I would assume your lease (like mine does) spells out in agonizing detail what WILL HAPPEN when a tenant is late with the rent.

Now, that being said, if your tenant knows he/she will be late with the rent,...do you expect that tenant to call you (or text) and give you some explanation? Or would you rather not listen to some sob story and just post a P/Q notice and have no contact with the tenant? Zero tolerance here.

I post the notices the first time a new tenant is late. If they follow through on what they say they will do I don't follow through with any further action.

Over time you get to know who will do what they say they will do. In my state the three day notice must be posted and the time passed before you can do anything. So I post it. I can still choose to give them a few more days if needed. So normally I post to be safe.

Generally, yes I always enforce to the letter, no exceptions, no tolerance. However, like LisaFL says, if someone calls me IN ADVANCE and HAS A PLAN, I will work on it if it's acceptable. I have, on a few rare occasions, reduced the late fee if the tenant sticks to the letter of the plan we put in place.

If they have no plan, I will suggest them switching to our bi-weekly payment agreement...or I've even gone weekly a couple of times so they can borrow $150 from someone to avoid the filing fees. Most of my rents are below $600, so $150 gets them to next week if that's when pay day hits. Yes, at this point we're typically circling the drain, but if I get 7 more days of rent...that's rent I wouldn't have received otherwise. Right or rich? I choose rich usually.

Had two tenants pay late in January, wait three! But all three I did not sweat about. All three had the money, willing to drop it by (my house! Nope!) in cash, but due to ice and snow storms, the BANKS were closed! Monday the 1st was the holiday, they missed their chance on Tuesday, then snow and ice for three days, then the weekend...it was the 8th before the bank opened again. All were willing to pay late fees as they had missed the Tuesday, but because it was the first time for any of them, I cut them slack. The whole beach was paralyzed, I wasn't going to worry about it.

Today I have one tenant - long term, since 2009 I think - who has not paid yet. I just text them "It's the 5th." They will pay today I am sure. They are ALWAYS just short of paying late fees.

Lisa (FL)

Does your lease specify exactly what day the P/Q notice will get posted?

I have never understood voluntary grace periods. Those are just an encouragement for tenants to pay late.

Jeff (CO)

No. My lease states rent is due on the 1st. If not paid on the first it's late. I can post a notice as soon as it's late (on the 2nd) but I don't specifically say that in the lease.

I have texted and/or otherwise explained that I'm posting a three day notice because it's required by law. If they pay as agreed no further action is taken.

I don't go into detail and explain it's required by law in order for me to evict you if you don't follow through.

I don't believe that leases are required to contain language that states when a non-payer will be served with a notice.

I serve them on the morning of the 2nd.

I had a new tenant on her 2nd or 3rd month who was served this month, and she got mad at me. She was shocked - SHOCKED! - that I didn't have a grace period. She didn't like the $75 in fees, either!

I sent her this section of her rental agreement.

Wow. That is steep. Guess she forgot about the apparent discount you give for paying on or before the due date.

I used to do that but stopped once I made enrollment in Clearnow mandatory.

I just had one today who I was just notified by Clearnow his draft failed. Been with me seven years with never a late payment. I told him if paid today to include $20, $5 a day late fee.

Yes, it is. And there is more of an entitlement attitude today, and nothing is their fault. It's always someone else's.

I'm going to look into Clearnow. I also think you handled it the right way with your long-term tenant.

Clearnow is not free. From their website:

"Monthly debit: $14.95/month for one debit. Each additional debit is just $2/month.

Biweekly or semimonthly debit: $4/debit.

Jeff,

Is rent high enough? No. It's not. He's getting a great deal and has irritated me on occasion by balking at small increases.

When he moved in rent was $895.00. Eighteen months later his wife left him and he asked if I could reduce it for him. I dropped it to $835.00. Since then it's crept up to $930.00. House should rent for $1200 minimum which I've explained.

He is a good tenant which he likes to remind me of. He knows he's getting a deal which he acknowledges. So why give me a hard time ever year? Probably because I fell for his sob story the first time.

