What To Do If a Tenant Misses Rent

by Lesly Gregory | Published: May 2, 2022

If you're a landlord, one of your worst nightmares is having to deal with overdue rent. Having a tenant who simply doesn't pay rent is such a headache. Not only do you have to hunt down the late rent, but you also have to decide how lenient you are. Do you offer a grace period? Do you accept partial payments? Or, do you let it go without any late fees?

Getting paid rent is a necessary piece of being a landlord. Late rent impacts your financial situation and most landlords will act quickly to the threat of having to collect late rent.

How will you go about dealing with it if you end up with a delinquent tenant? Here are some options to ensure your tenant pays up.

1. Contact the tenant

Before getting all worked up about collecting rent late, it's best to give your tenant the benefit of the doubt. Maybe they haven't yet realized they missed rent. Maybe circumstances out of their control have made it more challenging to send in their rent payment.

Regardless of what has led to unpaid rent, it's best to begin the conversation to get your tenant's rent gently. Start by simply reaching out with a phone call, email or even with a formal letter in writing, and listen to their side of the story.

2. Send a late rent notice

If your tenant struggles with paying rent on time, you may want to consider sending them a late rent notice. Roll up all the rent owed and late fees into a single, formal letter and send it via certified mail so you have a record of the delivery.

It's up to you if, within the late rent notice, you want to discuss options for late rent payments, such as making a partial payment or creating a custom rent payment plan.

This notice should also specify a time frame to have this sorted out, whether that means a set period to pay the rent in full or to agree upon an official payment plan. The time period for full late rent payments is usually between 10-and 14 days.

If this notice doesn't work, state and local statutes will dictate how long you have to wait to escalate the issue and possibly serve your tenant with an eviction notice.

3. Keep records of all rent owed

As this exchange happens, and you're notifying your tenant about paying rent that's overdue, keep track of all communication. Also keep track of all payment records, including any late payments that do get made. Should you end up needing to take further legal action against a tenant with past due rent, you'll need these documents for any court proceedings.

Figure out a payment plan.

4. Offer a plan for paying rent

If the tenant is willing to work with you, but is dealing with a financial hardship making it a challenge to come up with the full amount of rent, you could offer them a payment plan. This is totally up to you and is dependent on your own financial position. You need to ask yourself if you can wait on rent collection without it impacting your own finances.

If so, you and your tenant need to sit down and craft a payment plan that's in the best interest of both of you. Set up a payment schedule that involves them paying a certain amount each week or month until they pay off the debt. Roll into these payments any late fees you're charging, which should already be spelled out in the lease agreement as a consequence.

If you'd like to offer a grace period instead of a payment plan, where you give your tenant a set number of days to make a full rent payment, plus the late fee, you also have that option. A payment plan doesn't have to include accepting partial payment.

Whatever you decide, create a formal document that spells out all the parameters of the late rent payments, and have both you and your tenants sign it. Make sure you all retain copies for your records.

5. Suggest setting up recurring payments

If unpaid rent is a recurring problem simply because your tenant keeps forgetting whether or not they've paid rent, you can offer up a suggestion to streamline the process. Even if you don't have a way to electronically accept rent payments, you can ask your tenant to set up recurring payments through their own bank.

6. Offer to use the security deposit for rent

If the tenant doesn't have the money to pay rent, and they'd like to avoid a late fee, you could offer to use their security deposit instead. However, there's most likely only enough to cover one month's rent, and then you'd be without the security deposit to cover repairs, if necessary, when the rental property is vacant.

Going this route would require an addendum to the rental agreement to protect your own finances. You should require they reimburse the security deposit within a certain period, of time, maybe not one as tight as the due date for rent, but still within the term length of the lease agreement.

They can apply for government aid if they qualify

7. Suggest the tenant might apply for government assistance to pay rent

There are a variety of charities, non-profits and government organizations that can help tenants who are struggling to pay rent. Each requires some work on the tenant's part to apply for aid, but encouraging them to go this route can make it easier for you to get rent on time.

The National Council of State Housing Agencies

Although your local area may have organizations that can help your tenant deal with a late rent payment, the NCSHA lists information on federal support initiatives, while also providing state-specific information. If a tenant has to make a late payment, or your tenant immediately needs some kind of financial support, this organization is a great place to start looking for resources.

You may need to evict after all.

What to do if a tenant doesn't pay rent after all that

With so many ways to offer your tenants support should they miss a due date with rent, it's extremely frustrating to see them ignore the terms of their lease and simply not pay rent. If you're certain your tenant received notice of late rent and has opted to do nothing to work the situation out with you, it's time to get tough, and sadly, take eviction action.

1. Have them removed from your rental property

Before starting an eviction-based removal of your tenant, try to get back your property by sending a quit notice. Instead of just being a notice that rent is late, a quit notice informs the tenant they owe late rent and must vacate the property within a set number of days. This option can work with any lease violation and is a much easier way to get tenants out than eviction from a financial/legal standpoint.

The standard time frame for a notice to quit for this particular reason is three days.

2. Get an eviction order

Most state laws require you to wait 30 days after a tenant has violated their lease, such as by not paying rent, to send a notice of eviction. Filing for eviction is a pretty involved process, that can lead to a court date, an eviction lawyer and more red tape toward getting your rent, but in the end, it allows you to bring in a new tenant, hopefully, one that understands the importance of paying rent in full and on time.

If you do have to take your tenant to court, it's likely the case will fall under 'rent arrears'. This means the tenant owes you money for rent that hasn't been paid. Make sure to bring all the evidence of how you've handled the situation thus far to court, showing you've attempted rent collection with no success. Also, bring a copy of the lease to show how your tenant is in violation.

Take them to court.

3. File a civil suit

Finally, you can file a civil lawsuit against the tenant to try and recoup any rent owed, plus damages and court costs. This is usually a last resort, as it's expensive and time-consuming. It's also a more common strategy to use against tenants who've already moved out.

If a tenant owes rent because they broke their lease before the term was up, or moved without giving proper notice if they had a month-to-month lease, filing a civil suit is one of the best ways to recoup unpaid rent and other expenses. If the tenant is still living in the rental, it's probably better to serve eviction papers, than to file a lawsuit.

Having tenants means dealing with rent payment issues

Deciding to become a landlord and have tenants puts you at risk for a lot of uncomfortable situations, one of which is having to chase down the money you're owed each month.

If you find yourself in the unfortunate situation of having a tenant who doesn't pay rent, staying on top of the issue can really make a difference. Just remember to start slow and simply ask for the rent rather than jumping into the eviction process with both feet a few hours after rent is due. Taking it slow can make the situation feel less combative, and can get you your money faster.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Categories: Landlords

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