What To Do When Your Tenants Stop Paying Rent?
Being a landlord can be difficult at times, especially when a tenant stops paying their rent. It's important to know what to do when this happens, and you have a plan to address the situation with the tenant.
Your plan should not be to immediately file for an eviction!
Filing for an eviction should not be the first thing that comes to your mind because it can be a costly and time-consuming process. You have other precautions set in place before you have to evict the tenant. Filing for an eviction should be the last resort and should be done as soon as it is imminent.
1. Send A Late Rent Notice With Late Fee
Depending on your state, once the grace period for a tenant to pay their rent has expired, you should immediately send the tenant a late rent notice. It is very typical for most states to give tenants 3-5 days until a payment is documented as late. However, once that time is up, the landlord can send over the late rent notice and add a late fee to the rent payment.
You must send this late rent notice just in case an eviction is necessary for the future. The late rent notice is the first step in the eviction process, but if the tenant pays the amount due, an eviction is unnecessary. It is also important because if you do have to go to court, you will have to show proper documentation showcasing exactly when the tenant was late with their rent.
Documentation is key as a landlord!
In some cases sending the tenant, a late rent notice would be enough to remind a tenant to pay the rent plus the additional late fee, but that is not always the case. Don't be surprised if you have a tenant who regularly pays their rent after you send them a late rent notice with the late fee. As a landlord, this can be annoying even though you get additional money due to the late fee.
2. Send Pay or Quit Notice
If the tenant does not respond to the late rent notice, then the next step is to send a pay or quit notice to the tenant. This is the next step in the eviction process. It makes the tenant aware that you intend to evict them if the money owed is not paid by said deadline.
This may be a good time to bring in a lawyer to help formalize this document, but you can also ask other landlords for assistance as well. You need to make sure you are following all the local laws and guidelines if you are planning to move forward with an eviction. It is best practice to send this notice via email and attach a paper copy to the residence door or mailbox.
If the tenants address the pay or quit notice with a full payment of the rent plus the late fee then an eviction is not needed. However, if they do not pay within the time frame established by your local laws, it will be time to officially file for an eviction in court.
3. Get An Eviction Lawyer
The process of getting an eviction can be time-consuming and costly. It is definitely recommended to get an eviction lawyer the first time you go through this process. An eviction lawyer will ensure you are staying within the boundaries of the law and properly documenting each encounter with the tenant.
When the pay or quit waiting period has expired, then it will be the time to officially file a tenant-landlord complaint at your local court. You will be asked to present appropriate legal documentation throughout the process, so you must document the entire process and have every transaction in writing. During this time, it is probably best to limit communication with the tenant and only contact the tenant when it is required for the eviction process.
Do not try to push the tenant out by moving their personal belongings or cutting off utilities doing the eviction process. This practice is illegal as a landlord and could result in the tenant taking legal action against you.
Once the eviction is final, after a few weeks, or maybe even months, the court will issue the next steps for the tenant and you can start finding another tenant to replace the past one.
Solution
Screen your tenants! Tenant screening will help you find individuals who have a record of being a good tenant or have the potential to be a good tenant. During the tenant screening process, investors should look at:
Credit History
Current Income Verification
Criminal Background Check
Employment History
Rental History
Eviction History
These elements will help you decide whether you should rent your property out to a tenant. Ensuring you accept great tenants upfront can mitigate the risk related to a tenant not paying their rent.