How to Handle Late-Paying Tenants

By Danielle Wirsansky on November 15, 2018

You have a property, one that is in good shape and has no one living in it. You need to be able to afford to pay to upkeep the property if you want to keep it, even if you are not living in it yourself. So, you find yourself some renters. They become your tenants and in turn pay you rent in order to live in your property. They pay you, you pay the bills, and the world goes round.

Right?

At least, that is the way it is supposed to be. The tenant/landlord relationship should be a very simple relationship. You are providing them with a product that is a necessity— a home— which people all around the world pay to have every day. Yet a lot of the times, there can be difficulties achieving what should be a basic transaction: having the rent paid on time.

via Pexels.com

Sure, sometimes there are issues that arise that are out of the control of either the landlord or tenant that make paying rent late inevitable, though very rarely. But when a tenant is late on rent, it can really strain the renter/landlord relationship.

There are many horror stories out there about tenants who snowballed paying their rent late into full-blown catastrophes.

One example from Reddit was of a London landlord who rented their apartment to a couple that seemed like good people and paid their rent on time and without reminders. However, partway through their lease, the woman got pregnant. She quit her job and without that second income, the couple could no longer afford to pay their rent. The couple immediately became monster tenants upon the landlord requesting the rent be paid, changing the locks to the property and refusing to maintain any contact with the landlord. It took eight months for the landlord to get the law on their side in order to evict the couple, who made the wound even deeper by destroying the apartment as they left it. The landlord, on top of all of this, had to pay for the mortgage themselves as well as shoulder all these extra legal fees.

And when you are a property owner in a college town, and you have mainly college students as your renters, the perils can be even higher. College students are infamous for being poor and often have to rely on other sources, like their parents or financial aid, for the income needed to rent their homes. And because they are students, it is often the first time they are living on their own. They are not as responsible as more established adults and may not realize what a big deal paying their rent late is. And with how busy they are, juggling school, homework, and the work needed to keep them financially afloat, they can often forget about deadlines and important dates to make payments by.

So how can you help your tenants avoid being late when paying their rent? And how can you make sure that in the end, you will be paid by your tenants? Read on to learn some tips on how to handle late paying tenants.

via Pexels.com

Screen Tenants

The best way that you can avoid having late paying renters is simply to screen potential tenants before you allow them to move in. You want to know about who this person is and where they are in their life before you allow them to move into your property.

Sometimes potential tenants have sad stories or reasons about why they need to move immediately, as soon as possible, right now. And in order to move them that quickly, you would have to forego the screening process. Sometimes those sob stories are true. But sometimes, they are most definitely not true and unfortunately, you have to protect yourself against some of the cruel and strange folks in this world who would try to take advantage of you.

One frustrated landlord shared this story with the National Association of Independent Landlords. “I leased my home to a tenant who promptly defaulted on her lease. When I went to the property to see her, I discovered she was stealing my appliances. I called the police to come and stop her from taking my washing machine. When the police arrived the tenant said I was trespassing on her property and she did not know who I was. I insisted that I owned the property, but the police did not believe me. They told me if I did not leave the premises they would arrest me. So, I sat in my car in disbelief while I watched my tenant steal my appliances from MY HOUSE!”

But maybe your property caters to less flashy renters, namely students. As mentioned before, student renters can be awesome if you own a property in a college town because there are simply so many of them—they have to live somewhere, and it might as well be your property! But students can be unreliable. Maybe they have already tanked their credit score with some stupid choices. Maybe they are not holding down a job while they go to school. Do they have someone in their life willing to be their guarantor? As students, they may not make much money—are they the ones paying the rent or is it their parents? Have they taken out loans or do they receive financial aid that they rely on in order to pay those bills?

Beyond screening potential tenants, you also need to screen them thoroughly. You do not want to judge all students equally because some students can be really awesome tenants. Reliable, trustworthy, and who pay their rent on time. And sometimes, even the best of judgment can fail you.

Another landlord shared this story: “A nicely dressed man came to rent my property. He drove a very nice car and said he had a good job. When I asked him if I could run a background check on him, he said his wife had recently died and he wanted to rent now! He flashed a lot of cash and I agreed. He never paid rent again, after the first month. When I started to evict him, I found out he filed bankruptcy. By law, he did not have to pay me rent while he was in bankruptcy court. I was considered a creditor. He lived in my home for seven months without paying a dime. I still had to pay my mortgage. I found out later, he had done this repeatedly.”

You can avoid all of this kind of drama by simply screening tenants before you allow them to place a single toe on your property.

There are many great software programs too, like Avail, that will help you to thoroughly screen your potential renters and know that you are making the best choice possible. “Almost all… situations could be avoided with proper renter screening procedures, background checks and looking for some tell-tale danger signs in the application process,” says Avail.

Infographic by Danielle Wirsansky

Communicate Clearly

This seems like an obvious tip, but what seems like clear communication might not be such clear communication to your tenants. How often do you need to communicate? Why should you be communicating that frequently? Unless something is wrong with the apartment, renters should simply be paying their rent on time without needing to be reminders or without rules being put in place.

