When Rent Collection Fails: 6 Steps When a Tenant Doesn't Pay Rent
Osprey Property Management | November 2022
While all property investors would like a stress-free owner-resident relationship, sometimes it's not always possible, and renters may stop making rental payments.
When you're having issues at rent collection time, it's essential to understand that it could be due to several reasons ranging from a pure accident to financial troubles. Luckily, there are several avenues open to you to rectify the situation.
Understanding what to do when a property resident stops paying rent will help you solve the situation effectively and amicably. After all, keeping happy long-term residents is the end game.
This blog looks at the processes and steps to take when a resident doesn't make rent payments and a tip to ensure this situation is managed (or avoided altogether).
This due date is commonly the first day of every month. However, as a property owner, you can set the rental date for whichever day you choose. You can also decide on a rent collection plan. For example, most property managers collect rent onlinethrough transfers or platforms.
There could be several reasons why your residents may not be able to make rental payments, including:
Communication is the key, and in most cases, it's beneficial to give the benefit of the doubt to your residents to start. This is especially true if it is out of the blue for your renters not to be making payments.
Step 1: Re-Read the Lease Agreement and Check State Laws
If the resident stops paying rent, you may want to review the lease agreement to confirm the dates, grace periods, and penalties, especially if it's been a while since you checked the agreement or the renters have been long-term.
Grace periods and late fees may vary, depending on your policies and the property's location. In addition, there may be emergency relief legislation in place, for example, the federal moratorium on eviction that was in place during the Covid-19 pandemic.
Step 2: Make Initial Contact by Phone
Give your residents a friendly call to notify them of outstanding rent or to find out what is happening. If the calls aren't going through or the resident has made no assurances that rent will be paid, move on to Step 3!
Remember that too many calls or aggressive language or tone can be considered harassment.
Step 3: Remind Your Residents Their Rent is Due
A text message or phone call is great, but a written document that can be timed, dated, and recorded is even better! If the rent is late, send your residents a friendly reminder in the form of a notice.
In the notice, don't forget to include the following:
The date the rent was due
The outstanding amount
The number of days that passed since
The days remaining before legal action may be taken
Deliver the notice in person instead of relying on an email that could get "lost."
Step 4: Deliver a Pay or Quit Notice
A Pay or Quit notice is the first step in the eviction process. It notifies the residents that they are in violation of the rental agreement.
A Pay or Quit notice informs your resident that they have three days to pay the outstanding rent or vacate the property.
Step 5: Continue the Eviction Process
If the resident still won't pay rent, it's time to continue eviction.
The case will go to trial, and the court will make a decision. As a rental property owner, you are entitled to seek damages for court costs, damage to the property, and other costs associated with the period of occupation or losses.
In general, this process can take about thirty days.
Step 6: Hire a Property Manager
Managing residents, negotiating difficult financial situations, and collecting rent can be some of the most challenging parts of owning rental properties. A top Hampton Roads property manager improves the collection system, ensuring it's online, legally, and fairly deals with any late payment solutions.
The best property management Hampton Roads offers can help you with every aspect of property ownership in this area.
Keep On Top of Rent Collection to Avoid Late Rent
When residents stop paying rent, it can be tough to know what to do. Luckily, there are steps available to property owners to resolve the issue amicably and thoroughly. However, if you're worried about rental income issues or want to avoid the problem altogether, consider contracting Osprey Property Management.
We are a full-service property management group ready to help with every step of the journey, from acquiring quality residents to rent collection. We're also prepared to go ahead with eviction proceedings in worst-case scenarios. Reach out today to discover how we can protect your assets and ensure your financial success as a property investor.
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