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Sometimes you have to do an “Expectation Reminder”

August 22, 2014

So I have been having an issue with one my tenants for the last several months. I will sometimes commit a “landlord sin” in the hopes that in the long run it will work itself out in my favor. Sometimes it does, other times it does not – Time will tell.

The Problem

I allowed a tenant to make partial rent payments for a couple of months until they got back on their feet from a couple of issues. This is already a RED flag, but these tenants have been with me for 23 months, keep the place clean, get along with the neighbors, and are very respectful. These tenants are a young couple that were having car troubles and fewer hours on one of their jobs.

I immediately wanted their plan for how they were going to get caught up as this scenario could snowball. She said they need to pay mid-month for a couple of months until they got back on their feet. I was really busy at work and as you know we self-manage. So – I tentatively allowed this with no late charges. Well two months ran into three. At this point he had a new job and the car was back on the road. But the “landlord sin” was already committed. Once you allow late rent with no penalty, tenants will take advantage of it. These are not “Pacific Heights – Professional Tenants” – they are just taking advantage of my lack of policy enforcement.

Resetting Expectations

So do I boot them out? Not yet. I consider this as much my fault as theirs. I reset expectations by meeting with them at the house. I typed up a one page document and titled it “Late Pay Policy Reminder”.

Attached Doc:

Late Pay policy reminder w Mo to Mo

I essentially came in and said look I worked with you guys through some tough issues. I think you will agree that I have been more than fair with you. However, I now need to start enforcing the lease policies. I need you to start making rent the priority. One good thing about young tenants is they are trainable. I told them I am not enacting any new policies with this document – these have always been in the lease.

I handed them the document and explained that it outlines the late policy and the associated fees(I actually cut and pasted the late policy into the document). I also reminded them that they are on a month to month lease and they or I can terminate the lease with 30 days notice (also pasted the month to month section of the lease agreement into the letter). I took it even further and reminded them that I could increase the rent at any time with 30 days notice. I then told them if you can get back on track, I have no intention of raising it anytime soon.

I signed it and had them sign it as well. I will follow up by mailing this to the house (conveniently a few days before rent is due).  Their reaction to this was just what I was looking for. “I understand, yes sir. We are going to get caught up on this. We don’t want to move. We appreciate you working with us. etc.”.  

Taking the High Road

I could have come in and really thrown the lease in their face or just said go back and read your lease – You are in violation. I think if you want to be a successful landlord you have to play the game. You need to be able to relate, but you also need to be ready to be an enforcer. At the end of the day, I want to keep my place occupied. I don’t want to turn it over unless I have to. I could kick them out and still end up with much worse than just a slow payer…

From → Landlord

  1. I like your technique of not coming down too hard on a good tenant.

    I like to cut my good tenants some slack too.

    Generally though, I find that if a tenant starts having trouble paying the rent, sooner or later, I have to get rid of them.

    They may have great intentions, and be reliable tenants, but if they lose a job, for example, it’s like the ship has sprung a leak and it usually sinks and takes the rent payments with it.

  2. Terry,

    I think you are right…I was hoping for later, but its looking like sooner on these tenants…

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