Late Rent Notice
I need some advice on an awkward situation that has come up with our current tenants. Over the course of the last 1.5 years our tenants have often paid their rent late. Usually, this is no more than 3 or 4 days, but on occasion it has been over a week late (they do incur…
I need some advice on an awkward situation that has come up with our current tenants. Over the course of the last 1.5 years our tenants have often paid their rent late. Usually, this is no more than 3 or 4 days, but on occasion it has been over a week late (they do incur a penalty if the rent is more than 7 days late, but this is not what the issue is about.)
We have asked the tenants to let us know on the due date if they will be late with the rent. We live in a two family house and so are paying the typical costs of a residing landlord. Our request for them to give us a heads up is only so that we can make the necessary arrangements to cover the short-term decreased cash flow. However, our tenants feel that they are not obligated to do this given that the lease does not state that they are to communicate with us if the rent will be late. Aside from how we feel about this argument, we have decided to honor their preference and amend the future rental agreement accordingly.
So my question is what kind of clause would you recommend that we include in the lease to ask them to communicate with us on the due date if they will be late. Does anyone have a similar clause in their lease with their tenants/landlords? Or should we take a different angle and enforce stricter late rent penalties to avoid the issue all together? Thanks for any and all advice.
ugh it didnt fully go thru
i mean, this kind of thing wouldnt be an issue of people actually bought homes THEY COULD AFFORD!
*R*
Thanks again to everyone. This has been hugely helpful and we will be taking the good advice offered here on a number of issues. Among other things we will change the late rent penalty date to the 3rd on the lease for all future tenants – whoever they are. We are first time landlords and we inherited these tenants when we bought the house 2 years ago. So we are still learning, but the advice has opened our eyes quite a bit and will help to make us wiser landlords.
There was a lot of good advice on this topic. This is what I think. It is really about setting limits with people from the start and getting it straight in your own head that this is a business and once you get the rules down, you can have a beautiful relationship. I made it clear when I rented that my one rule is that I have to have the check on the 1st of the month or before. There is no grace period. It is not the second or the third. We have no rules for a late fee because a condition of their tenancy is that they don’t pay late. That is their job. MY job is jumpting through hoops to make sure the place is great — i.e. everything is clean, in working order, warm, the water runs, the gas flows, the works. That is a big job for me. I work to pay my piece of the mortgage and when things go wrong, I have to do backflips to meet people and then PAY for repairs, etc. etc. I take care of the people. They have built up a feeling of trust that I will keep the building in good shape and I don’t annoy them.
THEIR job is to give me the money on the 1st or before. If they are going away or on a business trip, they give me a check before hand. The point is that my bill is the first they pay. It HAS to be the most important thing for them — to have a roof over their heads, so they can pay their AMEX bill late or their cable or whatever, but I say that up front — that is my big rule. One great tenant starting slipping a little – the 2nd and then once on the 3rd, no check and I called her and she was on her way to Boston for a few days. We had a little heart to heart and it never happened again.
YOU have to set the rules. I could never DO this brownstone thing if I couldn’t rely on the tenants. THEY can certainly rely on me but we have to have some rules.
There’s full text for a lease available at: http://www.ilrg.com/forms/lease-res/us/ny which contains the following: “LATE CHARGE. In the event that any payment required to be paid by Tenant hereunder is not made within three (3) days of when due, Tenant shall pay to Landlord, in addition to such payment or other charges due hereunder, a “late fee” in the amount of ___ DOLLARS ($___).” I don’t use this lease and have never read it throughly. From skimming, it seems fairly comprehensive. I’ve seen other leases which include such clauses as: “No Waiver of Lease Provisions: Even if owner accepts your rent or fails once or more often to take action against you when you have not done what you have agreed to do in this lease, the failure of owner to take action or owner’s acceptance of rent does not prevent owner from taking action at a later date if you again do not do what you have agreed to do.”
Personally, late rent is not an issue I would turn into a contest, unless it occurred repeatedly and excessively. You might find it useful to start providing the tenant a statement of rent due a few days prior to due date, and recording the late payment penalty and interest on each of those statements. Relating to your post, the bigger issue strikes me as being whether your tenants are both responsive and responsible. Someone, anyone, tenant included, who can’t take the trouble to be responsive to deadlines or notices (rent due, appointments for work on premises, etc.), is lacking what I consider an important desirable element for someone sharing your premises (in a real sense, a very close member of your community). I’d certainly factor that into the the terms and decision of a lease renewal.
I don’t know that that’s the case- they could just be inconsiderate jerks but in any case, if they are given at least 30 days notice of nonrenewal, they won’t be able to use it against you. As a LL you have the right nt to renew. Hopefully it won’t come to that but I just don’t understand why they simply can’t let you know what’s going on. You’re trying to be nice. They should be grateful that you’re considerate of their situation. They should be considerate of yours too.
I think they are trying to get you to break with them so you can take them to court and they get 6 months free rent. The best you can do is document your actions, Remember it is no longer a homeowners market. And I hate to say that the greed of some homeowners will bring the wrath of government on alot of honest homeowners.
Most landlords understand if the rent is a few days late (thank goodness mine does). When I was getting paid bi monthly, and monthly, the day the check came would vary wildly so it was tough. that said, I see – no reason why the tenant just can’t be polite and let you know. Yours isn’t a big apartment building it’s you and the tenant.
The other issue is how much difficulty the tenant will create over late fees, and grace periods. If I am not mistaken, even with the terms of a lease, I think if they pay within 30 days they can’t be evicted. And if you start eviction procedings you are in for a nightmare. I agree with some of the above posters- and as a tenant I also hate to say it- tell them they must be considerate enough to tell you when they will be late or you won’t renew the lease. You sound like a nice landlord- I know some who would be screaming and calling the marshalls if the rent is a day late. All you’re asking for is a little consideration. If they can’t do that small thing, they are not good tenants.
If you have a real pressing need to receive the renter’s check by the first, and the grace period and penalty strategy is not working, there is a much simpler solution to the problem that’s very effective.
If you give a penalty for being late, then give a deduction of the rent if the rent is paid early. Doesn’t have to be a lot — even $20 would do, for example, if the rent is paid say 5 days prior to the first of the month.
The point is: human psychology is such that saving that twenty bucks on a deal will be a stronger motivator for most people than paying a penalty for a late fee, even if the two amounts are roughly equal.
something that i know does help a lot of people, me included in the past, is a landlord who will accept rent every week or every two weeks instead of monthly. it helps your tenant immediately sort out their finances and it insures that you get your money on time.
*rob*