Being a cooperative landlord, you try your best to make your tenants happy. Unfortunately, sometimes it happens that no matter what you do, your tenants will prove themselves bad by not paying rent on time. It’s quite challenging a task for landlords to recover rent arrears and dealing with non-paying tenants but the legal ways can be used to deal with rent arrears. When we invest in residential real estate properties, we face this risk of tenant not paying rent. To deal with this situation we should have our action plan before the issue aggravates more.
Here are the steps we can take in dealing with non-paying tenants:
1. Be polite initially:
First of all, contact the tenant to find out the reason for missed payment. Always be open and co-operative, rather than being aggressive and threatening. Remember that there can be certain reasons why a payment might have been missed; the tenant might be jobless or been unable to work due to illness so think on humanitarians grounds instead of being selfish. Try to sort out matters peacefully in the beginning. By working together you will reduce stress and find some solution.
Don’t contact the tenant often for the missed payment because it could be classed as harassment according to the Harassment Act. If the tenant is not open to discussion, don’t force them and use some other strategy.
2. Maintain a record of important details:
To avoid any inconvenience in the future, any contact or attempted contact with the tenant should be properly documented. This record may include, visits to the property, telephone calls, emails, letters or texts, all forms of contact must be recorded, as you might need them in future. If the case goes to court, they will ask for an explanation of what steps you’ve taken to recover any arrears.
3. Keep visiting the property:
The law states that tenants may have quiet enjoyment of the property whether they are paying rent or not. Your tenancy agreement should contain guidance on arranging visits to the property. Be sure to check what has been stated, as you could be in breach if you turn up unannounced. If access to the property is denied, keep a record of the details with times and dates of refusal.
4. Know the laws:
As a real estate investor, you should understand how important it is to know all the laws related to investing in real estate. Before taking any action, you need to review the laws of your state surrounding a tenant, not paying rent. You should be familiar with both landlord as well as tenant’s rights. This is important in order to avoid any inconvenience in the future, like punishment for illegal actions or violating the laws.
5. Must know tenant’s financial circumstances:
It may be confidential, but not unreasonable to ask for the details of your tenant’s incomings and outgoings. Your tenant must submit this information to you on the deadline set by you. (for example, 21 days). This exercise is very useful in helping the tenant manage their debts, as well as assessing how much they can afford to pay. Your tenant might be reluctant to provide this information but this will be beneficial for both the parties because you can make a joint decision whether it is affordable for the tenant to continue.
6. Notice for Late Rent
When you feel that the matter cannot be solved merely by discussion, then send a notice to tenant for late rent. This letter or email should include the following information: the rent due in detail and which months are owed, any late fees that the tenant has to pay, and a statement saying that you will take legal action if the payments are not made soon in near future. If a good tenant has genuinely forgotten about the payment and needed a reminder so this notice will be helpful. Similarly it will be a warning for a bad tenant who is intentionally not paying the rent.
7. File for Eviction
If all the previous strategies have failed in dealing with non-paying tenants, then you will have to go to the courthouse and file for an eviction hearing. You must bring your copy of the Pay or Quit Notice, as you might have to prove that you have already taken this initial step before filing for eviction. You will have to pay fee as well, so be prepared for that.
After the completion of paperwork, an eviction hearing will be scheduled. Then, you’ll have to follow the court hearing. Be sure to have all evidence and records with you to prove your case. Follow all the directions and hopefully, you will get a judgment in your favour. If the tenant refuses to leave you may have to hire someone from law enforcement to remove your tenant by force from a rental property.
ProRealty Property management based in Brooklyn, NY assists landlords, investors, and homeowner associations with all of their tenant needs including marketing, leasing, and guiding the eviction process.
