What to Do If a Tenant Can’t Pay Rent

It’s not uncommon for tenants to fall behind on payments, continuously pay late, or stop paying rent entirely. As a landlord, it is essential to know just what to do when a tenant can’t pay rent. And because of the legal nature of the tenant and landlord relationship, it’s critical to precisely follow the laws and steps to eviction to prevent further issues in court. 

Step One: Double-Check Your Records 

This step is a must, especially if you are an individual landlord or new to the field. After all, you absolutely don’t want to make the mistake of accusing your tenant of something they have not done. So, if you suspect the tenant can’t pay rent because of multiple late and missed payments, be sure to check over your records. 

Additionally, ensure you stick to the agreements made in the leasing documents. Again, accusing your tenant of not following the agreements, then discovering you were false is something you need to avoid. 

Overall, make sure you know your stuff and keep detailed records to prevent confusion and false accusations. 

Step Two: Give the Tenant a Late Rent Notice 

Remind your tenant their rent is past-due by sending them a late rent notice. Keep in mind that everyone can be forgetful from time to time. A missed payment doesn’t always mean the tenant can’t pay rent. It’s always possible that the due date passed them by due to a busy month or other circumstances. 

However, it’s just as likely that your tenant truly has missed the payment and cannot give you what’s due. In this case, a late rent notice will warn the resident of further legal action and inform them of what is owed (including late fees). 

Step Three: Directly Communicate with the Tenant  

It’s essential to directly reach out to the individual when rent payments become a problem. Speaking in person or on the phone at least once can save you from illegal harassment accusations if you end up having to evict the tenant. 

Furthermore, you’ll want to avoid substituting this step with an email or another written letter. 

Step Four: Consider Sending a Pay or Quit Notice 

Let the tenant know you are serious by sending a pay or quit notice. This is the first step towards eviction and will remind your tenant, once more, of the legal action you will pursue if the rent is not paid in full by the set date. 

You’ll want to have your eviction attorney write the formal letter to avoid making mistakes. Also, there are requirements on how this letter needs to be given to the resident to prevent issues in court. So, make sure you are familiar with the laws in your area. 

Step Five: File for Eviction 

If your tenant can’t pay rent after all your reminders and efforts, it is time to take legal action. As soon as the final deadline comes around, file a tenant-landlord complaint. Keep in mind that it may be illegal to evict the resident before the court process is complete. 

Remember to be patient throughout the progression of the case. These situations can take months to handle and often require many formalities and piles of paperwork. 

The “Cash for Keys” Route 

If you’d rather avoid the mess of legal actions, there is a final step you can take before eviction if the tenant can’t pay rent. The “Cash for keys” option is a deal you can make with the individual that will keep both of you from having to go through the tiring process of eviction. 

Evicting the tenant will certainly remove them from your property, but money and time will be lost. Instead, you can offer them cash to leave the property. That way, you can be on your way to finding a more suitable tenant that will pay rent on time every time. 

Avoiding a Situation Where the Tenant Can’t Pay Rent 

Set yourself up for success by having all the right measures in place. Landlords can do a few things to prevent an issue where a tenant can’t pay rent, including: 

• Screen all potential tenants. 
• Have a clear and thorough lease agreement. 

• Offer an online payment option for flexibility and accessibility. 
• Be familiar with local laws. 

CITED: Avail.co, Apartments.com, MYND.co