A moral dilemma: When to hassle tenants for being late on rent.

Today is the 2nd. Rent is due on the first. I live below my tenants, and as such, it is very convenient for them to pay me – they usually just slip their check under my door on the first. (Often at around 11pm on the first.)

I’ve come to expect my tenants to pay me on time, and they generally do. Once or twice they were late, and left me a note explaining the circumstances, and when they would be able to pay me, which I’ve graciously accepted. I really don’t have much to complain about.

However, this morning, the 2nd, there was no check under the door. I wrote them a somewhat chatty email, discussing local news for a sentence or two, then reminded them that today was the 2nd and I did need a rent check. A coworker looked over my shoulder, and immediately started giving me a hard time about it.

Am I a mean landlady for (politely) hassling (reminding) people for rent when it’s a day late?

On the one hand, they do have roughly 30 days ahead of the 1st on which they could pay me early… they don’t have to wait until exactly 11pm on the 1st to give me their check, if it’s difficult for them to remember…

On the other hand, though, they don’t actually incur a late fee until the 5th of the month (which I did intentionally, because I didn’t want to have to be the mean late-fee assessor unless it was actually significantly late).

A scenario for comparison: If I didn’t live in the same duplex as my tenants, they would likely mail in their rent, in which case it would probably be normal for it to arrive on the 3rd or 4th of the month. But that is not the case, and with transit time being basically the time it takes them to walk down the stairs, it doesn’t seem unreasonable for me to expect a check on the first, when it is due.

Another scenario for comparison: If I’m a day late with my credit card payment, they don’t call me to politely remind me to pay up, they simply add a substantial late fee to my bill and raise my interest rate.

Perhaps it would be in my favor to receive rent on the 5th, if I got an extra $50 out of it…

I don’t know. Perhaps next time I’ll wait until the 3rd to remind people, since I don’t want my upstairs neighbors to think of me as a big meanie… Still though, rent is due when its due. It’s a reasonable expectation.

7 thoughts on “A moral dilemma: When to hassle tenants for being late on rent.

  1. I think you are always justified in demanding rent be paid on time. That said, you do live with these tenants. The easiest way to avoid these types of problems is to spell out the policy for handling late payments during the signing of your leasing contracts. If you establish clearly that late rent is not tolerated and that action will be automatically taken (as in “It’s not me it’s my system that issues a 3-day notice to pay or quit on the 1st of the month if a deposit isn’t input into the system”) as part of your rent-handling system, then your tenants will know what to expect and won’t be put off by a posting on their door oryour personally serving them the notice to pay or quit. A notice like these really gets a tenant’s attention and usually only one is required to get the point across. But if you haphazardly enforce your own rules you can get yourself in a bind with tenants who can rightfully assert that you never handle the matter the same way twice. Do whatever works for you but do it the same way each time and with every tenant alike and you’ll save yourself lots of headaches. Cheers.

  2. You’re right, consistency is definitely key – knowing that late rent is consistently not tolerated discourages any kind of lax attitude (oh, the landlady, she’s cool. I pay her around the first, whenever.)

    I like your idea of having an automated system (whether fictional or real). Do you have an actual automated system like this?

  3. I agree with Andrew on his comments about consistent enforcement of the rules. If rules are not enforced consistently the tenants will learn to push the envelope a little farther each time. Before you know it all control would be lost.

    for the grace period. I’ve from talking with different landlords that it seems to be a personal preference. Some don’t allow it, others do. Different people look at the reasoning for it in different ways.

    I live a good distance from my properties so all rents must be mailed in. For that reason I allow a grace period. I allow it in case there is a delay in the mail or in the event that something is lost in the mail. If rent is not received on the first, i do place a telephone call to let the tenant know. I do this for the very reason that it may be lost in the mail. If it is and I call them on the 2nd they have a chance to get the rent to me and avoid the late charge.

    Look at the grace period as just that, you being nice. No other business allows you to pay past the due date and not get charged a late fee. Landlording is after all a business.

    I will say that if my tenants lived in the same building as me I would most likely do away with the late charge. The only purpose, that I see, for it is to allow them to pay late and avoid the late charge.

  4. Landlady, my automated late fee system consists of my wife/bookeeper who tracks when rents are due (all on the 1st, in our case) and nudges the enforcer (that’s me) when it’s time to chase tenants for rent. We actually have very few late rent fees because we are sticklers for renters who pay on time and, over time, have been fortunate in selecting our tenants. I’m pretty sure some software folks out there either already have or could easily incorporate late payment processing into their rent software, but we’re pretty small operators so I haven’t messed with any of that. I am toying with the idea of setting up a bank account the sole purpose of which would be to have tenants deposit directly into the account. I could then immediately transfer those funds into our “real” income property account and thus reduce the likelihood of any potential fraudulent withdrawals by unscrupulous (and smart) tenants. This would save me the hassle of going to the post office, collecting rents in the mail, and depositing them myself (or my wife doing so). I read a post recently somewhere about someone who is already doing this and seems to have experienced success with it. I’m all for automating as much as I can. Good luck.

  5. I (with my wife and son) live in one of the units of a 4-plex we own. Regarding rent- payment due on the 1st, no grace period, late fees begin accumulating on the 2nd. I’ve found that a grace period just delays your payment by that number of days (3, 5, etc.) Although it make no difference now since I live on-site, my leases also state that rent is due on the first and that tenants understand that may require early mailing. If my electric bill is due on the 15th that doesn’t mean I get to drop it by the post office on the 15th…

    All that being said I’ve found that careful tenant selection/screening (and a little luck) have meant few payment issues for me over the past 4+ years.

  6. I allow a five day grace period out of courtesy. Honestly, back when I was a renter, I often didn’t think about rent until the calendar flipped, and then I hurriedly dropped a check in the mail. I also have no problems calling my tenants and giving a gentle reminder, and they also return the favor and have no qualms calling me about rent, utilities, or anything else that is going on.

    Tenants seem to want to volunteer info when you are friendly with them. If you call and demand the rent, you will probably just get a miffed tenant. If you call and remind them, you might hear about a job problem or a personal issue that you otherwise wouldn’t have heard about – all things that you can file in the back of your head in case you get any more warning signs that something is going seriously wrong.

  7. One of my previous landlords had a clever system. He offered a “discount” for early or on time payment (what he expected to get all along), a different number for the day it was due, and hefty late fees after that. People paid on time or early.

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