He doesn't want to move. I made it clear that if I don't raise the rent I can't keep the house and will sell it, to him if he'd like. That ends the conversation. It is my worst case of below market value.

I live with it because in the time he's been there I've had little to no costs and his rent has covered the purchase price of the home which has doubled in value.

Clearnow does have a cost but it hasn't increased in the twelve years I've used them. I have 32 drafts a month . It amounts to $2.44 a month, tax deductible so $1.83 per property.

Cleared funds credited to my account in three business days. So a small delay but they don't use a third party for processing, have a convenient data base and easy to use format. Great customer support as well. I've been very happy with them.

I use MTM only, so my 30 day notice to vacate would serve me well, if someone cannot 'get with the program.' I do tell my tenants at lease signing that I understand about emergencies, but, I NEED to know what's up. Not the whole story, just a quick text.

'Hey Busy, rent will be late this month. Half will be paid on the 5th , half on the 12th.'

I text back 'OK.'

My tenants know (I wrote up a memo on my late payments,) that first late would be a $25 fee. Now, if the break that, then another $10 per new date. So, in my example, payments on the 5th and 12th, that's just one late fee of $25. But, if they text on the 10th and say, ' Hey Busy, we won't make the payment in the 12th, it will be the 15th, we'll include the $10 late fee. ' then I text back, OK.

I also give a $20 discount if rent is paid before the first. One tenant has always gotten that, others occasionally.

Thing I like about MtoM is, I can tweak my late payment system as needed. I also am willing to move my rent due date around to suit a tenant's paycheck schedule. I may or may not be exactly in compliance with my state's laws. If a tenant would be dumb enough to make a case out of that, well, they can go shoot themselves in the foot then. My tenants KNOW they have it good with me. (Very well maintained houses.)

Keep in mind, I am a very small-time landlord. This customization stuff isn't very scalable, and I wouldn't try it in a multi fam situation. And, I have found, as I am getting older, I need to apply the KISS principle a lot more, so I can keep things straight. And make good, clear notes on the top of my rent roll pages, so I know who is on what plan.

I make A LOT of extra money off of late fees. But, I won't tolerate shenanigans , (fights, cop calls, damage, trash, filth.) I also put gentle reminders, tips in my monthly hand written newsletter. A little Dave Ramsey every month or so....

As an owner of many rentals I have to do what's best for me in the short run. Also because my City and State have rules on rental payment enforcement, sometimes I have no choice but to allow a tenant to slide on their rental payment date. For example, when I purchased a large complex, some of the tenants were retired and living off of Social Security and/or a pension. They could not maintain a "Checking Account" due to garnishments/liens. So automatic deposit into their account was not an option. They had to "wait" until a check was mailed to them, cash it and then purchase a money order to pay their rent.

Because they relied on:

1) the mail

2) their payer sending out the check on a random end of month day

Their income was not written in stone and they could only come up with the rent money sometime between the 2nd and the 5th of any give month. I could not demand payment on the 1st, because I was a new owner and they had established they payment method with the prior management.

Having said that let me answer your question. The worst thing a landlord could have is a vacancy. Why? Because there is a cost each time you have an turn-over. One tenant leaves or is evicted and you have loss of income and the cost to fix up the property. Just painting, flooring and window coverings can run $4,000. Add to that the loss of income during an eviction, rehab time and finding a qualified new tenant, that's another $2,000. Add to the the attorney's cost, now your loss is over $7,500.

WOW, if you could have avoided that loss all because you lacked the "skills" to deal with the average paycheck to paycheck tenant who was down on their luck. You could have avoided this nightmare and loss.

So what I do is not to be little or put down anyone just because they may be late a few days on their rent. Instead I "REWARD MY TENANTS THAT ARE LATE BY HAVING ONE SIMPLE RULE! - CALL ME ON THE PHONE OR SEND ME A TEXT'ED MESSAGE THAT YOU ARE GOING TO BE LATE WITH YOUR RENTAL PAYMENT. LET ME KNOW WHEN YOU WILL HAVE THE RENT AND I WILL WAVE THE LATE FEE'S". If you're going to be more than a week late, give me two checks. One for the amount you have now and a second check dated 10 days later for the balance.

