My tenant got Laid off?

Question

and now can not pay January's rent. Besides the late fee what more can I do? Or more so, how flexible should I be with him.

Also, as far as late payments are considered (besides what is on the lease) is the standard? per late week, $ per day.

I appreciate it.

Answer 1

Well there is no real standard for penalty. Your bigger problem is the lost rent and your overhead.

If it is a good tenant, sit down with him and see if you can work something out. I assume you have a deposit so you are covered a bit, but if he hangs on there you are going to lose out on 2 to 6 months rent while you evict him and then get the place re-rented.

While you may get a judgement, a lot of those are not collectable and it is not something you can use to pay YOUR mortgage.

Sooo.... sit down and see if you can find a payment schedue that he can meet (50% of the rent now... and the deferred amount on fixed schedule once he gets employed). Waive the late fees if he comes thru with it. Set a fixed timetable for the reduced rent. Get this all in writing and stress that there are no second chances. If he misses this deal (and it is a good one) start the eviction no matter what.

IF YOU HAVE A BAD TENANT.... one that is always late, always a problem etc... then start the eviction process right now. You are going to lose money... the only question is how little you can make it. Again. getting them out is MUCH more important then the extra $50 to $100 in late fees.

In California (where I was a land lord as you may have guessed) a savy tenant can milk the eviction process into 6 months of delay and a lot of ca$h in retrofitting and repairs after they do leave.

good luck

.

Answer 2

The bigger problem you have is that an eviction *especially in winter *double that if they have kids could take 4-5 months even if you know the process and the courts. Then, even though you can sue for money owed, collecting any of it is another matter entirely. Then you hope you can rent it again right away and don't have it sit empty earning nothing.

You hope the situation can resolve itself, and if they are otherwise good tenants, you work with them as best you can. Minor little late fees, and threats don't tend to spread good feelings and cooperation. And ultimately they are irrelevant to your financial health as a whole. Unfortunately, sometimes you consider yourself lucky when the situation does not become violent.

Your lease may give you the right to charge these fees, but your goal is to get the rent. Period. A person without a job certainly has far bigger problems than avoiding an extra $10 a month.

Your question indicates you haven't grasped the magnitude of the big picture here. Your tenant didn't just get laid off. It's more as if you had a lay off in your own family. The real problem for you will be to figure out when the situation passes the point of no return. Pray they get another job son!

Hopefully you own the property free and clear and aren't on the hook for a mortgage you can't afford to pay without the rent yourself. If so then you could potentially be in real trouble, possibly even of ultimately losing your investment and more!

This is one of those pesky little details they don't tell you in the "Get rich in Real Estate" shows running in the middle of the night.

I know I used the word HOPE a lot but it is apropos.

Good Luck. You need it!

Answer 3

Do you have a smaller unit they can move into?

If not, think to yourself how much of this remaining lease is actually collectible. If you have very little chance of getting any more, and there's a long time left on it, you might want to negotiate ending the lease with your tenant so that they can move into a less expensive place. Instead of turning it into what will eventually be a legal battle to collect a few months of rent that you'll not see for a very long time, cut your losses, move them out, and find someone who can pay it.

What you're allowed to charge for late fees should be in your rental agreement. If there's nothing there, you're allowed 1% per month on the unpaid balance.

(Another thing you have to consider is the reason WHY your tenant was laid off. Lay-offs are very common after the Christmas season, and January and February are the worst months for job hunting because of the normal seasonal economic slow down. Right now, a PROMISE of finding work is worth very little until March. In the mean time, you could suggest to your tenant that they sign up at temp agencies to pad their income.)

Answer 4

Having been on both sides of this problem I think, first:

1. Have a talk with the tenant, and let them understand you are willing to work with them, but they have to understand you have bills too. Put them on some kind of payment plan.

2. Try to give them a firm deadline for getting the rent paid up. Be understanding, but firm.

Most late payment fees where I live are $10 per every month late, but if it is a multi-unit building, you can charge a percentage of the month's rent.
Check your local tenant's rights information at your State's website on tenant's and landlord's rights.

Answer 5

You can only assess penalties based on what your lease states. You can't just whack them more because you feel like it.

As for flexibility, you have to follow your gut. When talking to him, what are your chances that you'll be paid soon, that he'll get caught up and stay caught up? Can you believe anything he tells you?

You then have to weigh those risks against the cost of eviction, marketing, rent loss while you look for a new tenant, etc...

Answer 6

be candid and honest. not my problem.
show them where state unemployment agency is and where local pizza delivery to start cash flow 700 -1200$ mth or day labor companies 30 50$ day or news paper delivery600 1200$mth. there e be work out there.
give them end of next week to get some thing in good faith in your hands end of month to catch up. February due on time or else.