Have a tenant that is $150 short (Florida)

Investor · Palm Beach County, FL · Member since 2019 · 370 posts · 330 votes

I have a tenant that I am self-managing. Her rent is $1,350, she has been there for 1.5 years, always on time. We have a good relationship. She was 2 weeks late this month, she was transparent as to what was going on so I gave her the benefit of the doubt. When she finally paid, it was $150 short. I reached back out asking for the remainder to be paid yesterday. She agreed but no money was paid.

I am nervous this will put us in a bad position for March. Not sure how I should proceed.

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Ko KashiwagiPro Member

Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes

Hi Ryan,

What does your lease agreement say in regards to late payments and late fees? As much as it's nice to give the tenant a benefit of the doubt, this can lead to slippery slopes and often ruin landlord experiences. It's good to stay professional and show sympathy, but it's important you enforce the rules set in the lease agreement. Tenant laws depend by regions, but in general it's a bad idea to accept partial payments as there is a chance you need to wait longer for evictions.

310-848-9776

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Ko KashiwagiPro Member
Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
2y
Hi Ryan,

What does your lease agreement say in regards to late payments and late fees? As much as it's nice to give the tenant a benefit of the doubt, this can lead to slippery slopes and often ruin landlord experiences. It's good to stay professional and show sympathy, but it's important you enforce the rules set in the lease agreement. Tenant laws depend by regions, but in general it's a bad idea to accept partial payments as there is a chance you need to wait longer for evictions.
310-848-9776
6 Reply
Eric Gerakos
Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
2y
Never accept partial payments. It sets a precedent.
4 Reply
Glen Wiley
Investor · Richmond, VA · Member since 2023 · 459 posts · 474 votes
2y
Speaking from experience. Do NOT let this continue. She will probably gradually get further and further behind.

I hate to be this way, but if the rent is not paid in full each month then I evict them. I wish I could be gentler, but I have been taken advantage of this often enough that I have learned it is not a good idea.
4 Reply
Ryan Cleary
OP
Investor · Palm Beach County, FL · Member since 2019 · 370 posts · 330 votes
2y
Quote from @Glen Wiley:

Speaking from experience. Do NOT let this continue. She will probably gradually get further and further behind.

I hate to be this way, but if the rent is not paid in full each month then I evict them. I wish I could be gentler, but I have been taken advantage of this often enough that I have learned it is not a good idea.
Thanks for the input Glen! I have tacked on the difference to her March rent with no other option besides paying in full. A three-day notice will be promptly issued next month if there is any issue.

2 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y
Quote from @Eric Gerakos:

Never accept partial payments. It sets a precedent.

Right...and if you go to court, I believe the judge will count that as accepting that months rent correct?
3 Reply
Tony Savage
Real Estate Broker · San Diego, CA · Member since 2016 · 187 posts · 117 votes
2y
My tenants think Balboa Management owns the property which is my c-corp. They think I just work for Balboa. There is sense that Balboa will not tolerate late/partial payments and I blame Balboa for everything! It's been a long while since I've had to deal with partial payments.
4 Reply
Kevin Sobilo
Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
2y
@Ryan Cleary, some pretty bad advice here IMO.
The general issue with accepting a partial payment is that unless there is something in writing to the contrary it can be seen as evidence that a payment plan was made between you and the tenant. So, that you may not be able to start the eviction process until the following month, but it was already mid month when you received it so, no significant loss of time there anyways.
With regard to giving a tenant leeway, its very short sighted to evict a tenant with a VERY strong track record for a VERY small shortfall one month, especially when they have been communicative and given you what sounds like a reasonable explanation as to what is going on.
The cost to evict, in terms of lost rent, vacancy, turnover costs, plus the work involved to secure a new tenant who ON AVERAGE will be WORSE than the one you would be evicting sounds counter-productive.
I suggest communicating more. It sounds like you told her to pay yesterday, but didn't ask if she could pay. If you just told them to pay, they may have been afraid to tell you they couldn't as opposed to asking questions where they know you want honest responses.
If you are nervous about a $150 shortfall after 1.5 years of on-time payments, I also suggest working on your own mind-set as this is a FABULOUS situation MUCH better than the average. So, if this makes you nervous you may not be prepared for more difficult situations.
5 Reply
Ben ScottPro Member
Property Manager · Oklahoma City, OK · Member since 2019 · 579 posts · 351 votes
2y
I'd agree with the slippery slope argument. Review your state's landlord tenant laws and enforce any measure regarding non-payment of rent. Just to establish this is a business and you're following all state laws. After all, failure to pay rent is a violation of the lease.
3 Reply
Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
2y
It can be a slippery slope but try to find the cause first. Did she have a hardship with a job or is there something deeper? A large expense come up? You are not a charity but her being there for 1.5 years is a good sign. If it's going to be a long time thing where she can't pay or she can't afford the place then you might need to evict.
3 Reply
Tony Savage
Real Estate Broker · San Diego, CA · Member since 2016 · 187 posts · 117 votes
2y
No one on here on Bigger Pockets is intentionally sharing bad information/advice with anyone. We're all here to learn from each other.
4 Reply
Glen Wiley
Investor · Richmond, VA · Member since 2023 · 459 posts · 474 votes
2y
Quote from @Kevin Sobilo:

