Letter of demand
Most landlords in our area have their residential leases set up so rent is due on the first and late after the fifth of each month. That scenario means that on the sixth of the month, a letter of demand should be issued to any tenant who has not paid. This letter is often referred to as a “pay or quit” letter, and it 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 $1000.00 in unpaid rent. (This sum includes your late monthly payment of $950.00 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.
Please know that it is not our wish to evict. Eviction is a lose-lose proposition for both of us. You will have an eviction on your permanent record, and we will have to deal with an unexpected vacancy. This is why we hope you take immediate steps to remedy this problem.”
Tradition suggests that you use certified mail to have this letter delivered or tack it to the front door, but you can deliver the letter in any way that you and the tenant have agreed to in your lease. In ours, for instance, we can send it via mail, hand deliver it, email it and even text it. We love text and email because they’re time and date stamps for when it was sent and received, which is a great thing should you have to go to court.
Now notice what our pay or quit says. First, it lets the tenant know what their violation was. (They didn’t pay.) It then lets them know how much they need to pay in order to bring their account current. It tells them how long they have to do so and then what happens if they do not comply. Finally, our last paragraph lets the tenant know that eviction is not something we want to do. Instead, we would prefer them to fix the problem.
The reason this letter is called a pay or quit is because you are telling the tenant they have two options: pay what they owe or quit and move.
The pay or quit is the most frequently used letter of demand for landlords because nonpayment tends to be the most common lease violation. Consequently, this particular letter has coined its own name. But I want you to realize that a letter of demand and a pay or quit are not synonymous, but rather a pay or quit is just one type of demand letter.
This fact is important because a letter of demand is the tool you should use to inform a tenant of any and all lease violations, whether the violation is malicious or not.
Letters of demand are valuable for lots of reasons. First, they let the tenant know they are in violation of their lease and how you expect for them to remedy the violation. They also let them know what the consequences are should they not comply with the instructions you just gave. And they give those instructions in written format which keeps any he-said-she-said scenarios from occurring. This is important should you have to go to court.
We have issued letters of demand for many reasons. For instance, we require in our lease that a new tenant fill out and return a move-in inspection sheet within a specified period once they move in. We had a tenant once who didn’t return the inspection sheet and then ghosted us when we contacted them about it. We issued a letter of demand telling them they had three days to get us that move-in inspection sheet or move from the property.
That got their attention.
But an eviction is not always the consequence. In our lease it says that if we notice any damage done by the tenant, we will notify them that they have 7 days to fix it to our standards. And if they don’t, we will hire a contractor to fix the damage and we will charge the tenant for the repair.
We recently had to issue a letter like this because I found some damage on a back porch when doing a routine inspection. And we issued one last week where one of the tenants had a huge pile of brush in the yard that needed to be gone. I spoke to each tenant in person about the issues, but we followed those conversations up with formal letters of demand to make sure everything went smoothly. And it did.
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.