I'm a landlord. Need some advice about a tenant.

milk ducks

Hey guys, so my wife and I own a property on the other side of town that we're renting to a girl we know. This is the first time we've ever done this, so we're not really sure how to handle every situation that comes up yet. Here's the issue: She didn't get us the rent money on the day it was due, and she didn't get it to us the next day, either. Today, she paid us half of the rent. She said that work's been really slow, and she can't make it all this month, but that it shouldn't be a problem from here on out. Now, our rental agreement says that she owes us an extra $10 for every day her rent is late. So she owes us an extra $20. But, do I continue to charge her $10 a day until she gets us the rest of the money? Or do I just let the extra $10 thing ride at this point?

I'd appreciate any advice you guys could give me. I don't want to be an asshole about this, but I don't want to be a push-over, either.

bowen

You may need to check your local tenant laws. Most states have a leeway period of 5 days since the beginning of the rental period before rent is due (usually beginning of the month).

As for what you do, that's completely up to you. Personally I'd be sympathetic so long as she has rent by next month and makes up the difference. If not, I'd start the process of eviction. Probably charge her the $20 for late rent.

milk ducks

Thanks, Bowen. That's more or less what I had planned. I appreciate the help.

Darkewolfe

Figure out the exact terms of your state laws and rental agreement.

Usually there's that 5 day leeway, after which you are allowed to assess a penalty. You need to make sure the $10 per day penalty you guys have going now is actually legal. In my experience, the penalty is always allowed to be X% of the total rent, and assessed in proscribed intervals.

schuss

As you said, the rental agreement should specify the penalties. That said, if it's someone you know, letting them slide one time is basically expected, but you should have a talk with her if it happens more than once. With my renters (who are also my friends), I've had to have a few calls where I said "I understand you didn't time your paychecks correctly, but this can't happen again, as I rely on this to pay the mortgage on the place".

Figgy

This is also why many landlords won't rent to family or friends.

If she loses her job and can't make rent, are you prepared to evict her?

Djeet

I'd let the late charges slide (and would do so for 1st late payment even if they weren't friends/family), but also talk to her and let her know next time the late payment fees will expected to be paid. Granted, my advice is tempered from landlords who are close personal friends or family, and how they go about operating their properties. Generally it seems they are more interested in getting something out of tenant (what can you pay now?) rather than have to initiate eviction proceedings, which may make the tenant hostile, and has all kinds of attendant costs. So the late payment proviso fee is there, but in the interest of making sure the cash flow happens they're willing to work with tenant.

Also you should educate yourself on the eviction process in your locality, usually there is significant onus on the landlord (written/served warnings, posting a 3-day notice, posting a 24-hr notice, hiring a sheriff to preside while eviction occurs, moving and storing the tenant's property in a secure location, and based on jurisdiction figuring out any issues w/r/to utilities backpayment so services can be restored for a new tenant), so it's likely in your best interest to keep things amicable.

milk ducks

Figgy wrote: »

This is also why many landlords won't rent to family or friends.

If she loses her job and can't make rent, are you prepared to evict her?

I think so, yeah. She's not really a friend of mine, anyway. Her mom was my kids' babysitter last semester, so I'd say we're more like friends with her family. Which, honestly, is why I'm really not concerned about her making her full rent this month. I know her parents well enough to know that they aren't going to let their daughter screw us over. I'm not really worried about that; I'm basically just concerned at this point about how to handle this particular situation. And I really appreciate all the advice you guys have given me.

Tenek

The family/friend thing can work both ways, if you're not just That Jerk Landlord to her she probably won't be as eager to leave you hanging. Other than that I would pretty much reiterate what others have said: be nice about it as long as it doesn't become a habit.

SammyF

milk ducks wrote: »

I'm not really worried about that; I'm basically just concerned at this point about how to handle this particular situation. And I really appreciate all the advice you guys have given me.

If you're looking for language to use to stress the importance of paying you back, I would suggest rhetorically bringing the financially-interested third party into the room by evoking the bank. Something like this:

"Look, Stephanie, I understand that work's been slow, and I can empathize with that. I think we can try to work around that this one time, but I need you to understand that we're still paying a monthly mortgage on this property, and we're counting on you to pay your rent in a timely fashion to help us pay that monthly bill. We can probably juggle some stuff this month, but if this gets to be a habit, we're going to end up being late with some of our own bills, and the bank doesn't know us like we know you; we can't just call them and appeal to their sense of decency.

"So don't worry about this too much right now, just pay us as soon as you're able. I just want to make sure you're aware that if this happens again, then no matter how much we like having you live here, we might not have a choice but to find a tenant who can be relied upon to pay us in a timely fashion."

That should get your point across without little Stephanie calling her mom to ask why mean ole' Mr. Ducks is such a heartless landlord.

Dhalphir

you probably don't need to make that speech until the next time rent ends up late.

SammyF

I mean you can make it whenever you want, I'd just remind you that the sooner you get it out of the way, the sooner you can throw her out on her ass with a clean conscience if she fails to make rent for a second month in a row. Realistically, at that point, two months have gone by, plus whatever time it takes to evict her, plus whatever time it takes to get the property ready to be let again, plus whatever time it takes to find a new tenant and get that new tenant to move in. During all of that time, you're still having to shell out money to the bank for the mortgage whether she pays you or not.

I'm all in favor of being magnanimous with a young person who is just starting out in life to the greatest possible extent, and the definition of that extent is determined by the point at which your generosity starts negatively impacting your own financial security. If you think that point's a ways off, wait. If you think you might have to make that tough decision a little bit sooner, then in the interest of fairness, let her know that it's a real and immediate possibility so she doesn't operate under the misapprehension that you can afford to give her a free pass every once in a while.

schuss

I gave that sort of speech the first time it was late. I don't want to be responsible for floating money to cover someone else being irresponsible or late. Being a landlord is not a charity. If someone came to me in the middle of the month and said "hey, I had something medical etc. etc." (which has happened), they get more leeway, as I can plan ahead and it was clearly an unforeseen event. If I have to chase you down to get my rent, there's a problem.