Enough is too much
Rent is due on the first and late after the fifth of the month, according to most residential leases. On the sixth, a letter of demand should be issued to any tenant who has not paid. That letter should read something like this:
“Dear Mr. and Mrs. Tenant,
The purpose of the letter is to let you know that we did not receive your rental payment this month. This means you are in violation of your residential lease contract.
Your account is now delinquent in the amount of $850.00 in unpaid rent. (This sum includes your late monthly payment of $800.00 plus a $50.00 late fee.)
If we have not received your full delinquent payment in certified funds by 5p.m. on the ninth, you will need to move from the property. Otherwise, we will have no choice but to begin immediate eviction proceedings.”
Notice that this letter lets the tenant know how much they need to pay in order to bring their account current and also how long they have to do so.
If the tenant doesn’t pay by the ninth your next step is to file for dispossessory on the tenth of the month.
We don’t have to go this far often. We have good tenants who pay on time, take care of the property, are comfortable to work with and are good neighbors.
But this month, we found ourselves in court. We’ve had a tenant who hasn’t been paying by the fifth for a long time. But they always seem to pay us right at the deadline, or shortly after we file for dispossessory.
This is a hassle. On top of not paying on time, in the last few months they’ve become less comfortable to work with. So, when they were late this month, we said, “Enough is too much,” and we decided to go through with the eviction.
The judge said something in court that really got me thinking about a hole we have in our policy and procedures. He told us that by allowing them to pay up until the tenth as many times as we have, we’d set a standard that allowed for late payments.
He was absolutely right.
You see our policy and procedures don’t have anything in them about when “enough is too much” on late payments or how to even gauge that situation. You see, I erroneously thought we were buying favor with our tenants by being willing to work with them.
Don’t get me wrong: we don’t have tenants who get a month behind. That’s against our standards. But it’s obvious we’ve been allowing this one to stay almost a half a month behind.
So what do we do?
First, I think we are going to amend our lease to say rent is due on the first and late on the second. This will solidify in writing the precedence that we will be paid on time.
Next, we need to define what’s an acceptable amount of times a tenant can be late before we say enough is too much.
I can’t in good conscience say that if a tenant is late once, they’ll have to move. That’s because things happen to good tenants.
For instance, sickness is going around. One of our tenants got sick and put in for sick days at work. However, their payroll department added the sick time to the wrong check. Our tenant was proactive about it and let us know well before the first of the month that something was up. She asked us to move her ACH date and let us know she expected the late fees.
She’s a good tenant who’s not abusing our system.
So the question at hand is, “How to keep tenants from abusing our system?”
I think we’ll add a clause, kind of like a stop-loss, to our lease that says a tenant cannot be late twice during a one-year lease. If they are, they will be required to move from the property.
That should give leniency to a good tenant who had something come up while setting a standard that we don’t except habitual late payments.
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.