If you are a landlord, this will happen to you. The first thing to do is to mentally prepare yourself for this happening. It is a cost of doing business. That doesn’t mean to simply accept it and let it go. It just means you need to understand that it will happen and be prepared.
It Starts with Tenant Selection
Captain Hindsight here. When you are screening your tenants, make sure you actually screen your tenants. Don’t just do the stuff and then say ‘well, it’s probably ok’ when the tenant has a violent criminal felony or an eviction in the history. Make sure you have a rock-solid screening list of criteria and stick to it. Turn away that bad tenant as they will cost you much more money than the month it takes to find a good one.
Get a Good Lease
If you have a lease you wrote by hand or inherited, then get the tenant upgraded as soon as possible. This is usually when the current lease goes month-to-month but if the tenant agrees, you can both sign a new lease that nullifies the old one. This new lease should be created by a local attorney who has experience in this area. These leases are relatively cheap, especially compared to having a bad eviction. They can protect you when the time comes that your tenant fails to pay the rent.
Give Notice Immediately
Your tenants need to know that paying the rent on time is not negotiable. Usually you will have a due date and a grace period. Once the grace period is expired, the rent must be in your hands or it is late. You might enjoy getting the late fee, but continuing to allow this runs the risk of the rent coming later and later and then suddenly not coming at all and now they’ve been there for a month with no rent payment. That’s a tenant who will be leaving soon, and not on good terms.
Giving them notice is different by state. It is usually a single page that says that they are being given notice that they must vacate the unit within 3 or some other number of days. This may sound like a strong first move, but it gives a no-nonsense and easy to understand statement. You can always rescind that notice by doing nothing else (should they get the rent plus late fees paid). That notice starts the clock on being able to evict and it gives the tenant the understanding that this is important.
Don’t Accept Partial Payments
Evictions go through most cleanly if the infraction is nonpayment of rent. Everything else risks a he-said-she-said situation and risk of failing to successfully evict. Tenants are usually given time to remedy the infraction before they are thrown out. The timeline is strict and most jurisdictions put the onus on the landlord (who they think should know more of the law) to follow the timeline. If you miss any deadline or fail to submit any form, the timer starts over again. Accepting partial payments can do this.
If you take 1/4 of the month’s rent with a verbal promise to pay 1/4 weekly, you will reset that clock and set a precedent that you have agreed to accept these small amounts. That makes more work for you to collect rent and more difficult to argue in court that the tenant was not following the lease, because you both weren’t following it. This also goes for accepting rent that omits any late fees accrued. I know it’s hard, but unless you are willing to agree that late fees are unimportant then don’t accept the partial payment.
Document any interaction you have with the tenant. That’s phone, text, email, talks on the sidewalk, or anything else. Try to limit these interactions to text, email, or hard copy, things that can be verified later. These things will be important if you have to argue your case in front of a judge. In fact, this is one of the most important things to do, and one people most likely get lazy about.
Always treat the tenant respectfully and professionally. I know it is hard sometimes to not start yelling. Don’t abuse your ability to unlock and enter the unit. Don’t throw their stuff out. Don’t lose your cool at any time. Remember, tenants will fail to pay rent and this is an unfortunate but normal part of being a landlord. Keep your composure and remain fair. Try to find a way to help them out if you can. Get any agreements in writing. Stay firm.
Treat Everyone the Same
It’s tempting to shake things loose with your problem tenant. You might want to annoy them with not doing repairs. You may wish to turn off the electricity. Don’t do any of these things. In some cases they are illegal. You should continue doing everything normally, including repairs to the unit – this is for your benefit, not the tenant’s.
Don’t make any concessions for any particular tenant, like agreeing to take rent one day later, or wave late fees, unless you are willing to do this for every tenant. Feel free to use this argument with the late tenant: “I would have to do that for everybody, and then the bills wouldn’t get paid, and then there would be no place to live for anyone.”
Begin the Eviction Process Early
I know this is expensive, but most attorneys will bill you only for the time they work on your case, even if it gets dropped because the tenant got their bill up to date. Get that timer started because it takes a lot of time to actually get your court date. Remember all the rent you are losing by waiting around hoping they will pay.
Your tenant may actually be a great tenant and have fallen on hard times. Make the effort to talk with them and find out the cause. Perhaps there is something you can do to help them and help yourself. It will feel really great to help someone get back on their feet. This doesn’t mean free rent. Maybe you could set up a payment plan. Maybe there are some rent assistance programs you can help them get on. You never truly know the other person’s situation. Taking a moment of compassion, not charity, might help you both.