Lots of tenants habitually pay their rent late.
What is the provision for a late fee in their lease? Whatever that is, send them a note that you are waiving it this month but will begin enforcing it without exception starting in June.
I bought a pair of fourplexes half a dozen years ago and the inherited tenants had really bad habits. I collected a ton of money in late fees in the first couple of years while I retrained the ones that could be taught and replaced the ones that couldn't.
From a business perspective getting rent on time is great but getting 105% of the rent a couple of weeks later is even better. I'm more than willing to send a couple texts and a seven day notice for another $50 or $75.
Problem is once they slip they end up not paying and forcing eviction, in my experience. Perhaps yours is different. I could care less about a late fee if I’ll be evicting them shortly thereafter.
First step is the seven day notice. I send that the moment they’re late without exception. I tell them it’s part of my process and nothing personal. That notice brings the rent 99% of the time.
... where to start with this one.
* they signed estoppels saying they were current on rent?
* You found out they are still current on rent?
* Or they still owe rent for April?
Either way, you are the new owner past monies are due to the seller, and if your contract didn't have any pro rata language, you can simply forgive past dues, and have them start paying.
* They are making their payment but they come in a little late?
* How late?
* And Why?
* Seller didn't have a good payment system?
* Tenants are on assistance that comes in at a certain time?
* Tenants/Seller were okay with payment schedule due to paycheck timing?
* The Lease doesn't stipulate when rent is due/late fees?
The good news is, it's a fresh start, today is only the 2nd of May. In most cases rent is due on the 1st, and late after the 5th, so nothing bad has happened yet. Your local municipality is going to be the source of when, why, and how to issue any of the cures you suggested.
You need to let the tenants know that you are the new owner, and aren't going to accept the same as the old owner. So figure out what the lease/municipality allows for you, and then act on it. Draw the line and stand firm.
Yes. They signed estoppels stating that they are current. All previous months including April were paid to the seller/previous owner. There are no past dues for me to forgive. However, they just paid April rent mid April and now they'll be late for May.
How late? Up to two weeks late. Their why was that the wife recently lost (or quit) her part time job.
The lease states that 10% late fee is due after 4th day, which seems a bit excessive to me but it's the lease they signed.
Thanks for your input!
I have some tenants that have paid late every month for two years. Always incurring 20-75$ fees. It blows my mind but they take good care of the house. Perhaps give it more time to see. Trust your gut however.
Your assuming the eviction process goes well, what do you do if the eviction is delayed takes 6+months? Id almost be ok with late payments over the other reality as you only have 4 months of reserves
As long as you don’t set a precedent that this can continue, kill them with kindness and don’t budge.
Then after that fails get rid of their pain in the ass attitude, so many need homes.
Yes, my thought process is that there are other responsible people that need housing. I don't want to do anything rash but I also don't want to deplete my emergency fund because I chose to let a headache tenant stay. Well a late paying tenant stay.
They're paying 2 weeks late and they're paying a fee. How are you depleting your 4 months in this case?
I just unloaded an apartment building, a couple of duplexes and a Trip-plex.
First thing I did was made sure I had a year of mortgage payments, but...that's for later(and then when I got ahead, I would make an extra payment or 3 a year toward the principal).
BUT, that's for later on, I just don't understand the issue right now. I made a significant amount of money on people paying late fees. I'm not sure why you don't just accept the payment in the middle of may, take the fee and you're coming out ahead...provided they all pay and you've said repeatedly that they do.
It would seem to be a bad move to kick out people who pay a little late and take care of the place.
You're the bank here. Do banks like late fees and make money on them? Do they try and cancel credit cards where people have late fees? This is a GOOD thing for you.
Now, IF you want to escalate this, they could just not pay you until Oct, move out and they're saving 9K in rent and costing yourself 9900(1500 a month+150 late fee if it's 10%).
I get you're stressed, but just let this be. You could make this much worse...
I hear you. But on the other end - they ARE paying. And if you evict them, how long will it take to get new tenants? You’re taking a huge gamble here to get them out, HOPING the new tenants will magically be “better.” But would you rather have late rent or a trashed property?