With 100 rentals in the low-income areas, Class "C" apartments, I often get around 10 tenants a month with payment problems. Because I work with them, I avoid eviction and vacancies. Sometimes if they loose a job I will allow them to apply half of their deposit toward the current rent. Other times I will pay their "cash advance fee" of 2% and get the rent that way.

With tenants renting home with rent's like $2,500 per month in Grade "A" areas, them driving BMW's and children going to private schools, late rent is not an option. If they would simply take their kids cellphone away for a month, they can save $1,000 on overage use. Or if they stop watching so many "Pay Per View Channels", then they can save another $500 a month. Or if the wife stops buying $250 shoes each week, that's another grand they could save. Just because a roof over their head doesn't seem so important, I will inform them of the need to:

a) raid their retirement fund

b) get a car title loan

c) pawn some jewelry

d) get a cash advance

e) donate blood at a blood bank for $50

I did have a 2 family, run down house with decent tenants that were there for 10 and 15 years (half brothers) Their work was not steady, I would have had a hard time fixing it up for new tenants and they did some fixing themselves and really liked the place. So easiest for me was to work with them which meant paying when they could. Weekly for one. Sometime they would be ahead for a couple of months, sometimes a little behind, but I always got paid. One I had to threaten occasionally with court. But it worked for me for that property.

My current properties have very good tenants, occasionally they will have an excuse that the rent WILL be late (notifying me ahead of time). Since they are almost always paying on time, let me know ahead of time, and have paid when they said they will, I let it go. (of course this is once every couple of years and it is an understandable reason) I know they are good for it, and we can work together. But, I only have a few rentals now, and that is different than having a large number.

When it comes to rent money I am as strict as they come. Same with pets. Now for instance I have one tenant at a duplex that takes care of the property lawncare and his place is immaculate. I caught him smoking in there and told him not to. This is one thing I won't persue in this situation.

The apartment is tiny, the rent is high, he takes care of the outside and his place beautifully and he pays rent early every month now for couple years. I could care less at this point to have to clean and paint a 600 sq ft apartment after all the money I have made and how easy the turnover will be.

Now if I had the same situation at one of my 3 bdr 2.5 bath homes that would be a whole other story and I would have a huge issue with it. I deal with many violations on case by case basis. Like for instance I just had a single guy at a 1300 a month rental get a bird. I don't care the guy works 12 hours a day, lives by himself and has a bird. I didn't bother him about it.

Under normal circumstances I absolutely enforce my leases. Depending on the circumstances there is the old adage that rules are meant to be broken.

One woman who's been with me for 2 1/2 years has cancer and has had to stay out of work 3 times for 3 to 4 months at a time. The first time she borrowed from her 401K but the next treatment, which was 6 month later, the 401K told her she could only borrow every 18 months and her short term insurance which covers 60% of her salary takes weeks to kick in. While it took some time she has always gotten current.

The other one has a wife who's had open heart surgery twice in the past 4 years and has 2 autistic twins who have physical disabilities. He is always late but sends me his paycheck schedule every 3 months when it's published. Last year he didn't notify he was going to be late. I tried contacting him and finally received a response that he'd had a stroke. That was last year and it took him 8 months but he too got current.

Here in CT, the tenants have 10 days to pay...late on the 11th.

Some pay on the first, some the 4th, some the 6th and some the 10th. Nothing I can do about it.

I have also cut slack to them. I have students and one lost his job...don't know his family situation but the next month he caught all up by hustling himself finding painting jobs. I knew he was good for his word.

I like NC INVESTOR'S philosophy.

Compassion is great, but I am not a social agency or a charity. Business is business. If I run into a problem and can't pay for repairs, utilities, insurance, taxes, or the mortgage, I won't get a break from those organizations.

I ran the same tight ship when I only had one property and four units. But, to be honest, I made more mistakes back then.

Quite a few interesting replies here.

It seems that some of you all are typical Mom & Pop Landlords which means regardless of what your lease says, you make up your own set of rules as the situation calls for. Tenants that are a PITA get Zero Tolerance and the ones you do like get preferential treatment for paying late. Really now, why should a good 3-5 year tenant be treated any differently than one that just moved in?

