And then remind them this is a one time offer.  Forgiving late fees month after month after month is only helping the tenant understand the rules don't apply to them.  

I would let the tenant know that your days of forgiving late fees is over and starting X date you will be enforcing them again.  If you can afford the tenant turn and the vacant period to lease I would highly consider letting them go as well when this term is up.  If not, you need to start saving and get prepared for that and roll into a month to month VS a new term so when you have enough saved up you can give notice.

Hopefully you have a strong lease agreement, she should know that if payments are late there'll be consequences. Definitely work with your tenant to come up with a solution if they are having problems paying rent, covid changed the way properties will be managed forever. However some people will take advantage if they can. 

What does yourease say regarding late and missed payments? You haven't been following your lease which is why this has continued for so long. Now would be a good time to abide by your lease

Thank you all for the informative comments. I had a response from her claiming that she is borrowing from her 401K and will pay up the Oct and Nov rent shortly without specifying and dates and won't pick up the phone.

Most of my eviction dealings were with foreclosed owners who refuse to leave vs non-paying tenants. One of the reasons I have been reluctant to give notice is to avoid an adversarial stance and that she seem to always come through but I just have to put this to an end as I have encouraged this conduct by not enforcing the late penalties.

When giving notice for non-payment would you include the late penalty as unpaid rent? Will you waive the late penalties amounting to at least 3K over the course of two years or should that be included in the notice to quit. 

Have you considered an online payment portal for your tenants? I use Rent Redi (super inexpensive and a small fee is paid by tenant) and offer a slight discount to tenants who use Auto-Pay. It really eliminated the hassle of tracking down rent payments almost entirely.

@Jacob Beg

If you don't have the stomach to charge late fees, adopt an automated payment system that charges late fees automatically so you don't have to even think about it.

Your only other option is to keep dealing with a troubling tenant or to not renew the lease like others have said.

@Jacob Beg I suggest trying to find the problem and working with her to solve it (if you actually want to keep her). If she's a good tenant and has just fallen into a bad pattern I think it can be solved. Years ago I had an expense which caused me to pay rent late. Living paycheck to paycheck is not easy. Once you pay rent late once it DOES become a pattern. This person likely has no savings. I solved the problem with my landlords help. It wasn't something I WANTED to do but the only solution I could see. I told him I could not pay rent on time. I paid it late so I only had 2 checks to work with before rent was due again. My utilities were going to get shut off if I didn't pay them. My landlord gave me an eviction notice and I received help from an organization. It gave me time to catch up and we never had the issue again. Just wanted to add my experience here. Hopefully she will discuss the REAL problem with you. Seems like she may be avoiding you because she's ashamed and scared to get evicted. Possibly if you approach her kindly, the conversation is about solving the problem and you explain that you are trying to find a way to keep her it might work out.