If the purpose of an investment property is to provide an income for the property owner, then it can be an entirely frustrating situation when a tenant becomes delinquent on his or her rent. What can a landlord do with an unruly tenant?
In most cases, landlords turn to the legal system and begin the process of eviction. However, evicting a tenant in PA can take two or three months—even longer in some cases. Are there alternatives for handling a bad tenant list?
How to Evict Someone Who Doesn’t Pay Rent
The eviction process in PA can be started as soon as the tenant fails to pay their rent on time—as soon as the day after it is due. Landlords do not have to file a late rent notice before filing a Notice to Quit, which provides the tenant ten days to pay the balance in full or vacate the property. This notice can be handed personally to the tenant, taped to the property’s door, or posted in a common area where the tenant will be sure to see it. If the rent is not paid and the unit is not vacated within the ten-day limit, then a landlord may proceed with an eviction.
This process can be unappealing to many property owners, especially if it is drawn out for several months. First, there is usually no rent being collected for the property or apartment unit during this time. In addition to the lost income, attorney’s fees and court costs can add up to $1,000 in additional charges. In other words, evictions are costly.
Another reason some landlords prefer to handle a lease break in a different manner may have to do with their compliance. If the owner’s rental license is not up-to-date or was never acquired, if Philadelphia property owners do not have a current lead-based paint inspection (if applicable), or if Philadelphia tenants did not receive a suitability certificate and/or Partners in Housing pamphlet, for example, the landlord will be unable to use the legal system to pursue an eviction.
What is Cash for Keys in PA?
The phrase “cash for keys” refers to the idea of offering a delinquent tenant money to move out of their unit and terminate the lease. Often, the amount proposed may be equal to the security deposit, a month’s rent, or another enticing cash figure. For some property owners, offering cash can seem like a good idea as it’s likely to be substantially less than the total amount of eviction costs plus the rent lost from a unit that cannot be leased again until it is vacated.
As long as the landlord and tenant agree to the terms of a cash for keys agreement, the process is not illegal. The landlord will still need to ensure the tenant is completely out of the property, and the property is completely secured. Even though the cost may seem less in the long run, it is not recommended that property owners take this route. There are other ways to work with wayward tenants that can result in a more favorable outcome for the landlord while also not encouraging tenants to hold out for a cash reward for failing to pay their rent.
Better Options When Rent is Delinquent
If you have a tenant who is behind on rent, but you don’t want to go through the eviction process for any reason, there are a couple of options to try to negotiate with the leasee that does not involve cash payments. The first is to offer the tenant a lease break without an additional penalty. This will not erase their current debt but can provide a path to reaching an agreement for the tenant to leave the property. The landlord can use the security deposit and last month’s rent to cover any past-due charges, and any remaining balances would still need to be paid by the tenant. This process will benefit both parties as the landlord will still collect money that is owed and have the unit vacated, and the tenant can avoid an eviction on their record.
If the current tenants refuse this offer, the landlord can keep negotiating to reach a deal that works best. For example, you can offer to keep any deposits already collected, but agree not to pursue any previous balances that deposits do not cover if the tenant agrees to move out without further delay.
Maintaining the Advantage
In every rental agreement, the best-case scenario is for tenants to stay current on their payments and for landlords to fulfill their obligations to those renting the property. For landlords to be able to keep their side of the agreement and make use of legal paths to removing delinquent tenants, all property owners must be in compliance with all state and local laws, regulations, and ordinances. As long as they are compliant, landlords should always remember that they are not obligated to provide an easy exit for a tenant who refuses to pay.
If negotiations have been offered in good faith and the tenant still refuses to pay up or move out, it is time to start the eviction process. Once an eviction order is received, property owners can file with a collections agency that will pursue any balances owed using every legal means possible, including wage garnishments.
At Bay Property Management Group Philadelphia, we do not get into these situations with tenants, and we would never advise a landlord to reward bad behavior with a cash prize to vacate a property when back rent is owed. Instead, we ensure that all properties and their owners are always fully compliant and that we can file for eviction whenever a tenant is behind on rent, and an agreement cannot be reached.