From some of your very elementary landlord questions you have posted throughout the years Roy I have seen you ask and post I wonder if you are a full time landlord.

David, it's black and white for me. That's what I am saying. I am not speaking for others. I have standards, and if a tenant or vendor crosses a line, it's over. I don't give it second thought. The money doesn't matter.

There are plenty of landlords (most) who will give tenants a second chance if they catch them smoking in violation of the lease. I never did and never will. The damage and lack of respect from smokers is the same whether I have 1 unit or 50.

I have kicked out several tenants for violating this rule just once. Other tenants take notice and spread the word that I run a tight ship.

Correct. An empty unit is a short term problem that has had zero effect on my long term wealth. I don't worry about it. Never did.

Many landlords think of today, this week, or this month. I think in terms of years. I have made millions doing this even though I have - get ready for this - kicked out many tenants for violating rules.

As they say, if you don't stand for something you'll fall for anything.

David (KY)

I can assure you I am a full-time LL. Have been since I started in 2006. There are times when I wish I had a day job and that is when I have to enforce my own lease in booting tenants out,..creating a costly vacancy.

This whole topic is very subjective. If a landlord were to enforce every little detail of their lease, it would cause more problems than solving. It would also cause the landlord more stress than needed. Some things in leases are like an "ace the sleeve" to be used when needed.

I think another big point here that folks miss is that some people have garbage leases. What happens then?

Also, some people may have a iron clad lease but no courage to enforce it.

It's like everything else in this business: case by case.

NE makes a lot of good points.

There is not one right or wrong way. It all depends on the tenant pool you cater to and what you value most.

I require payment via Clearnow. I won't waiver from that. Some here find that silly because it wouldn't work for them.

Some have high late payment fees, mine are smaller.

Some prefer leases others prefer month to month.

Some accept weekly rent payments, some won't.

Some put fences up and others view it as one more item to maintain.

Some make tenants pay for all sewer clogs, others don't.

Some rent to roommates, others don't.

Some provide washers and dryers, others don't.

Some care that appliances match, others don't. The list goes on and on.

David,

Yes, I am a Mom (and Pop) LL. I am very OK with that. In fact, I have learned a lot here and have good long term tenants. I think my tenants like that I am a small LL. I am friendly with them, but not friends. They get to work on their cars in the barn, keep horses and chickens, things they could not do at the complex down the street. They pay on time, and I fix thing as soon as possible. (They understand that heat out during a real cold snap means it may be a while before the repair man can get there). I am retired, enjoying life, but keeping busy with a few units.

Even big banks don't enforce their rules all the time. If I end up with a fee for some reason, they will generally waive it if I call and ask, because I am a good long-term customer and it was a one-time type of thing.

For instance, I am co-signer on my granddaughter's checking and when she was just learning the ropes, she spent more than she had in there and oops! Overdraft fee. I called and they waived it as a courtesy.

LindaJ,

Some of my best friends in this business are Mom and Pop landlords,...matter of fact, I think 99% of the residential SF housing is owned and operated by M&P landlords,...so you are in the vast majority here!

I just find it interesting (and sometimes amusing) how they operate. I know several M&P landlords in my town that do their own 'self-help' evictions and no one blinks an eye at it. It is just the way they do things.

It's a little odd to see that some see total lease enforcement as a burden, as though we're going through constant checklists with our tenants every day - monitoring their behavior and cross-checking with their leases. We're dilligently deciding what to enforce and what not to.

Maybe I'm just lucky, but I only have 4 things that come up. 1. Smoking. 2. Non-payment of rent. 3. Noise. 4. Improper notice to quit.

Maybe I am better than I think I am, but I find it very easy to keep track of them. Hardly overwhelming.

The first two are the most important to me. Smoking is unacceptable and WILL result in their ouster. It makes the place smell bad, it bothers other tenants who have moved into what they thought was a smoke-free building, it has to be cleaned up, and it's a fire hazard.

I find that 100% lease enforcement is almost effortless.