@Ryan Cleary, some pretty bad advice here IMO.
The general issue with accepting a partial payment is that unless there is something in writing to the contrary it can be seen as evidence that a payment plan was made between you and the tenant. So, that you may not be able to start the eviction process until the following month, but it was already mid month when you received it so, no significant loss of time there anyways.
With regard to giving a tenant leeway, its very short sighted to evict a tenant with a VERY strong track record for a VERY small shortfall one month, especially when they have been communicative and given you what sounds like a reasonable explanation as to what is going on.

Except that he explained that she didn't respond which is by definition not communicative.
After more than 20 years of landlording I have learned a few things. My best lesson came from a tenant that strung me along until they were many, many months behind. Every time it was another relative that died, a job problem, a kid problem. Each of these excuses sounded reasonable and I wanted to believe. Cost me 15 months rent by the time the drama ended with an eviction.
The latest experience I had (just last year) involved a tenant claiming that he had job issues. I was patient and let him get a little behind after 4 months of on-time payments and then a few months later the payments stopped altogether. Found out later that he is a serial non-paying tenant that managed to keep judgements off somehow. Multiple landlords had been burned. Cost me 4 months rent before he was out.
Consider - if they are that low on money that they are half a month late AND $150 short....they are not likely to catch back up. Think about how that will have to work, they will somehow need to make enough in the last few days of the month to cover the next months rent and the shortfall. Is that likely?
More likely, they will be late the next month, and the next and an unexpected event will make them short again soon, and the another. You will find yourself finally having to evict them anyway but not until they are a few months in arrears.
2 Reply
Kevin Sobilo
Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
2y
Quote from @Glen Wiley:

Quote from @Kevin Sobilo:

@Ryan Cleary, some pretty bad advice here IMO.
The general issue with accepting a partial payment is that unless there is something in writing to the contrary it can be seen as evidence that a payment plan was made between you and the tenant. So, that you may not be able to start the eviction process until the following month, but it was already mid month when you received it so, no significant loss of time there anyways.
With regard to giving a tenant leeway, its very short sighted to evict a tenant with a VERY strong track record for a VERY small shortfall one month, especially when they have been communicative and given you what sounds like a reasonable explanation as to what is going on.

Except that he explained that she didn't respond which is by definition not communicative.
After more than 20 years of landlording I have learned a few things. My best lesson came from a tenant that strung me along until they were many, many months behind. Every time it was another relative that died, a job problem, a kid problem. Each of these excuses sounded reasonable and I wanted to believe. Cost me 15 months rent by the time the drama ended with an eviction.
The latest experience I had (just last year) involved a tenant claiming that he had job issues. I was patient and let him get a little behind after 4 months of on-time payments and then a few months later the payments stopped altogether. Found out later that he is a serial non-paying tenant that managed to keep judgements off somehow. Multiple landlords had been burned. Cost me 4 months rent before he was out.
Consider - if they are that low on money that they are half a month late AND $150 short....they are not likely to catch back up. Think about how that will have to work, they will somehow need to make enough in the last few days of the month to cover the next months rent and the shortfall. Is that likely?
More likely, they will be late the next month, and the next and an unexpected event will make them short again soon, and the another. You will find yourself finally having to evict them anyway but not until they are a few months in arrears.

Perhaps you missed the portion where I explained that it sounded like the LANDLORD didn't communicate well likely causing the tenant not to feel comfortable responding.
This tenant has an ~18 month record of on time payments not just a few months. That is enough to know you have a paying tenant.
I know you think your reasoning makes sense, but it really doesn't. Over the long run that approach I believe will lead to less rent collected overall. Instead of relying on anecdotal evidence with your horror story, perhaps do some honest analysis instead.
The vast majority of the time a tenant like this will catch up, if the shortfall was caused by a verifiable and temporary issue. Evicting a tenant like that is short sighted. Yes, once in a while you will get bitten, but you more than make up for it with the many times the situation gets rectified.
2 Reply
Glen Wiley
Investor · Richmond, VA · Member since 2023 · 459 posts · 474 votes
2y
Is that based on an actual study or your personal experience? I hate to pull the grey hair card but 20 years of collecting rent is 20 years, how many years have you been handling rental properties?

I am happy to do some honest research. Shall we start with the demographic that rents houses? Multiple studies show that these families typically have no ability to cover a $400 emergency. They are often at the limit of housing cost to income ratio.

