I adopted Zero Tolerance on late rents as a stance back about 3 years ago. That said, I had some tenants who were with me from before that time who I let slide a little since I'd done so in the past. Sort of a "Grandfathering in" of the old system. I felt semi-obliged to try to gradually wean them off that since I was the one who "taught" them it was okay to be late in the beginning. Sort of paying for my "sins" by being a little lenient with them vs. new tenants.

Today...that era came to an end via an eviction. Guy is nice, but he couldn't keep up. I checked over the past 15 months since Jan 2018. He's on payday plan--every 2 weeks--which is supposed to make this easier (and does for many of my tenants).... 22 late pays/partial pays/and finally a string of no-pays.

We filed in early Feb. After getting served he promised he'd work it out....we agreed to a modified plan that would add only $50 per payment to get him caught up, waived a TON of late fees, and continued the case. He made one payment on time, then back to late pays, partial pays, and him TELLING me when he'd pay the rest.

Nope...I'd had more than enough. Court was today: judgement for rent and possession.

When folks text me now, "I'm short and will need to pay rent next week." I respond with my canned...

"I regret to hear that you're having money issue, but we need to stick to the payment schedule we agreed on. Please make arrangements with friends, family, co-workers, or community organization to get help to pay your rent as agreed. Late fee of $X is due and we need the full amount due paid by (insert date). Once you are caught up, we can modify your rent payment as needed to ensure you stay paid up."

If the indicate any willingness to participate, I'll switch them to the bi-weekly plan if they're not already on it, provided they pay the full Mouton due for the bi-weekly and late fees. No exceptions. Zero Tolerance.

Tolerance means I get what I tolerated: late pays! It got so crazy keeping track of him paying $100 a week late, $80 three days later, $135 randomly in the middle of a week. My ledger was a mess of partial payments, waived late fees, unpaid water bills, and every time I texted "Rent?" he had no clue how much he owed and I kept having to remind him, then he'd swear he "paid that rent" and I'd have to remind him, no you're still 3 weeks behind and owe court fees, etc. Just preparing the ledger for court took me almost an hour....that's gonna affect my $280/hour rate....a little. ;-)

It's good that you are getting rid of this tenant. I will never understand why a landlord would ever have a grace period unless it was mandated by law. As you said, it teaches tenants that they can pay late.

Jeff, you make a great point about it being a potential nightmare in court. I like to think my Excel spreadsheet ledger is fairly easy to follow. Column A is the due date. Column B is the base rent amount, Column C is the late fee, Column D is any charges (add a pet, pay for a damage, etc), and so forth. Column G is how much was paid, Column H is what date I received it, and Column I is how much is still due.

With this guy, it was a mess....partial payments all over the place. If he has showed up to court today (he didn't...got the default judgment for money and possession), all he would have had to say is, "I don't owe that" and he'd have automatically gotten a trial...2-3 weeks from today...and cost me another $150 to have my lawyer come back, and I'd have had to testify as a witness...losing a half day of vacation time at work in the process.

NO THANKS!

I have never had a grace period. My tenants know that if rent isn't paid on the first, a late payment is due on the second- plus I start eviction proceedings on the 2nd.

My tenants are late on the FIRST if rent is receive after 5:00 PM.

LL, you can't start eviction proceedings on the second.

Jeff,

Yes, my policy is late fee of $25 added after 5 PM on the day it is due. Then we add $5 each day after.

Why not $25? Because I'm the nicest guy you'll ever meet... ;-)

Our judges cap late fees at $150 if we end up in court. My attorney has also advised me that any history of "excessive" late fees may be grounds for them to grant continuances. When I asked him what is meant by "excessive", he said the standard for our county is a one time "hit" (i.e. $25) followed by $5/day. I just followed his advice. No other reason. For years I did $5/day regardless. But that didn't encourage anyone to avoid missing the first late day, so stating about half way thru 2018 I changed my lease so the first day late is a "wake up!" call.

Thank you for sharing your experience, and I understand how you feel. I'm glad that the tenant has been evicted because you had done everything imaginably possible to help him pay his rent since your ZT policy.

Want some Cheese with that whine?

There's no money in PEOPLE paying on time. You haven't said how much you made over the years in those late payers?

I do agree that you let it get out of hand with this guy-- but if you have a policy that tolerates late payers who don't get to far behind you can work a system to make much extra income. I'm not talking one month but you gotta look at the whole 12 months.

Jeff CO why not make it 100.00 a day? Jeff it's got to be reasonable 8 to 10 a day for the first 10 days than just convert to 10% of rent. Looks good on paper and in front of judge. Admin fee 60.00, court costs, efile fees atty fee 100.00 - 25% collection and 15% on the debt.

Sid,

Congrats! You LL life will easier and less stressful.

And Autodraft is THE way to go.

Regarding both ZT and autodraft you’ll say WHY did I wait so long!?

For what it's worth in the discussion, MY court allows filing for eviction THE DAY it's late.

I have watched judges throw out the entire late fee when the judge thought it was excessive, rather than discount it.

INDIANA law says the late fee cannot be a PUNISHMENT. It must be an INCENTIVE to pay. (Obviously written by a politician!)

I also find that people who pay late usually leave 3 times the amount in damage.

I used to allow late payments and brag about the extra income but when I added it up on paper I was losing money in the end, BIG TIME.

Wasn't bragging but stating a business fact. I'm not sure what your standard was for collecting your money-- maybe you tried maybe not. Maybe you hired it out, as do most, I'll let common sense say this for me-- there's no one -- except the US/local gov't forgiving debt. There is no one who can collect what's owed me like I can-- because I care about what they owe. I care about the damages they did.