How to collect unpaid rent
Collecting unpaid or late rent can present a significant problem for landlords.
Because tenancy laws are complicated and often vary from state to state, it is always best to attempt to collect unpaid rent through negotiation with the tenant, if you can. Fortunately, there are a number of methods you can use to help strongly encourage your tenant to take care of unpaid rent as quickly as possible.
Contact your tenant to find out why the rent hasn't been paid. Your tenant may have a temporary financial problem that can be solved, allowing you to negotiate an agreement on when and how the rent will be paid. Negotiations could include breaking rent payments into instalments or agreeing on a specific date for the full amount to be paid. Inform your tenant you will take legal steps if the rent is not paid according to the agreement.
Charge late fees for unpaid rent, particularly for renters who make a habit of late payments. Common procedures for charging late fees include charging fees for rent more than five days late, or charging specific amounts for each additional day the rent is late. Include provisions in every rental agreement for late charges. Let your tenant know that delaying payment of the rent will be more expensive than paying on time to encourage prompt payment. You can always waive late fees for good tenants who make arrangements with you due to a temporary financial problem.
Serve legal notice that you intend to begin the eviction process if your tenant fails to pay the rent according to your agreement, fails to pay applicable late fees or is unreachable. The length of the notice required for nonpayment of rent will vary from state to state. For example, in New Mexico tenants are given three days to make restitution, while in Illinois tenants have five days. Inform your tenant that he can avoid the eviction process by delivering the unpaid rent during the notice period.
Sue your tenant for court fees and unpaid rent if you are still owed money after eviction. Depending on the amount owed, you may be able to file your case in small claims court. Consult an attorney who specialises in tenancy laws for your state for assistance obtaining a judgment against a tenant for unpaid rent, and for details on acceptable collection practices.
- Contact your tenant frequently about unpaid rent. This serves as a helpful reminder, and also indicates the seriousness of the situation.
- Do not file an eviction lawsuit before the legal notice date is up. This may cause the judge to refuse to evict the tenant.