Topic: Late Rent

I've been a leasing agent for about 2 years at 2 different properties. The property I am at now I've been here for almost 3 months. My manager gave me a list of what I am in charge of. I know everyone is different. I am in charge of handing out late letters and collecting rent. Rent is due on the 1st and there is a 6 day grace period. On the 7th day your late with a 10% late fee. On the 7th day I sent out late letters. They will come in and just tell me a day when they are going to pay and I put it in their activity in one site I do not say anything but okay. However I am very organized and our CEO says he rather have empty apartments then apartments that have people that will not pay. Which I totally agree. The last leasing agent did not push this and late people pay whenever. Should I start putting a date to pay by before turned over for eviction? In our state and county they have 14 days to pay or 30 days to get out.

Also another big problem is partial payments. I do not like to accept them because at the time of eviction if they have taken a payment it cancels out the eviction and starts all over again.

My question would be what do I say to the people that come in and pay partial payments? And also, say to the people that say I will pay next month? They will come in with their letter and the letter will say no payments after the 20th and they will say I will pay the 27th. I want to push people to pay on time and understand that it is not acceptable to pay when they feel like it.

Let me chime in on the partial payment - we never accepted partials, for the reason you mentioned. So I think that would be a simple one. That said, it sounds like the past leasing consultant was pretty loose with the rules previously, so I think that communication with the residents is key. You might be completely in the right to suddenly demand certain things, but I think putting out some notices first will soften the blow as you make the transition. (I would include why it is important to make these changes - for example, the more time you are taking tracking down late rent, the less time you have to make the property better.)

I would suggest that you try honesty. The apartment may be their home but the complex is a business and there is no wiggle room on the rent. There is nothing that you can do. Explain why they don't want to get evicted, because no one will rent to them again for a long time and explain why you don't want to evict them, because it is very expensive. In this case, inflexible company policy is your friend. Be sympathetic but firm because anyone can have hard times.

It's a new year, Amanda, so now you and your Manager can set to work to correct the lax collection policy. Since Ownership is fine with creating a possible occupancy issue when evictions add up, then start with what the Lease says. Send out a letter to every single resident with what the Rent Collection Policy is and then abide by it. In addition, I would email rent reminders on the fifth day reminding residents a Late Fee is about to be charged to their accounts if full payment is not received by the sixth. Late letters (aka pay or quit notices) are delivered and mailed on the 7th. Then, simply tell those who call or come in with their letters that their file will be turned over to the attorney on Day 15 if full payment is not received. People will push back but telling you when they intend to pay but that does not mean anything. For all residents who have not paid in full, send their files to your eviction attorney and charge legal fees. Once residents realize you are serious about rent collection and you are following the dictates of their leases, the word will get around. Sadly, it takes awhile for it to all sink in and it is maddening to know that every month this will occur. I know on our properties, when residents knew their files were going to the attorney and legal fees were being charged, they got the message quickly. When the resident ends up paying before court, but continue to be a problem, you and the Owner can discuss creating a policy of not renewing any resident on whom you have had to file eviction three times in a 12-month period. Your resident demographic will eventually change to better paying residents.

Your frustration is understandable, and so is your CEO's. Rent is an obligation that a lot of people treat as fluid without personal discipline. For savvy residents, they want the float - the same float the community needs to pay its staff and the mortgage on the community. For the majority of residents, however, late rent is more function of juggling bills and when a paycheck hits. Even residents earning more than $60,000 a year may be living paycheck-to-paycheck and constantly evaluating what bill to pay first.

Here is a different way to collect rent on a more timely basis. Set your market rates a bit higher, and offer an "early bird" discount to those who pay BEFORE the due date. Of course, you will still follow your policies and laws for those who choose not to pay on time, but this idea has resulted in stronger collections on some properties with late rent issues.

If you want to try this idea out before offering it to all residents, have an early bird contest and enter all residents who pay early into a drawing for a $25 rent credit.

Want to really energize the residents to pay early? Enter all residents who pay early every month for their entire lease term into a drawing for 1 month's free rent.

You can also make any rent concessions dependent upon paying rent on time. So, if you gave away $600 as an incentive to move in, you could charge back the $50 concession for that month that rent is paid late. Be sure you have a concession payback addendum signed before you put this into play.

what do I say to the people that come in and pay partial payments?

We don't accept partial rent payments, and it's in our lease that we don't accept them. Also in our lease is a clause that says something to the effect that collecting rent is collecting rent and will not stop and eviction proceeding

to the people that say I will pay next month?

"I'd love to help you, but the paperwork will be in the court before then"

They will come in with their letter and the letter will say no payments after the 20th and they will say I will pay the 27th.

"The paperwork will already be in the court before then"

I want to push people to pay on time and understand that it is not acceptable to pay when they feel like it.

In our lease we charge a late fee if you are 5 days late or more AND we give the same amount as an early payment credit if you are 5 days early. The late fee is substantial, but not oppressive, and the rents are slightly above market to cover the early payment credits. This has the awesome effect of getting the rent paid early.

We haven't done this yet, but I think the "loss" from the early payment credits is tax deductible. Check with your tax person on that.

Of course the other thing we do is make sure that everything in the apartment works the way it should and the property is properly maintained. That goes a long way to keeping a good relationship with your tenants.

What do you put in your eviction notice for section 8 tenants ?

Hi Jim,

Every state has laws specifying when to send, what the notice should say, etc. Most landlords get that form from their attorneys, if there is no management company that provides it. It's pretty standard. Also include the words, "and all occupants, et al" so everyone is evicted at the same time.