What To Do When A Tenant Is Having Difficulty Paying Rent?

Tenants paying late is a constant problem. Whether you are a large company or just managing a few units, you have probably experienced this issue. I always hear the horror story of a tenant not paying rent for two, three, or six months.

I always wince because I know they are true, but it happens because very common mistakes people make when posed with this issue. Most tenants who are late have an excuse for being late and will pay. Some excuses are more believable than others, but either way, you should be keeping a watchful eye on who starts to pay late frequently whether you believe their excuses or not.

If you have a tenant paying late, we advise you to look at the situation individually and tailor your approach to this specific situation. Some of your tenants will communicate very well, and some will not. Communication is key so if repeated attempts are made with no communication, use a 3 Day notice to start the communication. This should be done pretty quickly because you need to be able to communicate with the tenant to assess their financial situation.

Most late payers won’t get this far, but you should be prepared to act quickly when it starts to get past 2 or 3 days late. When it gets to that point, you must ask yourself a few questions. Does this happen a lot? Are they good tenants and neighbors? Also, do they have a clear timeline of when they can pay, and their reason for not paying makes sense. All these answers should provide you with a guideline on how much more flexibility you can provide.

The next step is setting expectations for your tenants. The tenant needs to give you a clear timeline of payment. If the tenant’s timeline isn’t acceptable, you need to let them know and provide them with a set date to get their rent to you. If a timeline is agreed on, the tenant is expected to make payments on those days. If the tenant does not pay on the agreed days, then this should severally impact their credibility, and they should definitely provide a 3-day notice if one hasn’t already been provided.

During the process, you should insist on communication if anything deviates from the agreed-upon timeline. A tenant who keeps me up to date with their situation is a tenant I am more willing to trust. The next step is to know when to start the eviction. You should set time limits for yourself and let the tenant know. 

These time frames should be decided beforehand so that you can’t be tempted to provide more leeway to a tenant who has pushed it to the limit. As a general rule, a tenant should never be allowed to get more than one month behind without an eviction being filed. As a management company, our policy is stricter than that, but when speaking with owners who manage their own units, 30 days is a commonly used time frame for making that decision.

Evictions are not a fun thing, plus you could waste a day in court and be out legal fees if an attorney is used – which is highly recommended. These are all valid reasons to avoid doing them. But waiting too long to remove a tenant won’t mitigate those problems and will cost you additional rent in the end.

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