How to Discuss and Collect Late Rent with Your Tenants
Being a landlord comes with a lot of moving parts. On a daily basis, you may be called to get maintenance out to one unit while you’re setting up an appointment to show a different unit. All the while you have to stay on top of rent payments, which can be a mess in and of itself. While collecting checks and processing payments is one thing, having to worry about late rent or no-show rent is completely another.
Dealing with tenants who owe rent can be awkward and oftentimes stressful. Landlords are owed the money and should be expecting it without a hiccup in the system, yet there’s always someone on your roll who ends up paying late and violating rental terms. So, how should you as the landlord go about discussing and collecting late rent payments that you’re legally owed?
Review Rental History and Take Action
For tenants who have been with you for a decent amount of time, say, over a year, it could help to look at their payment history. A history with regular and full payments might point to a temporary hardship or even just a lapse in scheduling for the tenant. But for those who are typically late in their rent, they may require a more hands-on approach.
For an informal approach, you can start by getting in touch with your tenant by phone or email first. Visiting them in person is an option as long as you’ve already set up an in-person chat due to many state laws that prohibit an unannounced drop-by where asking for rent is the topic. Before any solutions are brought to the table, take their reasoning into careful consideration. Unexpected financial emergencies do happen, so talk it out with them to work out some sort of payment arrangements.
Be sure to give them the benefit of the doubt, especially if it’s their first late rental payment. This could be something temporary, so be sure to get to the bottom of what’s going on without prying too much.
For more formal actions, especially for tenants who have acknowledged their late payment and overdue rent, it’s time to ramp up your efforts and look over what rights you have as a landlord. You’ll need to make a past due rent request in writing and make sure they receive it, as well as document that you sent the request. These notices usually act as a first step toward ending a lease and evicting the tenant.
This notice should include the following (in order to comply with state laws):
- Tenant’s name
- Rental unit identification
- The months owed
- The total rent due
- Any late fees
- A payment address
- And landlord’s contact information
Invest in Rent Default Insurance
To keep from having to deal with major fines and fees for not submitting rent payments from your tenants, you can invest in tenant default insurance, which ensures that a landlord’s financial losses won’t harm them in a long-term capacity. Rent default insurance, which is meant to reimburse you for loss of rental income in the event of a defaulting tenant, is a financial backstop when the unexpected takes place.
Interested in learning more? Contact us or apply for an instant quote today!