How to Deal with a Tenant's Late Rent Payments

Late rent payments are commonplace, unfortunately, whenever you are leasing to a third party. Even those individuals with every intention to pay can be forgetful. While most landlords are forgiving of an occasional payment that is just a few days late, you may find issues with a client who is delayed in payments for weeks at a time. The key to dealing with this problem is anticipating it. Plan ahead with a proper rental contract, and use the contract whenever you need a solution.

Set a Payment Date

The key to avoiding late payments is including in the rental agreement an exact day of the month when payment is due. In the same paragraph where you list the cost of the monthly rental, you should explicitly list the date of the month when the payment is due. This provision may list a special consideration for whether the check needs to be post marked or received by the expressed date.

Set a "Late" Payment Date

Most landlords, like most lenders, do not enforce a "zero tolerance" policy with late payments. Instead, they provide for some type of small grace period. This grace period is always defined. A tenant should know exactly when "late" turns into "missed." 

Enforce Late Payments

If a tenant is beyond the grace period provided for in the loan contract, allowing the tenant to "slide" is a bad idea. There is nothing stopping the tenant from doing the same thing again. In addition, if you do try to enforce the late payment in the future, the tenant may have grounds to argue with the enforcement based on your lack of enforcement in the past. It is up to you how you elect to enforce a late payment to some degree. In most cases, a fee is charged. This must be written into the contract.

Notify Appropriate Legal Outlets

If the payment goes on beyond a reasonable amount of time, you will want to notify the city or municipality that will enforce the rental agreement. The municipality will have to be involved if you ever do have to evict the tenant. It is easier to go through with this type of process if the authorities have been notified early instead of asking them to take a role during the final steps. In fact, it helps if you, as a landlord, build a relationship with the local authorities in order to gain their assistance in the future. 

Know the Law

Ultimately, it is not up to you alone how to handle a tenant's late payments. The laws of your state protect both landlords and tenants, so your tenants have a legal right to fair treatment. By understanding this right, you will know just what you can do in order to enforce a late payment. For example, you may have to give a tenant written notice and wait 30 days for a response. In another state, you may have to provide several notices prior to seeking eviction. Unfortunately, there is little you can do to collect from a tenant who did not pay other than filing a claim in court. However, you can at least remove the tenant and replace him or her with a paying tenant.

blog comments powered by Disqus