Sometimes zero tolerance just doesn't make sense. How to balance ZT with the real world when things get bumpy for a good tenant?

One of my 2+ year tenants has always paid in full and on time. Due to work absences related to a medical crisis, she was let go from her job. Single (divorced, not a baby daddy collector) mom with three kids. As of right now, she is back to work, and will be paying the final couple hundred dollars of November rent today. December she will pay in two installments. At my suggestion, not hers.

Zero tolerance means I would have evicted her at the end of September. Based on the fact that she had been a model tenant for two years, and was very honest with me about what was going on, when she would have money, and making good on her promises, I did the dreaded "work with her". My words, not hers. She expressed her gratitude many times. She is getting caught up and will be back on track very soon. I certainly am no pushover, and would not hesitate to evict a disabled pregnant woman with five kids on Christmas Eve if things were going to continue to go south.

Each time I buy a low income property that wasn't managed well by the previous owner, there is no way I can adopt a zero tolerance policy. If I did, the building would be half empty. Instead I have to pick the worst tenants and evict those, making examples for the rest of the tenants.

I most cases, an owner can tell if a tenant is playing games or if they have a real crisis that makes it hard for them to pay their rent in full and on time. Instead of just eviction them, I try to work with them. It's easy to see how much a tenant will sacrifice to pay the rent. Will they take a cash advance on a credit card? Will they take a pay-day loan. Or pawn something. Even a title loan on their car? Or ask a parent or friend to help.

One time a tenant told their entire extended family they couldn't make the rent and gave out my address. I received the rent money and then some more within 10 days.

That is why we all listen to other's suggestions here, but have to find what works for us.

I've admitted to being lenient with tenants that have been proven responsible adults. But, this is what it can morph into: Husband, wife, and 4 kids, both parents working, pay mostly on time for over 3 years and then he loses his job, she takes a lower paying job to be closer to home and excuse after excuse here we are to December with $2,000.00 being owed to us and the promise of a church supposedly voting yesterday to pay October's rent & bring us the check! When? We haven't heard a word.

It doesn't pay to get caught up in their problems, or be "friends", or get suckered in by being told you are the best landlord ever!

I'm to the point that zero tolerance is what I'm using no matter what.

In the case described above if she was a good reliable tenant and after reaching out to me first and me telling her "no" she would have found another way (friends, family, baby's father etc...).

I should not be the first person they ask for help as I'm not their friend or family member and I am no longer interested in making their problems my problems.

I've had some of my major partners in "A" class properties laugh at me because of the way I manager my "C" class low income properties. Allowing tenants to slide on their rents, not pay everything by the 1st of the month.

So when a long term 14 year tenant living in a upscale single family home couldn't pay their rent on the first, I went to the partners asking them if it was Okay to serve the tenant with a three day notice. My partners asked, "How much will it cost to fix up the home to re-rent or sale". My response, it would range between $50,000 and $75,000.

The partners said, "Robert can't you work your magic and get the tenant to pay the rent in installments, paying the full rent by the end of the month"? I was surprised, I thought my style of working with tenants was not what the partners wanted. They said there was no way they could each come up with their share of the remodeling costs, that I needed to work with this tenant.

For 30 years these partners laughed and made fun of me as my low income property's made me millions in income and appreciation. So I worked with this tenant and they were able to stay for another year and a half. Leaving owing less than their deposit. We lost nothing working with tenants and my partners were able to save up the money to remodel the house.

Robert...

A few thoughts...

First, it's your business. Do whatever floats you boat. We're all friends here and you can take our thoughts for whatever they're worth.

Second, zero tolerance doesn't mean you evict them the day rent is late. Zero tolerance means YOU DECIDE what the policy is, then you STICK to it, always.

Do yu have a policy on rent payment? If you do, do you have an 'exceptions to policy' written down?

Here's why I ask. Let's say she gets caught up this month...great.

Next month, tenant # 2 has a medical emergency and tenant # 3 has an unexpected car repair. Are those "legit?" Will you approve them? What criteria do you have established for making exceptions to the rule? Are those in stone or just kinda bonking around inside your mind?

What if you decide # 2 is legit and # 3 is not. # 3 finds out, gets made and takes you to court. Their attorney also asks if you've ever made exceptions to policy for other tenants, and you have to answer truthfully you did for tenant # 1. "Why did you approve them and not my client?"

Tenant # 3 is LGBT, btw...and tenants # 1 and # 3 were not...did we forget to mention that? It's obvious this was a case of illegal discrimination!

The judge will ask: "Why did 1 and 2 get a hand up but # 3 did not?" Do you really want to fight that battle?

If you're going to make exceptions to the rules...go ahead, but base it on YOUR policy and YOUR criteria. When tenants call up and TELL YOU what they're going to do, they are in the driver's seat. The tenant is in charge and the land lord is praying that they'll do what they said....

Should you have an 'exceptions' to ZT written up? I do. They are few, they are strictly limited, and they are always based on MY terms.

Example: Tenant calls up. "I only have half the rent today but I'll pay $200 extra every week starting next month until I get caught up."

Me: "Thanks for calling. Sorry to hear about the unfortunate situation. As you know, we have to treat all our tenants fairly to stay compliant with federal fair housing laws, so what I can do it put you on our Bi-weekly payday plan. That means you can pay only 50% of the rent today and still be on time and we won't have to start any formal proceeding. Once you're caught up and paid on time for 90 days, we can discuss going back to the monthly plan."

Who was in charge in our discussion? Me. The tenant was fishing for something that fit their plans. I turned the situation around into something that fits my plans, is 100% discrimination proof, and also is a realistic plan for a tenant to borrow the funds needed to keep thing rolling properly. Rent is #1 priority.

Robert, you handled that well.

The main point of ZT is to train the tenants so that they don't pay late, not to evict all of your tenants.

Even with a job loss I would bet that she spent plenty of money that month on other things.

She could have borrowed money from a relative, sold a 65" screen TV, Sold a iPhone, sold a Play Station, sold a laptop, sold a gold watch, sold jewelry, sold some nice clothes on ebay or Craigslist, sold a piece of furniture, sold a piece of exercise equipment, had a yard sale, done a few odd jobs on Craigslist, borrowed the rent against her car, done side jobs for family or friends, paid you instead of the credit card company, paid you instead of the rent a center, paid you instead of the auto loan, paid you instead of loan number 1, paid you instead of loan number 2, paid you instead of jr's karate class, paid you instead of buying ribeye steaks for dinner, paid you instead of the cable company, paid you instead of Netflix-Hulu-Amazon Prime... and the list goes on and on.

Any of these examples could be bought back at a later time when she gets a job. Why should you be the one that suffers and not the credit car company, can the credit card company force her to move out?

It seems harsh at first glance but there are a LOT of ways to make things work especially if you are not working. Of all the bills anyone has to pay shelter (rent) is the most important and should be paid first, you might say food but now days food can be acuired much, much cheaper if need be and still provide plenty of sustenance.

This is your business, you are not a charity and you are not personally responsible for your tenants finances. This could have just as easily turned into her owing several thousand in back rent and getting evicted eventually.

I do have a lot of compassion on people that have unexpected emergencies like this but the bottom line is the landlord is not the one that should take on all the risk and lose money. Most people will have someone that can help them or find some way to come up with extra money.