I think what we have here is a two part question: 1) what's in your lease and 2) do you follow what's in your lease?

I'm a big fan of KISS, which is why I have a 6 page lease (3 pieces of paper, front and back). It could be simpler, but it addresses only those areas I consider critical. That's why I'm almost always going to enforce the lease: it's the stuff I consider too important to be wishy washy on. Now there's a ton of "other" stuff that might not fall neatly into one of my lease clauses, and on those I use some discretion.

Agree with WMH, though, that for good customers, there is a little flexibility with the rules occasionally. The third time someone pays late, however, to me they are no longer a good customer.

What gets me is how some tenants have been there less than 12 months and call me up saying, "now you know I'm one of your good tenants..." when in fact they've paid late half the time and are now telling me that once again they'll be paying rent next week.

David, [KY] I second your Last Post, on this Thread.

Who can Live by the Letter of the Law or Lease ?

Train,em Up or Mov'em Out !

And to think, some Fossils here, (not many)

use to do it with a (Firm) Hand Shake, only.

We all have to work with the personality we were given. I don't know if that is determined by birth, or, if it can change by our experiences. My years working in education and autism therapy says it's both.

Some of us see things in black and white, or, as I like to call them, those are binary people. (One, zero, one, zero, one, zero.) Others are very empathetic, completely flexible, in fact, almost devoid of any structure. (Amoebas.) Most of us fall somewhere in between. My own family has both types (it gets interesting.)

The great thing about this country with our capitalism experiment is we can have many ways to run a business. With 50 different states, plus countries from around the world who also read and contribute greatly to the conversation, we can continue to improve our operations.

Some of us live in areas where laws may be more flexible, so we can maybe bend the laws a bit, others must work within a more rigid structure. When I hinted I scoff at state laws, here are my two deviations:

Rent is supposed to be due on the first, late on the fifth. (Any newbies reading this, that rule/guideline/law may have changed in my state. Or. I may be remembering it wrong.) NO, NO, NO. I WILL NOT say that rent is due this day, but late that day. Rent is late the day I can charge a late fee. I WON't train tenants to ignore due dates, by building in a grace period.

Rent must be paid by the 5th? What if the tenant gets paid on the 8th? I reserve the right to say, we can make your due date the 10th.

My assumption would be that any state rules/guidelines/laws were intended to work for the mutual benefit of both parties to the contract.

I tend to let my conscience be my guide, more than some rule/law/guideline created by some beaurecrat.

Once,on the last day of the month, one of my tenants asked me if she could pay the rent on the second. I said," Yes,you can if you add $35 late fee in your rent,per our lease." Guess what? She paid at 5pm on the first! She's been paying on time ever since.!

I try to follow the lease......but on a rare occasion - there will be times where it is beneficial not too.

I know some yahoos on this site will stomp up and down about the merits of how great the ETF is. I have had someone who wanted to cooperate with me and leave early but didn't have the cash to pay the ETF. I was a hard nosed idiot who was set on zero tolerance, so the tenant thanked me by doing several thousand dollars of damage to the place - NICE.

The lease is a tool in your tool box. You should try to do your part and follow it....but understand in the end you are dealing with people. Treat them like crap and you will also be thanked like I was.

Ray-n-Pa, yours absolutely right. It falls back to being a case by case thing. If I can push that ELT, I will. If I feel it'll backfire, I just hit their deposit for it after they're out. I certainly won't tell them that during the move out.

It's like my meth mold guy. The guy was in the unit 3-4 years. Passed screening back in the day. Took excellent care for the duration of his tenancy inside and out of the unit. Paid his rent on time. Last few weeks of his tenancy, he went nuts and damaged the unit and skipped out.

How do you plan for that? How do you screen for that? You don't and it can't.That is the REALITY of landlording.

What lease clauses could I have enforced? His girlfriend being there? She was never an issue, not once.

His project car parked off to the side not causing a problem? It never caused a problem.

The Storage outside his locked door in the form of landscaping and potted plants that looked really nice? Where's the issue there?

Enforcing the lease to a T can create more issues than solving. Nothing in my lease would have prevented the outcome of this tenancy. NOTHING!

