What Should You Do If A Tenant Doesn’t Pay Their Rent?
As a landlord, you put a lot of time, money and effort into getting a property rent-ready, so it can feel like a low blow when a tenant doesn’t pay their rent.
Here’s a quick overview of 3 steps you can take when a tenant doesn’t pay their rent:
- talk to the tenant
- terminate your rental agreement
- take the tenant to court
Below is a brief description of each step.
Sometimes just talking to the tenant is enough.
In many (probably most) cases, tenants don’t willfully and purposely fail to make full rent payments. Oftentimes they have cash flow issues (e.g. their employer did not pay them on time) and they are too embarrassed or ashamed to admit it to you (their landlord).
Of course, from a legal point of view, this is no excuse. As a landlord which holds up her end of a rental agreement by making a well-kept property available to a tenant, the tenant should keep up their end of the deal by paying their rent on time.
But before you threaten your tenant with legal consequences, try talking to them calmly. Just give them a call and have an open conversion with them.
Refrain from taking a hostile approach, if things do (heaven forbid) ever come to legal intervention, it does not look good on your part if you immediately came to your tenant with threats, etc. Let’s just be real for a moment… hostility never leads to anything good one way or another.
Nobody is saying that you have to be a pushover. Be direct and firm, but make an honest effort to work something out.
Start by simply asking the tenant what the reason for the delays is — perhaps you will be able to find a solution that satisfies both parties. Gently remind the tenant that timely payments are his responsibility. Tell him that if he wants a positive review on a rental platform or reference to a future landlord, sticking to deadlines is important.
Rental contract termination — can you just terminate the rental agreement?
If talking to the tenant does not help, you will be forced to take the next step, which is to terminate the rental agreement.
Tenancy laws vary worldwide and tend to favor tenants in situations like this, so it is imperative that you check the applicable law where your property is located… but in many cases, a rental agreement cannot be terminated unless a tenant has missed at least two full rental payments and is more than one month late with the second payment.
If you have checked your local laws and they match this hypothetical time period (2+1 months) after your tenant has not paid their rent for 2 months, you should send him a letter in which you inform him of your intention to terminate the rental contract unless he repays all of his delinquent payments within 1 month.
If the tenant continues to default, you can legally terminate the rental contract between you and him and begin the eviction process in accordance with your local laws. It is important that you send the tenant this notice in writing and ideally that you also be able to prove that they received it (you can achieve this by sending the letter with certified mail and/or contacting the tenant, asking if they have received, read and understand the notice). This letter and the proof that the tenant received and read it can then be used as evidence in case of further problems.
Going to court and getting local law enforcement involved should be a last resort.
Nobody wants it to come to this, but if, despite terminating the rental contract, the tenant still does not intend to leave your property, it is time to bring out the “big guns”:
- Court order to pay overdue rent — this is an extremely unpleasant situation for any tenant that values their creditworthiness and personal property. This can cause them lots of financial problems (e.g. trouble obtaining loans), but because you can charge them interest (for rent, as well as for any fees, which, according to the rental contract, it was their responsibility to pay). In this case, a property lien can also be applied to the belongings of the tenant. This lien may not only apply to the tenant’s belongings, but also to the belongings of people who live with him.
- Eviction by law enforcement — in the most extreme cases, a court can enlist local law enforcement to forcefully remove a non-compliant tenant.
A dishonest tenant may do everything in their power to extend court proceedings, thus delaying an effective eviction, the only thing you can do is relentlessly proceed with the eviction process and keep your fingers crossed that justice will finally be served.
We wish you only the best tenants which pay on time and we encourage you to thoroughly screen your tenants in order to minimize the risk for delinquent payments and uncomfortable situations.