As a rental property owner, you make every effort to select responsible tenants that pay rent on time each month. But no matter what precautions you take, no landlord will always receive rent on time.
So, when a tenant misses a payment, what then? How should a landlord respond to maximize his odds of being paid while keeping legal options available—just in case? Here are some recommended actions to take (and avoid) when handling a late payment.
Always begin by double-checking your records to verify that the payment is truly late!
Consult your lease, records, and local laws.
When determining how to handle a missed rent payment, know what guidelines your lease provides. And be prepared to follow any guidelines regarding grace periods or late fees. Also, be aware of any state or local laws that apply to late rent payments to ensure you stay in full compliance.
Discuss the issue with your tenant.
While a missed rent payment may result from a tenant’s carelessness or antagonism, it may also be an innocent mistake. Having an open, respectful conversation with your tenant can determine the cause of the late payment and the best path forward. If your renter is struggling due to extenuating circumstances (family emergency, job loss, etc.), consider working out a payment schedule. Just make sure you document any agreement outside lease terms and include the signatures of both parties.
Deliver a written reminder.
A written reminder typically isn’t required following a missed rent payment. But it may help your tenant and demonstrate your good faith in your effort to notify him of the missed payment. The document should include the original due date, the amount due (including any late fees), and the new payment deadline. You can deliver the reminder in person, by e-mail, or tape it on the unit door. Be sure to keep a copy in your records for future reference.
Serve a pay or quit notice.
If more casual check-ins and reminders don’t produce the missing rent payment, you may have to take legal action. A pay or quit notice is more official than a written reminder and is the first step in an eviction proceeding. The notice must clearly convey the amount owed, the payment deadline, and the landlord’s intent to evict in case of non-payment. At this juncture, consult an eviction attorney since many local laws specify when and where to deliver a quit notice. Laws also specify how long a landlord must wait before filing a claim. When moving toward a court case, document everything in writing. Be cautious of accepting any partial rent payments that might result in complications or delays.
No matter how you choose to respond to a late payment, make sure your actions are calm, prompt, and consistent. Listen to and treat your tenant with respect, but don’t be afraid to demonstrate that you take lease terms seriously.
About Rentals America
Rentals America provides full-service property management for residential rental properties. Our team is wholly dedicated to property management, and we’re here to help landlords navigate the rental market.