He went nuts. Simple.

It's always case by case.

I sure wish life could be more black and white, but the older I get I see more gray.

I still follow it 98% of the time.

When it comes to late rent, yes, I enforce my lease. I only have one rental property so I am definitely a "mom & pop" landlord.

My tenants have been there for more than 5 years. They have been late with the rent often, but they always call me to let me know what day they will pay (and they have always kept their word on that). I tell them how much the late fees are & they pay them.

Lots of great discussion here. The short version is as far as late fees are concerned, absolutely positively I enforce them.

Yes when a long-term tenant comes to me and says they've lost their job and need an extra week… Yes I give it to them. Under agreed-upon conditions and following up on those conditions to the letter.

The new tenant that has only been with me six months "told" me that she had to pay her rent on the 15th.

Sorry sweetheart it doesn't work that way you don't tell me when you're paying my rent.

She had to get rental assistance. She did pay half by the 5 th and then pay the other half on the 15th, with the late fee.

The church that gave her the rental assistance called me To verify the story. They said, "she says her rent is due on the fifth?" I said absolutely not. Her rent is due on the first it is late after the third and on the fifth is when I file for eviction.

But in her mind, her rent is due by the fifth.

She gets no more grace or anything else. I told her she got one get out of jail free card any other time it's not paid in full by the fifth evection will begin.

So when a tenant loses their job and is late by a week at least you still profit from all of the late fees.

Not sure if that was meant to be snarky but it came across that way.

Her cell phone carrier doesn't care if she's Lost her job. They charge a late fee. Her utilities don't care if she lost her job. They charge a late fee. Her car loan company doesn't care that she lost her job. They charge a late fee. Her insurance carrier doesn't care that she lost her job. They charge a late fee.

You read my post wrong. I was talking about profiting from the late fees. It's a gold mine.

We used to operate case by case. Then I realized that was the greatest source of stress in our business and our lives and our marriage.

Simple: follow the lease. They either paid or they didn't.

My lease is clear: it contains basic reasonable rules, already spelled out in plain English that ANYONE can follow.

It's AMAZING how many people pay on time when we don't discuss lates. No more sob stories or guilt.

LLs are doing it to themselves, traching people it's OK to be late.

We TEXT them the day it's late giving 3 days before we file. 50% of lates pay ALL within 24 hours

25% of lates pay within 72 hours

15% of lates pay once we file

10% of lates either leave or must be evicted

We went from 26 late letters a month to 3-4 TEXTS a month!

Avg 4 evictions a month down to 1 a month.

Zero Tolerance on lates actually HELPS resients keep their home!

BRAD

PS

Case by case is inviting a Fair Housing lawsuit by treating one person differently than another.

IL, Chicago has a tenant landlord ordinances so we can't be creative with late fees. There is a formula for it. I had a tenant paid rent on time for two years, one day he informed property manager he lost his job and didn't know when he would be able to pay rent. 6 months later attorney fee and sheriff cost he moved. He was alleged he wad offered a job and would work with social service agency to caught up. Tenant never attained employment. We served him too late and he used the Chicago ordiance to stay thru winter.He knew exactly how to work the ordinance.

Roy,

Another thougth - I can put some statistics on this topic!

For 37 YEARS we "worked with" residents and made decisions "case by case". Worst way to run a business EVER!

The result: In only the last 10 years prior to going ZERO TOLERANCE on lates, residents owed us $537,000 in unpaid rent. That's $53,700 per YEAR!!

Who knows how much for all the previous years.

I increased my income by $53,700 per year by simply sticking to the lease.

BRAD

For past 20 years , been a owner /manager/handyman for my 12 to 19 properties. All free and clear .LOTS of head-aches.Lots of learning !I used to be a nice guy.I cut slack & ALWAYS got stepped on.

Biggest lessons : look into their cars ,evaluate the children, look for tattoo's,INSULT them right away (if they roll with it = ok. If nasty reply dump them ),at FIRST face to face -look'em up on Facebook .

You nailed it, George. Sadly for them, most small landlords aren't onboard with that approach.

No good deed goes unpunished. :)