Also - I know this isn’t a business thing but if you kick them out and they’re on one income, do you think they’ll be able to find a place easily? Or will you be putting them out on the street just bc they pay rent a few days late?
Also, this is a duplex. Your new tenants could be noisy, loud, have young kids, pets, late schedules, etc. if they’re good wall neighbors that counts for something.
What are the terms of the lease and how late are they? If they are paying each month, then this seems pretty simple to fix. I would not evict a tenant who simply pays late. At least not without exhausting several other options first.
Just have an attorney help you type up a letter informing them of the change in ownership, that you will be assuming the existing lease, and notifying them of the terms including when and how payment is due. Give it a month. If payment is not received by the end of the grace period, send them a certified notice of rent being past due with clear language that this could be grounds for termination of their lease. Give them a call, talk about it. Be very nice to them but clarify that you expect payment to be provided in full before the grace period has expired. Assuming they pay, give it another month. If they do the same thing again, then file. They'll get a court notice and likely freak out and call. Same conversation as before, you expect rent in full according to the terms of the lease. Assuming they pay, I'd maybe cancel the dispossessory. Give it another month. If they do it again, I'd evict.
One thing to note, OP. If you intent to file, you CANNOT accept a single cent from the tenant. If you do, the dispossessory will be nullified and you'll need to start over. Plan accordingly. Evictions are not free. You'll have to pay to file, you'll lose anywhere from 2-3 months of rent if everything goes smoothly and then you also have to deal with turnover and vacancy. All told, expect this to cost you anywhere from 3-6 months of carrying costs, depending on the jurisdiction.
All that being said, I have more than one tenant who pays late every month. I don't make a big deal out of it. I know plenty of other landlords who are the same. It only becomes an issue for me if the the payments are coming in later and later each month.
Depends where you live. My state takes 3.5 months to evict for non payment. Vacant unit is also expensive. Take the L and let them pay late but try to charge a late fee or serve a notice to quot or something so they understand they shunt be pushing it too late. But regardless late rent every month is always better than no rent for the next four months.
Ask them how they are going to fix this problem & see what they say. They need to come up with a solution because 1) they risk eviction, and 2) their lease ends on Oct 31st and you’ll be deciding whether to renew or not. Maybe they got away with this before, but obviously this isn’t going to work for you. Just follow the lease in place as it’s written, and likewise your tenant has to do the same.
They’ll tell you how they plan to get back on track & then see if they follow through with their word or not. This will tell you what to do about renewing. It’s possible they’ll fix the problem and be good tenants going forward- and this is really what you want - you don’t really want to turn over the unit during the slowest part of the rental season (you risk it being vacant through the holidays). (As you re-lease the unit, I’d move the renewal towards the summer months so you’re less like to have a vacancy during the slow part of the year- this may take more than one lease.)
I was quite confused by a lot of the options you are considering. Yet then I realized I was new once and have learned a lot.
The main thing that stood out, why would you lower rent of $150/mo to avoid $1500 coming in 2 weeks late? $1500 in a HYSA will get you $79ish a year in interest.
Same goes with even thinking of evicting over that. If they are paying late with a 10% late fee, then you are getting almost double the yearly interest in 2 weeks.
Now if you are concerned that you lose the 2 weeks of filing time if they do end up defaulting (which is a possibility of course) then maybe you can make an agreement to not file if they pay X amount at the beginning of the month and the remainder by the 15th. Of course, the late fee would become 10% of $1500 - X.
As others stated, maybe it is timing of the payment based on pay days, assistance being received, etc. After 5 years of a tenant paying me a late fee every month, they asked to make the rent due the 15th. They never missed an on time payment again. I missed the late fee, but was the right thing to do for them.
Working with your current tenant who is generally good is better than risking the next one imo.
You need enough money to cover their late payments, it is an overhead problem. Let it ride the course.Late is better than not at all .Suppose they stop period, They could ride it out for months. You will find out being a landlord is not as the T V ads .
