How to Handle Late Rent Payments

Dealing with late rent payments can be a stressful part of managing a rental property. However, tenants paying rent late is more common than you think and there are ways to handle this type of situation as a landlord.

In this article, we outline steps for handling late rent payments and address common landlord payment questions.

What Should You Do When Your Tenant Pays Rent Late?

If a tenant pays rent late, landlords are advised to remain professional and avoid illegally locking tenants out of the property or turning off utilities. Instead, it’s recommended to follow these steps to get the situation resolved:

1. Check payment records to verify the payment is actually late. This is easy to check if you collect rent online with Avail.
2. Send the tenant a reminder email that rent is due once confirming rent is late. You can make the subject line “Late Rent Notice” so your tenant understands you are officially taking note of the late rent.
3. Depending on if you have a legal grace period or if a grace period is written in your lease, you should assess the late fee as soon as it applies. 
4. Depending on the situation, you could refer your tenant to rent assistance programs if they need financial assistance to pay rent.
5. If your tenant still has not paid (another five days have gone by), send a formal Pay or Quit Notice that informs them on the consequences of not paying rent, such as eviction. You can then give the tenant another five days to pay.
6. If the tenant doesn’t pay by the date written on the Pay or Quit notice, you can choose to move forward with an eviction. The steps for pursuing an eviction will vary greatly depending on your location and local laws. 

If the court rules that you’ve won in the eviction case, the court will send a sheriff to provide the tenant a Writ of Possession (sometimes called a Writ of Restitution) to inform your tenant they need to leave the property by a particular date. It typically provides the tenant eight days to leave. 

When Should You Consider Evicting a Tenant Due to Lack of Payment?

You can technically evict a tenant anytime they miss a rent payment, since not paying rent is considered a breach of contract. But it’s recommended to talk to them first to understand why the payment is late and suggest solutions. There are some instances where tenants simply need to be reminded or the payment is taking more time to process due to a holiday or platform issues.

If you’ve completed those steps and have decided to evict the tenant, you may be required to provide a Notice to Pay Rent or Quit to give the tenant the opportunity to pay you before they can be evicted. You may also be able to pursue eviction as soon as the payment is missed ,but refer to local landlord-tenant laws to confirm. 

What’s the Difference Between Pay or Quit Notices and Late Rent Notices?

Late Rent Notices, or past-due rent notices, are written notices that remind the tenant that rent is late. The notice will outline how much money is owed (including late fees) and the date by which it needs to be paid. It’s one way you can reinforce the importance of timely payments.

Pay Or Quit Notices, on the other hand, are a form of an eviction notice informing the tenant that they need to either pay rent by a certain date or leave the property.

What If Your Tenant Paid Rent But Didn’t Have Enough Money in Their Account?

If the payment doesn’t go through because of non-sufficient funds (NSF), this means that the tenant didn’t have enough money in their account to successfully make the payment. In this case, landlords are advised to talk with their tenant to see when they’ll have money in their account to pay rent.

Typically, the tenant just needs to transfer funds from one account to another. Sometimes, the tenant may be waiting for a paycheck before they can afford rent.

Here are some options for how to handle NSF payments:

• Discuss it with your tenant
• Ask if your tenant can transfer funds from a different account
• If your tenant has a co-signer, he or she can step in and pay rent
• If necessary, create a payment schedule with your tenant and get it in writing

If a tenant’s payment doesn’t go through due to insufficient funds, then you can charge a late fee, assuming it’s after the grace period. If a co-signer steps in to make a payment on behalf of the tenant, you can technically still charge a late fee, since the payment is late. However, you should handle this on a case-by-case basis.

What If Your Tenant Skips Town and Hasn’t Paid Rent? 

If you can’t get a hold of a tenant and they haven’t paid rent for the moth, here are the next steps to potential take:

1. Request a Money Judgment 

A money judgment is a piece of paper that says the tenant owes you money. Unfortunately, if the court can’t find the tenant either, then it doesn’t necessarily mean you’ll get your money. After obtaining a judgment, you’ll need to work at trying to find your tenant to collect on that judgment. There are a few ways to find your tenant:

• Find out if the tenant forwarded mail to a new address.  
• “Serve” them a court date at their previous address.  
• Publish a public notice of the court date.

2. Report the Tenant’s Debt to Credit Bureaus

While not required, it may be worth reporting the tenant’s debt to credit bureaus to alert future landlords of their outstanding balance. This can also inform the tenant that their outstanding balance has been accounted for and will need to be remedied to remove from their credit report.

Streamline Rent Collection With Avail

Dealing with late payments can be a stressful part of managing a rental, but it’s important to remain professional. If it comes down to taking the matter to court, it’s better to have been professional throughout the situation and to have all communication in writing. When you collect rent with Avail, you can see which tenants pay rent on time and any past due rent payments. 

Create an account to streamline the rent collection process with Avail in minutes.