Once I started being firm and clear with folks - telling them upfront that eviction proceedings would begin after 5 days past due, I virtually never have late rent. Even when times are tough, they know that they pay the landlord first. We have a crystal clear conversation about this at the lease signing.

To show I am not a grinch - part of my agreement with folks is that every 13th month I discount their rent by 10% to recognize their on-time payments. I usually do this a little early if I can get it to them in time for Christmas. I also accept tenants with bankruptcies, felonies etc. as long as they don't lie about it during application process (evictions/judgements for unpaid rent are a hard no of course).
2 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
You should not have accepted it. It's all or nothing & you're out.
I get the feelings, etc., but you're not here for a relationship-- you're here for business. Clearly they cannot respect that, therefore why should you?
Don't be worried about March, it's simple. Tell her you need to the other $150 today or tomorrow, and for March the payments needs to be in full nothing partially will be accepted. If she has a problem with that, that's her problem. Your problem is getting your hands dirty with this and not having a property manager.
2 Reply
Marci Stein
Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes
2y
She owes you the full rent, not part of it. Now she owes you late fees as well. If she knows she could get away with this one time it will happen again. We must train our tenants as to what we expect of them and be clear.
2 Reply
Michael SmytheBusiness Member
Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
2y
When did you send an eviction notice to let tenant know time is ticking to pay or go?
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Ryan Cleary
OP
Investor · Palm Beach County, FL · Member since 2019 · 370 posts · 330 votes
2y
I have been in constant communication with the tenant. She explained her situation. Since we have a good relationship, I told her the owed money was added to her March payment, and I switched her profile to only accepting full payments. I will be strict in enforcing March's payment.
0 Reply
Glen Wiley
Investor · Richmond, VA · Member since 2023 · 459 posts · 474 votes
2y
It will be interesting to hear follow up over the next month or two.
1 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
2y
1. Run it like a business. When the bill is not paid in full, you follow your process. There's no panic, no animosity towards the tenant, no sleepless nights or hard liquor. Just follow your process.
2. "I'm nervous this will put us in a bad position for March." It makes me nervous that one payment missing $150 is so impactful on your business model. I hope you have a reserve and can handle non-paying tenants for a few months.
I would let her know you are being gracious this one time. She pays everything in full today, March 1st, or you start the eviction process.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y
Quote from @Nathan Gesner:

1. Run it like a business. When the bill is not paid in full, you follow your process. There's no panic, no animosity towards the tenant, no sleepless nights or hard liquor. Just follow your process.
This ^^^ is perfect. It is all that needs to be said.
1 Reply
Kevin Sobilo
Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
2y
Quote from @Bruce Woodruff:

Quote from @Nathan Gesner:

1. Run it like a business. When the bill is not paid in full, you follow your process. There's no panic, no animosity towards the tenant, no sleepless nights or hard liquor. Just follow your process.
This ^^^ is perfect. It is all that needs to be said.

Not even close to all that needs to be said. They are good words and I agree with them but what you think should be "the process" and what another might think should be "the process" may differ widely. So, there is a lot to discuss on that topic beyond those words.

"Running it like a business" absolutely does not mean, as soon as its late one must start the eviction process with the appropriate notice etc. It can mean other things!
1 Reply
Ryan Cleary
OP
Investor · Palm Beach County, FL · Member since 2019 · 370 posts · 330 votes
2y
Quote from @Nathan Gesner:

1. Run it like a business. When the bill is not paid in full, you follow your process. There's no panic, no animosity towards the tenant, no sleepless nights or hard liquor. Just follow your process.
2. "I'm nervous this will put us in a bad position for March." It makes me nervous that one payment missing $150 is so impactful on your business model. I hope you have a reserve and can handle non-paying tenants for a few months.
I would let her know you are being gracious this one time. She pays everything in full today, March 1st, or you start the eviction process.

Thanks Nathan!
By no means will $150 affect us, I was referencing her situation in keeping up with rent.
1 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
2y
things happen and how a tenant deals with it speaks volumes. She talked to you ahead of time which was good, but then didn't respond when you told her she was $150 short. See what she does for March rent. Some times things happen and they do catch up; other times they can't and get further behind. I've worked with tenants where they paid 50% of the rent on the 1st and 50% on the 15th as it worked better with their paychecks. Others as soon as they miss one month's payment, I give them notice and both times they left before we filed for eviction.
1 Reply
Ryan Cleary
OP
Investor · Palm Beach County, FL · Member since 2019 · 370 posts · 330 votes
2y
Thought I would keep everyone updated, the tenant is paid in full!
2 Reply
Richard Justin
Member since 2023 · 10 posts · 4 votes
2y
Quote from @Tony Savage:

My tenants think Balboa Management owns the property which is my c-corp. They think I just work for Balboa. There is sense that Balboa will not tolerate late/partial payments and I blame Balboa for everything! It's been a long while since I've had to deal with partial payments.

We do the same thing, blame a "board".
1 Reply

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