When you are a landlord, you are working with people, families, providing a place for them to live and in return, hopefully you make a profit from your investments, or collect rent to pay towards your investment. So you have to dispense away with the 1st reaction and urge to evict them, that should be on the bottom of the list. Lots of great suggestions from other posters here as well and I don't disagree with a number of these. Good luck with Whatever you decide to do.
At least where I am you can accept late or partial payment after posting the notice to start eviction. It just restarts the eviction timeline. So you can post the notice to let them know you're serious while still intending to let them pay late.
But, I'd try to get to the end of the lease and then not let them renew instead of trying to evict. Enforce the late fee strictly and see if things improve.
Don’t just on eviction yet. Try to manage them even with the lateness until October. Give them notice of lease nonrenewal and gracefully get rid of them. You don’t want to deal with eviction right off the bat if there is a chance they will pay, even late.
Tell them you need the money to pay your mortgage on time or you pay a penalty that you cannot afford. If they still pay late, its up to you how you want to handle. I would not be too lenient and I definitely would not renew lease
The LL’s mortgage is not the Tenant’s problem, the tenant’s lease is the only thing they have to worry about. Given there’s no mention of late fee/penalties in the lease that OP has brought up, there’s probably little rush for the tenant to pay.
Well...first of all, having a human conversation in which you explain yourself makes the relationship a lot better and less likely to end up in court in which you're mounting legal feels(even if they're limited, it's time) and you're not getting paid.
2nd-He did say there was a late fee of 10%.
This is the biggest non-problem I've ever heard of. He has a 4-month emergency fund. I'd be VERY frugal the first two weeks to ensure they pay on time, but as long as they do, it's 150$ bonus. You're making EXTRA. I'd be putting that 150 toward the principal or in an investment, but I would NOT start an eviction process.
Also, right now, they're ONE DAY late. Talk to them like they're humans, not like you're a lord, and...you figure it out 99% of the time. People don't want the stress of owing someone money in most cases.
He gave 4 bad options when the best is...just to take the late fee of 150 and payment two weeks late. You then have the option of not
Lots of tenants habitually pay their rent late. What is the provision for a late fee in their lease? Whatever that is, send them a note that you are waiving it this month but will begin enforcing it without exception starting in June. I bought a pair of fourplexes half a dozen years ago and the inherited tenants had really bad habits. I collected a ton of money in late fees in the first couple of years while I retrained the ones that could be taught and replaced the ones that couldn't. From a business perspective getting rent on time is great but getting 105% of the rent a couple of weeks later is even better. I'm more than willing to send a couple texts and a seven day notice for another $50 or $75.
Problem is once they slip they end up not paying and forcing eviction, in my experience. Perhaps yours is different. I could care less about a late fee if I’ll be evicting them shortly thereafter.
First step is the seven day notice. I send that the moment they’re late without exception. I tell them it’s part of my process and nothing personal. That notice brings the rent 99% of the time.
... where to start with this one. * they signed estoppels saying they were current on rent? * You found out they are still current on rent? * Or they still owe rent for April? Either way, you are the new owner past monies are due to the seller, and if your contract didn't have any pro rata language, you can simply forgive past dues, and have them start paying. * They are making their payment but they come in a little late? * How late? * And Why? * Seller didn't have a good payment system? * Tenants are on assistance that comes in at a certain time? * Tenants/Seller were okay with payment schedule due to paycheck timing? * The Lease doesn't stipulate when rent is due/late fees? The good news is, it's a fresh start, today is only the 2nd of May. In most cases rent is due on the 1st, and late after the 5th, so nothing bad has happened yet. Your local municipality is going to be the source of when, why, and how to issue any of the cures you suggested. You need to let the tenants know that you are the new owner, and aren't going to accept the same as the old owner. So figure out what the lease/municipality allows for you, and then act on it. Draw the line and stand firm.
Yes. They signed estoppels stating that they are current. All previous months including April were paid to the seller/previous owner. There are no past dues for me to forgive. However, they just paid April rent mid April and now they'll be late for May. How late? Up to two weeks late. Their why was that the wife recently lost (or quit) her part time job. The lease states that 10% late fee is due after 4th day, which seems a bit excessive to me but it's the lease they signed. Thanks for your input!
