If you own a rental property, you know how crucial it is to receive on-time rent payments. However, you may get a tenant here or there that doesn’t pay on time–or at all. These situations are frustrating, but handling them the right way is important so you don’t face legal trouble as a landlord. Today, we’re going over when rent is typically due, whether or not you should offer a grace period, and how to handle tenants who don’t pay rent.
Main Takeaways:
- Clearly Define Payment Terms: Ensure your lease outlines rent due dates, grace periods, and penalties for late payments to avoid confusion.
- Communication and Flexibility Are Key: If rent is late, promptly communicate with tenants and offer payment solutions, such as payment plans, to maintain a positive relationship.
- Know When to Take Legal Action: If rent continues to go unpaid after efforts to resolve the issue, issue a Pay or Quit Notice and consider legal eviction as a last resort.
Contents of This Article:
- When Is Rent Considered Late?
- What to Do When Tenants Don’t Pay Rent
- Avoid Late Payments With Property Management
When Is Rent Considered Late?
Washington, DC, property managers know how important rent payments are. Without rent payments, rental owners lose out on precious profits. As such, your lease should state when rent is due each month and how to pay it.
Most landlords choose to have rent payments due on the first of every month. If the rent is paid later than the first, it’s generally considered late. However, there may be a few instances where rent isn’t paid on the first but is not considered late. For instance, weekends and holidays may be exceptions as long as the tenant pays on the next business day.
Depending on which payment methods you accept, rent checks can get delayed by mail. Your tenant may put their rent check in the mail by the due date, but it could be delivered a few days later. If your tenant can prove that they sent it on or before the due date,
As a landlord, you may also choose to have rent due on a different day, such as the 15th of every month. Either way, it’s important to include your expectations in the lease agreement so that you and your tenants are on the same page.
Should You Offer a Rent Grace Period?
A grace period is a window of time after the rent is due, during which tenants can pay without penalty. Some state or local laws require a grace period before charging late fees. However, some landlords decide to give their tenants a short grace period if they miss the rent due date for any reason. After all, it’s a good way to give your tenants a bit of leeway whether they miss their rent payment on accident or they’re waiting for their next paycheck.
Generally, a grace period is five days, although landlords can choose how many days they want as long as no laws require a specific amount of time. If the grace period is up and the rent still isn’t paid, it’s considered late.
What to Do When Tenants Don’t Pay Rent
When a tenant doesn’t pay their rent on time, it can be extremely frustrating for a landlord. After all, most landlords count on that income to pay for their mortgage loans, taxes, management expenses, and more. So, when it’s missing, it can be detrimental. But how do you handle tenants who don’t pay rent? Here’s what you can do as a landlord.
- Check the Lease Agreement
- Send a Late Rent Notice
- Communicate With the Tenant
- Offer Late Payment Solutions
- Send a Pay or Quit Notice
- Take Legal Action
Check the Lease Agreement
Before taking any action, review your lease agreement to fully understand the terms you and your tenant agreed upon. Your lease should state the rent due date, any applicable grace period, and penalties for late rent payments. You may also include legal procedures for late payments or nonpayment of rent. Reviewing this information ensures you comply with applicable laws and avoid unnecessary disputes.
Send a Late Rent Notice
If the rent is late and the grace period has passed, the next step is to send a formal Late Rent Notice to the tenant. This official notice serves as a reminder that rent is due and should include the amount owed, any late fees, and a reminder of the deadline for payment to avoid further action. That said, it’s important to send this notice as soon as the rent is late to avoid disputes or issues later on.
Communicate With the Tenant
Once you issue a late rent notice, you may want to reach out to your tenant to clarify any misunderstandings. For instance, they may have just forgotten to pay rent, or perhaps they’re facing a financial crisis. Some landlords may be willing to negotiate a payment plan or rent assistance for tenants struggling to pay rent. Either way, speaking with them directly can help resolve the issue sooner and maintain a positive landlord-tenant relationship.
Offer Late Payment Solutions
If your tenant is having financial difficulties, consider offering reasonable solutions to help them catch up. While it’s still important to receive your rent payment, being flexible can benefit both parties, especially if your tenant has always paid rent on time. For instance, you can allow them to split the payment into smaller amounts over a set period. You may also decide to waive their late fees to alleviate some stress and potentially get your payment faster.
Send a Pay or Quit Notice
If you’ve sent a late notice and done your best to work with your tenant, but their rent is still late, you may need to send a Pay or Quit Notice. This formal notice gives your tenant one last opportunity to pay their overdue rent or vacate the property by a certain date. Depending on local laws, this notice gives them 3 to 7 days to make a decision. That said, it’s important to follow your state’s laws about eviction notices to avoid your own legal trouble.
Take Legal Action
No landlord wants to go through the eviction process. However, if your tenant continuously fails to pay, even after receiving a Pay or Quite Notice, the next step is eviction. This involves filing a formal eviction notice with your local court and providing your lease agreement, payment records, and notices sent to the tenant as evidence.
Avoid Late Payments With Property Management
Sometimes, late payments are unavoidable. Tenants aren’t always perfect–they may accidentally forget to pay or have financial issues that prevent them from paying on time. Either way, there are things you can do as a landlord to avoid late rent payments. For instance, you can send monthly rent reminders, offer incentives for early payments, or a rewards program for paying on time each month.
Need More Advice? contact us today!
If you’re feeling stressed about tracking down rent payments or going back and forth with tenants about why they didn’t pay, enlist the help of BMG! We handle the day-to-day tasks so you can focus on other aspects of your business! Bay Property Management Group offers comprehensive rental management services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC. Contact us today to learn more.
