Figuring out what to do when a tenant stops paying rent is one of the toughest situations a landlord can face. It’s also something you’ll undoubtedly encounter eventually, so it’s important to understand your options.
Here are some steps you can take when a renter isn’t paying rent.
1. Send a late rent notice
First things first: You need to make sure your renter knows they didn’t pay their rent on time. A renter may accidentally withhold their payment, so if it’s the first time this particular renter missed a payment, your first step should be sending a formal late rent notice.
Even if your renter consistently pays rent late, you should send a formal notice before taking any other action to cover yourself legally.
In general, a late rent notice should include:
- The date rent was due per the lease agreement
- The amount due
- The date rent became late
- The late fee the renter owes, if applicable
If this is the first time a renter hasn’t paid on time, you might want to offer to waive the late fee as a courtesy provided they fix the problem swiftly.
2. Follow up with your renter
If after sending a notice you get silence in response, follow up with your renter. Call them to confirm they received the notice of unpaid rent and ask if they intend to pay.
You could get a few different responses at this point. Your renter may provide a reason for withholding their rent, for example a repair you haven’t yet addressed. If a tenant refuses to pay rent because of outstanding repairs or similar issues, you should review your lease agreement terms to see if they have the right to withhold payment in their specific case.
Other times, your renter may respond that they don’t have the money to pay.
3. Offer to work with them
If your tenant can’t pay rent because they are experiencing financial hardship, you might consider working with your renter before you evict a tenant for not paying rent. Even if you’re within your rights to pursue an eviction based on a lease violation, you may also benefit from going the compassionate route to start.
Let’s say you have a renter who has never given you any problems. They’ve paid rent on time historically, but they’re suddenly out of work. Instead of threatening to take them to court immediately, you might offer a compromise.
You might simultaneously get some money in your hands sooner (and avoid the hassle of the eviction process) while giving your renter a real lifeline in a difficult time.
Of course, you may not be in a position financially to completely let a renter off the hook from rent for a few months. You have maintenance, mortgage, and other expenses to consider. If you have the flexibility to do so, though, working with your renter can prove more cost-effective for you in the end. Retaining a lawyer for an eviction and all those court costs pile up.
If your renter needs a slight reprieve but intends to catch up on payments, or they can afford part of their rent now, you might find a compromise that helps you both.
However, you need to exercise caution if you plan to accept a partial rent payment.
Doing so may negate any previous actions you’ve taken, such as sending the late rent notice. That could delay the eviction process if you end up pursuing that route. Check your local laws and consider consulting with an attorney before offering partial payment plans.
4. Pursue eviction
If a tenant is not paying rent, that’s a clear violation of the lease agreement. If you’ve provided notice and have contacted your renter multiple times without success, you may have no choice but to evict tenants for not paying rent. But before you pursue an eviction, make sure your state doesn’t have an eviction moratorium in effect.
If you can move forward with an eviction, you’ll first need to provide a formal eviction notice. If your renter doesn’t agree to vacate the property, you’ll then need to file an eviction action in court and present your case.
You will likely need to include the notice to pay or quit that you sent your renter as well as any other written notices you gave the renter about their late rent payments.
If the judge agrees your renter violated the rental agreement, you’ll get a court order or judgment entered in your favor, and your renter will have a legal obligation to vacate your property. You’ll need to get law enforcement to help if your renter still doesn’t vacate.
Evictions are time-consuming and costly for landlords, so you’ll want to file for eviction only as your last option if a tenant won’t pay rent.
Additionally, rules and regulations for how to evict tenants vary by local and state laws. No matter where you live, remember that it’s illegal to turn off essential utilities or lock your renter out, even when tenants are late with rent.
5. Avoid late rent payments before they happen
Figuring out how to deal with tenants who are not paying rent can feel incredibly stressful. Fortunately, you can take certain steps to proactively prevent landing in this sticky situation to begin with.
Make sure your lease agreements clearly state the process for paying rent, the cost of monthly rent, and the date rent is due as well as any penalties for late payments to avoid any potential misunderstandings.
Then, make it easy for your renters to pay rent by using a simple rent collection tool. Collecting rent online will take the guesswork out of the process for both you and your renters.
No landlord wants to deal with renters not paying. Understanding what to do if a tenant doesn’t pay rent will help you feel prepared when the situation arises.
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