4 Things To Do When a Tenant Stops Paying Rent
Being a landlord comes with lots of perks. You get a consistent income, create a passive income, and be your own boss. But at the same time, the job can prove to be tough. This is especially true when you find yourself facing a tenant who has stopped paying rent or asking to break their lease early. A tenant may have a genuine reason as to why they've stopped paying their rent. It's best to sit down with them and try to resolve the issue. However, if you can't come to a compromise, then you should go ahead and take the necessary measures. If you're dealing with a tenant who has stopped paying their rent or who wants to leave before their lease is up, here are some useful tips to properly deal with the issue.
What to Do When a Tenant Stops Paying Rent
1. Have your Tenant Explain Why the Rent is Late
If a tenant suddenly stops paying rent, yet he/she has been paying without any problems, you need to talk with them to find out why. Take your time and speak with the tenant either face-to-face or via a phone call or email. Have them explain why they have stopped paying rent and when they intend to pay the due rent. Clarify that the only way they can continue living on the premises is to pay their rent promptly. If they say they are no longer in a position to pay, try to see if there is a payment plan, they may meet. If they can't do so, let them know that you are ready to terminate the lease without imposing any penalties.
Talking with the tenant might be all it takes to get them back on track and pay their rent. If a tenant with a good history of paying rent on time says he/she is facing issues and wants a little more time to pay, try to be human and understand their situation. Let them know that if they fail to pay on a specific date, then you will have no option but to terminate their lease without further negotiations. If they say they are no longer in a position to pay, try to see if there is a payment plan, they may be able to meet. If they can't do so, let them know that you are ready to terminate the lease without imposing any penalties on them.
2. Review the Lease Agreement
Before attempting to evict a tenant who has stopped paying rent, it's essential to review the lease agreement. More importantly, you need to ensure that the lease contract has enforceable clauses that comply with your state's statutes, like the landlord-tenant act. Otherwise, you might end up being liable, and the tenant may sue you for illegal eviction
3. Serve the "Pay" or "Quit" Notice
In most states, the law requires that a landlord serve a tenant with a notice to "pay" or "quit" when they fail to pay rent. This can either be in the form of a formal letter or email notifying the tenant that he/she has defaulted on rent payment. This notice also demands that the tenant pays the due rent in full within a specified period (usually 3 to 5 days in most states), or the lease will be terminated. This would force the tenant to move out of the premises. If they still refuse even after serving them with a notice, you should consider filing an action with your local eviction court. If a tenant stops paying rent when their lease is almost over, you can choose not to renew the contract instead of serving them with a notice.
4. File an Eviction Action
If the tenant still fails to take remedial action, you should consider filing an eviction action with your local court. This is because it's illegal in almost all states to evict a tenant until all court proceedings have been finalized. This can take several months. Make sure that the action has proper summons and complaints as well as the show-cause motion and order. After paying the required court fees, the administrator will schedule a court hearing. This can take anywhere from two to six weeks. You will then serve the tenant with a subpoena, although your local court might do this. If you win the judgment against the tenant, you can then hire the town Sheriff to remove him/her by force.
Bottom Line
As a landlord, you can take action when a tenant stops paying rent or breaks their lease. The sooner you handle the situation, the sooner you will get out of a costly, nerve-wracking mess.