That is how it should be, how it would be in an ideal world. But sadly, most of the time, the world does not work like that. While it is not *really* your job to mother your tenants, to send them reminders about when their rent is due or reminders about when they are about to be hit with a late fee because they have not paid their rent, it really does help.

A landlord, Sue, from California, said “I really resisted reminding people to pay their rent at first, thinking I should not have to be their mommy.  But, the bottom line was that it was a lot more work for me to deal with late payments and additional bank deposits, etc., etc.  It ended up being easier on me to send a reminder text every month.  And yes, some depended on it, but several thanked me for doing it.”

Aside from reminders and little check-ins with your tenants, you can also just make sure they really understand how and when the timeline to pay their rent works. Say it is due on the first of each month. Does this mean that it is due by 11:59 pm of the night before and once the clock strikes midnight and the first day of the new month rolls around, their rent payment is late? Do they have until business hours (5 pm) on the first day of the month? Do they have until 11:59 pm?

Or, do you have a late rent paying policy for renters? This could be that while the rent is due on the first day of the new month, it is not technically late until the fourth day of the month. If you as the landlord do not receive the rent by then, do you then give a final warning? And then 24 hours after that, they get slapped with a late fee? Do you even have a late fee associated with paying rent late? Whatever your system or process is, make sure it is absolutely clear and understandable. And then make sure that it is absolutely communicated clearly to your tenants so that they can stay on top of it, while you know that you have truly done everything in your power to make sure that your tenant understands the rules and regulations and can get their payment submitted on time as well.

Be Understanding

As also previously discussed, sometimes crap happens. There is a death in the family. Someone loses their job. They were in a car accident. We get it. Life happens and nothing is ever quite as expected nor could events be predicted.

So maybe your tenant was a few days late paying their rent this month. Communicate with your tenant. See what is going on with them. Is this the first time this tenant has ever been late paying rent? Did something big happen in their life that is really affecting them that you were unaware of? Are they upset at being late with their payment or frustrated?

When the situation calls for it, go with your gut. Be understanding. When you see that the situation is not the fault of the tenant and the situation is unlikely to happen again, be understanding.

In relation to student renters, landlord Sue talked about she could make particular allowances for circumstances outside the students’ control, like waiting on financial aid to drop. “…for the students relying on financial aid that was late… they could show me the financial aid letter or get the financial aid dept to send me an email saying the payment was late, but was coming [to get a free pass on a late payment].”

This will go along way in helping you to make a stronger relationship with your tenant, keep them communicating with you, and keep them renting your property longer, which just means more money for you in the long run.

Stand Your Ground

On the other hand, you also need to know when the time is right to stand your ground. You cannot allow your tenants to walk all over you otherwise you might never get paid. Your property might even be damaged, you might owe exorbitant legal fees, and lose income paying the mortgage on the property since the renters were not paying by the end of the ordeal.

Be firm. Make sure there are rules about when rent is due, how to pay it, if there are late fees, and when tenants will be slapped with them when not paying. These rules not only protect you and your property but help make sure that your tenant does not purposefully or inadvertently take advantage of you. Protect yourself.

Being a landlord can be a tricky business. But by following these tips, screening tenants, communicating clearly, being understanding when the time calls for it or being firm if necessary, will help you to make the whole rent paying process smoother, more streamlined, and less stressful.

By Danielle Wirsansky

Uloop Writer
Florida State University
Danielle Wirsansky graduated from FSU with a BA in Theatre, a BA in Creative Writing with a minor in History, and an MA in Modern European History with a minor in Public History. While a graduate student, she served as the Communications Officer for the History Graduate Student Association and President/Artistic Director of White Mouse Theatre Productions. She studied abroad in London, England for the Spring 2015 semester at FSU's study center for the Playwriting Program and interned for the English National Theatre of Israel in Summer of 2015. Her first musical, City of Light, opened as part of FSU's New Horizons Festival in Spring of 2016. She has also won the MRCE and URCAA Research grants from FSU. In the past, she served as the Marketing Director for the FSU Student Theatre Association, the intern for the Holocaust Education Resource Council, and the research assistant of Prof. Nathan Stoltzfus. She has previously written for Context Florida (Contributing Writer), USA Today College (Contributing Writer), Sheroes of History (Contributing Blogger), No(le)Reservations (Contributing Blogger), Female, Reloaded (Arts/Entertainment Editor) , I Want a Buzz Magazine (intern), Mandarin Newsline (youth arts update columnist), Distink Designs (Guest blogger), whatscheaper.com (associate editor), escapewizard.com (associate editor), Spark TLH (Contributor), the Tallahassee Democrat (contributor), Elan Literary Magazine (Head of Marketing), and the Improviser Newspaper (Opinions Editor). Danielle has been lucky to be writing for Uloop since 2015 and to have served as the FSU Campus Editor since 2015.

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