There comes a time in most landlord’s life, when you have to evict a tenant. It’s not a fun thing to do, but neither is paying someone else’s rent, which is what you do when you let a tenant skip a rent payment. It is not fun to see a new TV in the living room of your tenant, and wonder why your rent is not paid. Maybe you see a new hair style, or manicure, and no rent paid. Maybe it is a trip to Disney Land, Baja, or Cancun and no rent paid. You need to learn when to evict a tenant. Here is what I go by.
If you are willing to work an extra year or five for your tenant’s lifestyle choices, that is up to you. I would rather not put in a lot of hard work so my tenants can live better than I do. I wanted to retire early, and not give up my lifestyle so that a free loader can live for free.
I hear of landlords waiting two or three months to start an eviction, or after three months they are still wondering if they should file an eviction. Let’s face it, if the tenant was going to pay, they can at least give you $100 as a sign of good faith. Without any good faith money, it is hard to feel sympathetic to the tenant. In Minnesota, we can take a partial rent payment and still evict a tenant.
Make Sure it is not Your Own Fault
If you took in a tenant that is paying more than 30% of their household income in rent, your tenant cannot afford to pay you. It is YOUR fault they are not paying you. A bank would not approve you to pay a mortgage if you did not make enough, yet you just set your tenant up for failure.
You can Evict A Tenant Any Day, Even Christmas Eve
There is no “cold weather” rule on evictions. There are no holidays. There are no free months. You can and should evict a tenant when rent has not been paid, no exceptions other than a voluntary move out. There are a lot of myths in the above, but no laws. Utility companies can even shut off power in Minnesota, contrary to popular belief, if the user has not initiated into a payment agreement with the utility company.
Rent is Due by Midnight Prior to the First
My leases all say “PAYMENT: RESIDENT will pay MANAGEMENT the full monthly rent before midnight of the first day of each month while this lease is in effect and during any extensions or renewals of this lease. Rent will be paid as required by MANAGEMENT. “ It is the first clause in my lease.
No matter how good the tenant is, they cannot be good if they do not pay rent. Mother Teresa would be a bad tenant if she did not pay rent. I would evict Ghandi if he did not pay rent.
Renter ‘New’ Math
When you are dealing with sub-par renters, you need to understand the new math. It goes like this. Rent is $1,000 a month. Car trouble cost the renter $400. There should be $600 left for the landlord. (Actually, there should be $1,000 left for the landlord, but this is not how it usually goes.)
The landlord gets stiffed. Nada. $0. After all, the tenant explains that if they do not get their car fixed, they cannot go to work to pay rent. You are insane if you believe that. You are better off vacant than having a renter that doesn’t pay rent.
Radio Silence Means Trouble
A good renter knows when rent is due. They will contact the landlord if they are going to be late BEFORE rent is due. If you get radio silence, you are in trouble. A text is easy to return, and you know the tenant has that cell phone bill paid. Maybe a call left to the tenant’s voice mail will also be needed, and that message will also go unanswered. An email should also be sent to the tenant so that they know you are losing patience.
You should give your renter every chance to make a rent payment BEFORE your late fee kicks in. Send a reminder text on the 28th, a follow-up text if rent is not received by the second of the month, and a “pay up or get out” letter after your late fee is due. Some states require this “cure or quit” letter, if they do, send it as soon as you can.
Car Troubles, Medical Issues, Friends, etc. are No Excuse
There is no excuse for not paying rent. When I bought my second 4-plex, I kicked a renter out that had stage four terminal breast cancer. It is a sad story, but it is not my responsibility to provide assistance to people in need. She had friends, relatives, and she knows the country assistance programs. I took her to court, evicted her and filed a small claims action to get a judgment, as she also had a very bad attitude. She died about six months after she moved out.
In Minnesota, the Counties have a program for emergency assistance. If a tenant can afford your rent, but is just temporarily down, the County may help them. The tenant will need a letter from the landlord indicating than an eviction is eminent. “failure to pay the rent within five days will result in an eviction.” If you are not going to evict, there is no emergency. I have used this method for a tenant to get assistance. It also helps them understand that you are not going to let the rent slide any longer.
A word of caution. If you are headed fishing in Canada, and the guide has a boat you can use but the boat does not have a motor, it is not an emergency that you need money to buy a boat motor. To me, that is a real emergency, but I did incredibly well fishing off the bank anyway.
Mortgage is Due, therefore rent is due
Your bank will not accept a letter from your or your tenant saying the mortgage payment will be late because of car trouble. Your financial planner will not give you an extra $1,000 in your account to help your retirement plan due to your renters’ non-payment. Your credit card will not waive a late fee because your renter did not pay you rent.
And you can bet your first born that any government agency involved in inspecting rental housing will not accept a story about deferred maintenance due to non-payment by your tenants.
Friday is Payday
Sometimes, you may have to wait for the “Friday Payday” to get your rent. That is not really good, but it could salvage a month’s rent. There is ALWAYS a Friday payday before the 15th of the month. A late fee should be applied, and you should get something, maybe a partial rent, sooner than the 15th. Even if it is late, all rent for the month should be received by the 15th, NO MATTER WHAT.
This is the Eviction Timeline
- First of the Month – rent is due.
- Fifth of the Month – Late fee (8%) kicks in.
- If radio silence, sixth of the month – Eviction filed.
- If tenant is communicating, you can wait for just a bit. Here is how I would handle it.
If a tenant has a plan to pay some rent in place by the fifth, or has paid some of the rent by the fifth, you can wait just a few days. If they have paid nothing by the 10th, and do not have a plan to pay the entire amount by the 15th, file an eviction.
Have you ever taken a late rent payment? Or had to evict a tenant? If you are a tenant, what was your late payment strategy?