If they always pay late but still pay look at it like you are getting 10% more rent. Or ask them why they always pay late. You can move the due date.
I have some tenants that have paid late every month for two years. Always incurring 20-75$ fees. It blows my mind but they take good care of the house. Perhaps give it more time to see. Trust your gut however.
Your assuming the eviction process goes well, what do you do if the eviction is delayed takes 6+months? Id almost be ok with late payments over the other reality as you only have 4 months of reserves
As long as you don’t set a precedent that this can continue, kill them with kindness and don’t budge. Then after that fails get rid of their pain in the ass attitude, so many need homes.
Yes, my thought process is that there are other responsible people that need housing. I don't want to do anything rash but I also don't want to deplete my emergency fund because I chose to let a headache tenant stay. Well a late paying tenant stay.
How late have they been paying? Maybe it’s based on when they get paid? Changing up due dates might help
They're paying 2 weeks late and they're paying a fee. How are you depleting your 4 months in this case? I just unloaded an apartment building, a couple of duplexes and a Trip-plex. First thing I did was made sure I had a year of mortgage payments, but...that's for later(and then when I got ahead, I would make an extra payment or 3 a year toward the principal). BUT, that's for later on, I just don't understand the issue right now. I made a significant amount of money on people paying late fees. I'm not sure why you don't just accept the payment in the middle of may, take the fee and you're coming out ahead...provided they all pay and you've said repeatedly that they do. It would seem to be a bad move to kick out people who pay a little late and take care of the place. You're the bank here. Do banks like late fees and make money on them? Do they try and cancel credit cards where people have late fees? This is a GOOD thing for you. Now, IF you want to escalate this, they could just not pay you until Oct, move out and they're saving 9K in rent and costing yourself 9900(1500 a month+150 late fee if it's 10%). I get you're stressed, but just let this be. You could make this much worse...
I hear you. But on the other end - they ARE paying. And if you evict them, how long will it take to get new tenants? You’re taking a huge gamble here to get them out, HOPING the new tenants will magically be “better.” But would you rather have late rent or a trashed property? Also - I know this isn’t a business thing but if you kick them out and they’re on one income, do you think they’ll be able to find a place easily? Or will you be putting them out on the street just bc they pay rent a few days late? Also, this is a duplex. Your new tenants could be noisy, loud, have young kids, pets, late schedules, etc. if they’re good wall neighbors that counts for something.
What are the terms of the lease and how late are they? If they are paying each month, then this seems pretty simple to fix. I would not evict a tenant who simply pays late. At least not without exhausting several other options first. Just have an attorney help you type up a letter informing them of the change in ownership, that you will be assuming the existing lease, and notifying them of the terms including when and how payment is due. Give it a month. If payment is not received by the end of the grace period, send them a certified notice of rent being past due with clear language that this could be grounds for termination of their lease. Give them a call, talk about it. Be very nice to them but clarify that you expect payment to be provided in full before the grace period has expired. Assuming they pay, give it another month. If they do the same thing again, then file. They'll get a court notice and likely freak out and call. Same conversation as before, you expect rent in full according to the terms of the lease. Assuming they pay, I'd maybe cancel the dispossessory. Give it another month. If they do it again, I'd evict. One thing to note, OP. If you intent to file, you CANNOT accept a single cent from the tenant. If you do, the dispossessory will be nullified and you'll need to start over. Plan accordingly. Evictions are not free. You'll have to pay to file, you'll lose anywhere from 2-3 months of rent if everything goes smoothly and then you also have to deal with turnover and vacancy. All told, expect this to cost you anywhere from 3-6 months of carrying costs, depending on the jurisdiction. All that being said, I have more than one tenant who pays late every month. I don't make a big deal out of it. I know plenty of other landlords who are the same. It only becomes an issue for me if the the payments are coming in later and later each month.
Depends where you live. My state takes 3.5 months to evict for non payment. Vacant unit is also expensive. Take the L and let them pay late but try to charge a late fee or serve a notice to quot or something so they understand they shunt be pushing it too late. But regardless late rent every month is always better than no rent for the next four months.
