Your three least-favorite words as a landlord are “Rent is Late.”
Unfortunately, it’s becoming a more common occurrence. As of January 2021, nearly 20% of American renters are late on their payments. The typical renter owes a mind-boggling $5,600, the accumulation of being four months behind on rent along with utilities and late fees.
Here’s the good news. Just because a tenant is late on rent doesn’t mean you have to start planning to fill a vacancy. Here are a few tips on what to do when rent is late so that you can resolve the problem.
When the Tenant is Late on Rent
Unfortunately, many tenants believe that if rent is due on the 1st, they actually have until the 5th (or even the 10th) to pay rent. Unfortunately, this is not the case, and if the tenant is late on rent without understanding why, it can create major issues.
When is Rent Considered Late?
Many tenants believe they have a legal grace period until the 5th or 10th to pay rent. That might be true in some cases, but not universally. Similarly, the landlord might think the tenant is late on rent even if they’re not legally late under the lease terms.
While it might sound silly, your first step is to check the lease documents. Most states don’t legally require a grace period for rent, but many leases offer a grace period of three to five days after the first of the month to pay rent.
If the tenant hasn’t paid on the first of the month, but their lease states they have a grace period until the fifth, they’re not legally late on rent until after the grace period ends. It’s not great for their credit score, but as a landlord, you can’t dock them for being late.
What Happens When Rent is Late?
Similarly, when rent is late, your first step is to check the lease agreement.
If your tenant asks, “What is the late fee for rent?” you should both refer to the lease document. If the lease doesn’t specify one, you can’t retroactively change your mind and create one from thin air. Regardless of your personal feelings about late rent, your legal agreement states that the tenant will pay rent during the agreed-upon date, which makes late payment a breach of contract.
Once that breach happens, the landlord has a few options.
What to Do if Rent is Late
First and foremost, when rent is late, stay calm and respectful. Whether you’re dealing with a great tenant or a nightmare tenant, getting upset won’t help anyone.
That said, you should act quickly. If you can, hold an in-person meeting with your tenant to discuss the late rent as soon as possible. Remind the tenant that their rent is late and review the terms of your rental agreement with them, specifying what happens if they fail to pay rent.
Legally, you also have to issue a late rent notice. This should include a list of all the fees you are owed (including late fees), the date by which the tenant must pay them, and a warning of further legal action that will be taken if the tenant fails to pay. This also serves as your first piece of documentation if you go through legal proceedings to evict the tenant, so keep thorough documentation.
Finding and Keeping Great Tenants
As a landlord, discovering that rent is late is one of the most dreaded parts of renting a property, but it’s just one of a long list of concerns for a landlord.
Florida Long-Term Rentals helps make the whole landlord-tenant relationship easier to manage, with expert property management services. We manage landlord duties so that you don’t have to deal with the headache.
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