1. Send a reminder.
Your first reaction to a late rent payment might be that your tenant is irresponsible or is having money trouble, but this is not always the case. Sometimes, tenants simply get overwhelmed with other demands or forget that the due date has arrived. If they have a reminder app or an automatic bill pay service, there might be a technical problem that caused the delay.
A simple phone call or email might be all it takes to get a prompt rent payment. If you do this before the end of the grace period, they will be happy you saved them a late fee.
2. Send a Late Rent Notice.
A Late Rent Notice is a more formal way of notifying the tenant that they've missed a rent payment. You want to send this notice after the due date and, if applicable, the grace period. The notice should identify the amount owed and any late fees.
The Late Rent Notice is an important way of documenting that a tenant hasn't paid rent. In jurisdictions that do not permit an immediate eviction, the notice helps demonstrate a pattern of missed or late rent payments when you go to court.
The Late Rent Notice also encourages the tenant to open a dialog in the event of a miscommunication or in an effort to make a Late Rent Payment Agreement.
3. Ask the tenant why they were late.
Finding out why the tenant is late helps you decide what to do next. If they had an unexpected car repair, the late payment might be a one-time thing. If they lost their job, you may want to find out if they are seeking new employment, need to make a Rent Payment Plan, or if they prefer to terminate the lease.
If you consider making rent adjustments, you may want to ask for documentation that shows the tenant will be able to meet the new obligations.
4. Suggest the tenant might apply for government assistance.
If your tenant falls behind on rent, let them know they might qualify for assistance such as COVID-19 rent relief programs or unemployment. You may want to familiarize yourself with the available programs in your area so that you can direct your tenants to the appropriate resources. This helps you and your tenant recoup late rent payments.
5. Know the law regarding partial payments.
Know the laws regarding partial rent payments in your city and state. In some places, accepting a partial payment may waive your right to seek eviction or other remedies, even if the subject is addressed in the lease.
From a business perspective, getting a partial payment is generally better than no payment at all. However, you do not want to lose your rights by accepting a partial payment.
6. Consider your relationship with the tenant.
How you proceed may vary based on whether you have a long-term reliable tenant or have one with chronic delinquent payments or other problems. Keep in mind that no matter how much you screen, you never know for sure how reliable your next tenant will be or how long they will stay.
You also need to consider the time and cost of finding a new tenant for your unit. The better your relationship with your current tenant, the more it makes sense to draft a payment plan or waive late fees.
7. Document everything.
Whether you provide an extension, waive a late fee, or waive a portion of rent, put it in writing. This confirms your arrangement with the tenant and protects your right to collect rent and late fees as stated in your lease. A Late Rent Payment Agreement is one way to document this. If you offer a payment plan over several weeks or months, you may want to make a Rent Payment Plan.
To learn more about the pandemic resources available to landlords and tenants, visit the Rocket Lawyer COVID-19 Legal Center. If you have general legal questions or need help with documents, ask a lawyer.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.