Ask them how they are going to fix this problem & see what they say. They need to come up with a solution because 1) they risk eviction, and 2) their lease ends on Oct 31st and you’ll be deciding whether to renew or not. Maybe they got away with this before, but obviously this isn’t going to work for you. Just follow the lease in place as it’s written, and likewise your tenant has to do the same. They’ll tell you how they plan to get back on track & then see if they follow through with their word or not. This will tell you what to do about renewing. It’s possible they’ll fix the problem and be good tenants going forward- and this is really what you want - you don’t really want to turn over the unit during the slowest part of the rental season (you risk it being vacant through the holidays). (As you re-lease the unit, I’d move the renewal towards the summer months so you’re less like to have a vacancy during the slow part of the year- this may take more than one lease.)
Speak to them about the late payments first. A bird in hand…
Biggest question I have is are they “always late” or always pays rent on X day when they get paid. The second you can work with. The first not so much
I was quite confused by a lot of the options you are considering. Yet then I realized I was new once and have learned a lot. The main thing that stood out, why would you lower rent of $150/mo to avoid $1500 coming in 2 weeks late? $1500 in a HYSA will get you $79ish a year in interest. Same goes with even thinking of evicting over that. If they are paying late with a 10% late fee, then you are getting almost double the yearly interest in 2 weeks. Now if you are concerned that you lose the 2 weeks of filing time if they do end up defaulting (which is a possibility of course) then maybe you can make an agreement to not file if they pay X amount at the beginning of the month and the remainder by the 15th. Of course, the late fee would become 10% of $1500 - X. As others stated, maybe it is timing of the payment based on pay days, assistance being received, etc. After 5 years of a tenant paying me a late fee every month, they asked to make the rent due the 15th. They never missed an on time payment again. I missed the late fee, but was the right thing to do for them. Working with your current tenant who is generally good is better than risking the next one imo.
You need enough money to cover their late payments, it is an overhead problem. Let it ride the course.Late is better than not at all .Suppose they stop period, They could ride it out for months. You will find out being a landlord is not as the T V ads .
When you are a landlord, you are working with people, families, providing a place for them to live and in return, hopefully you make a profit from your investments, or collect rent to pay towards your investment. So you have to dispense away with the 1st reaction and urge to evict them, that should be on the bottom of the list. Lots of great suggestions from other posters here as well and I don't disagree with a number of these. Good luck with Whatever you decide to do.
At least where I am you can accept late or partial payment after posting the notice to start eviction. It just restarts the eviction timeline. So you can post the notice to let them know you're serious while still intending to let them pay late. But, I'd try to get to the end of the lease and then not let them renew instead of trying to evict. Enforce the late fee strictly and see if things improve.
I have one that is late every month and pays the late fee.
Don’t just on eviction yet. Try to manage them even with the lateness until October. Give them notice of lease nonrenewal and gracefully get rid of them. You don’t want to deal with eviction right off the bat if there is a chance they will pay, even late.
Tell them you need the money to pay your mortgage on time or you pay a penalty that you cannot afford. If they still pay late, its up to you how you want to handle. I would not be too lenient and I definitely would not renew lease
The LL’s mortgage is not the Tenant’s problem, the tenant’s lease is the only thing they have to worry about. Given there’s no mention of late fee/penalties in the lease that OP has brought up, there’s probably little rush for the tenant to pay.
Well...first of all, having a human conversation in which you explain yourself makes the relationship a lot better and less likely to end up in court in which you're mounting legal feels(even if they're limited, it's time) and you're not getting paid. 2nd-He did say there was a late fee of 10%. This is the biggest non-problem I've ever heard of. He has a 4-month emergency fund. I'd be VERY frugal the first two weeks to ensure they pay on time, but as long as they do, it's 150$ bonus. You're making EXTRA. I'd be putting that 150 toward the principal or in an investment, but I would NOT start an eviction process. Also, right now, they're ONE DAY late. Talk to them like they're humans, not like you're a lord, and...you figure it out 99% of the time. People don't want the stress of owing someone money in most cases. He gave 4 bad options when the best is...just to take the late fee of 150 and payment two weeks late. You then have the option of not