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29 Aug 2011

When a Tenant Pays Rent Late

What to do when a tenant pays rent late??? Call, write letters, issue notices, follow the procedure stated in the contract? It sounds easier than it really is.

I have to thank God for being in this business from 2002 and never having a vacancy for more than 2 weeks. Its been a pretty down slide for almost 10 years. I credit the time I take to find the right tenant, and my broker, who did the same before I took most property rentals over. Last year, 2010, I decided to give one duplex to the girl I know. I was thrilled to find that she needs a place and I needed the right tenant. Apart from her being someone I know, financially stable, she is/ was a single parent. From experience, single women, parents require more stability and wont change homes as often as single people and couples without kids. The place is close to the child's school, just what should keep my tenant happy, or so I thought.
I'm sure she is happy with her child in the duplex but the fact that we know each other a bit could be the problem. The first time, in the beginning of 2011, she was 2 weeks late. There is a 7 day grace period, but she explained after I emailed a reminder. And indeed she paid 2 weeks after the rent due date. We have been great tenant and landlord since. I didn't charge any extra for the late payment. Me being a bad landlord and really knowing the tenant has to be the explanation. so that hump was over, or so I thought.

This month I get a text message from the tenant "I will be late with 9 days, please bear with me...blah, blah, blah..." It is a bad time for everyone, and I thought, its better to have a tenant that gets late with a week or so than have a tenant you need to evict. I immediately responded with a positive response, even wishing her well in whatever she is struggling with. So the promise date passes with some three days and I think, "please be a little patient". Until today, when I think, I have to let her know that I am aware that she hasn't made the payment. And off course she tells me she is still working on it. I say a little prayer "Lord please, can this pass without any ugliness in it".

If I were a good landlord, I would stick to the contract, and demand the late rental fee that the tenant signed to pay in cases such as these. I always thought I am ready to deal with tenant challenges, cases when a tenant pays rent late and worse evictions. But again, an eviction would mean, she leaves the place and I have to go back to square one, look for a suitable tenant, screen and get a good tenant. I know that she will eventually pay and we'll be back on track but I think mixing business with personal relations can get things out of hand. What is clear is that, we nay get back to this same situation with this tenant. Should I really try and be tolerant or rather get a complete stranger. I think not. I will keep my tenant for another year at least to see how things go. I know, from people close to her that she'd been in a number of costly and exciting situations lately. She may even be vacating the place soon.

So. I'm being a bad landlord, biting my lip until the end of the month. No one says its going to be easy. I am looking for one more property though. I seem to be happy with tenant stress. Its not as bad as having a 9 - 5 job with a difficult boss though. But the difficult boss is more certain to pay the bills. Meaning, if you choose this, you have to love it. I do!


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