Bad payers are a problem for all landlords and we’ve all found different ways to deal with the problem. The best solution is one that gets the tenant back on track and avoids a costly eviction.
I use the term “bad payer” to cover late payers, partial payers, check bouncers, and non-payers. There are a number of ways to deal with bad payers. First, you want to do everything in your power to ensure that all tenants pay on time, every time. For example, set up a schedule of discounts for on-time payments or late fees for late payments. Many landlords favor the discount approach because it is an easier sell to a prospective tenant, but you may find it is not as effective in reducing late payments. Why? Because there’s no stigma attached to not getting a discount.
What do you do with a chronic late payer? First recognize that there are gray areas here. I believe your actions should depend on whether the lateness is consistent – for example, the tenant always pays between the third and sixth day of the month – or gets worse over time. A tenant whose lateness gets worse every month, despite your late fees and complaints about late payments, probably has little regard for your authority. When he is late enough to warrant an eviction notice, send it, and follow through. Chances are you’ve already seen other signs that this person is irresponsible- he doesn’t return your calls and may have misbehaved in other ways in the unit.
On the other hand, a consistent late payer is probably worth keeping, even if you can never get him to pay on time. Consider that the late payments are actually improving your bottom line. For example, suppose I have a tenant who always pays about the sixth day of the month, and is charged a $5 per day late fee on a $600 monthly rent. This tenant is giving me a 5% rent increase in exchange for a few days lateness – I’ll take that. Another consideration is how long it will take you to re-rent the unit. My properties are in New Hampshire and it’s very difficult to find a good tenant during the winter.
There are lots of property types and people can prefer tenants on rent and some individuals are there who do not pay rent on time, this problem is very common.
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There are several ways how landlord can deal with bad tenants. The fist and the simplest one is a discussion of late rent fees is in order. And thanks you for mentioned that. Besides, late payments could be grounds for evection. But, no matter what landlord decide do in the case of tenants being constantly late, they need to make sure they document everything to show proof later of this being a consistent practice of the tenant.
ReplyDeleteAnd there are some measures that landlords need to take in order to prevent late payments. This article https://rentberry.com/blog/reporting-delinquent-tenant has good recommendations.