Tenant is Not Paying Rent: What Can I Do?
Even with the best intentions, things can go wrong in your tenants’ lives that lead to missed rent payments. Job losses, family emergencies, health complications, and other matters can all lead a good tenant to miss rent once in a while.
Provided you have a good tenant and proper processes to deal with missed rent, you can get your rent payment back on track in no time. However, if the problem persists for longer periods, this can cause a devasting impact on landlords.
Evicting a tenant is a costly, time-consuming process. While it’s sometimes essential, there are other ways to work with your tenants to avoid going down the path of eviction. This is particularly important if the tenant is otherwise good and the missed payments are due to a specific, unexpected reason.
Keep reading to learn what to do if a tenant is not paying rent.
1. Get Familiar With Landlord-Tenant Laws in Your State
Taking time to research and understand the laws and policies that govern landlord-tenant relationships in your state will undoubtedly be worth your while. For example, during the COVID-19 pandemic, the Temporary Halt on Residential Evictions issued by the CDC protected most people, so eviction was not an option. However, not every renter met the set requirements and was therefore eligible for removal.
Other laws exist and often change frequently, so it’s important to keep abreast of the market trends and laws. Being unaware of the laws protecting your tenants means you run the risk of violating them, which can lead to a civil lawsuit.
Remember, tenant laws and policies set in place aren’t one size fits all. Variations exist between states and counties, so it’s essential to adhere to and comply with the ones applicable to your jurisdiction.
2. Negotiate a New Payment Structure
As frustrating as a late payment can be, it’s essential to be understanding with tenants if there are special circumstances leading to the missed rent. Remember that your tenants may be dealing with shortcomings on their end which affect their ability to pay on time.
If you can, reach out to them to understand their circumstances better. Provided the tenant is open to having the conversion, review if there are compromises you can both afford to make concerning your payment structure.
A new plan could include reducing the rent temporarily, providing an extension, adding more installations, or forgiving the rent altogether. Negotiating may not always be easy, depending on how good the tenant is overall. But it’s possible to arrive at a solution that leaves both parties happy.
3. Encourage Tenants to Apply For Rent Relief Programs
Creating a new and flexible payment structure with your renter can be a considerate and effective move, but it isn’t always possible. Sometimes, despite your tenants’ best efforts, they are unable to come up with anything substantial toward their rent.
Tenant relief programs are usually only available in certain circumstances (for example, during the COVID-19 pandemic). But there may be another type of temporary assistance your tenant can apply for while they get back on their feet. Encouraging and even helping your tenants to research programs they are eligible for could benefit you in the long run.
4. Refinance Your Mortgage
Refinancing your mortgage is another step you can take to lower your expenses. Many people make concessions during periods of national or global uncertainty, and that might include your mortgage lender. Depending on your total income to debt ratio, your lender may be willing to offer you an extension, defer payments, or cancel your late fees.
As stated before, knowing landlord-tenant laws that relate in your state can come in handy when discussing deals with your lender. Additionally, certain insurance companies offer protection from property foreclosure for their clients, and you could be one of them. It’s undoubtedly worth looking into, especially if your finances aren’t promising and the previous steps aren’t forthcoming.
5. Take Advantage of Tax Breaks & Deductions
Other than your lender and insurance policy, property owners may have other provisions that offer relief in the midst of a crisis. Calculating your taxes and researching which deductions and property breaks you qualify for can be a good idea when a tenant is not paying rent.
One or two classes could offer you a much-needed break. You could even consider hiring a tax professional to help you review your documents more carefully and find the best deals. At the same time, be on the lookout for options that reduce or cancel your fees completely.
Remember, not all deductions will come in the form of cash. They could also be extensions on your deadlines, which could give you a couple extra weeks or months to sort your finances and gather more funds.
6. Consult an Expert
As a landlord, there’s no denying you have a couple of options when your tenants default on their rent. But we have to admit that navigating these policies, particularly new ones, can be tricky. Not every landlord is ready or able to take on that extra work. Rather than trying to figure it out on your own, you can recruit the external aid of an expert local property manager.
Hiring an expert can save a ton of work and stress. It can also prevent making mistakes that could lead to a civil lawsuit or payment of steep fines. Plus, of course, an expert can help you find an amicable solution to your rent problem.
Conclusion
The best way to protect yourself from missed mortgage payments is by getting educated about the new laws and policies that apply in your state. Finding programs that offer your tenants and property owners assistance can work well to bring you some much-needed income or breaks. But don’t be afraid to seek out local experts to offer insight into how the rental industry works in a pandemic.
When a tenant stops paying rent, it may be time to sell a property fast to avoid future losses. At Brotherly Love Real Estate, we buy houses fast for cash – with the ability to close on a property in as little as 21 days.
If your rental is not performing as it should be, you can sell a property with tenants to us. Likewise, we buy houses with tenants going through the eviction process. To sell your property in Philadelphia or San Diego, give our expert team a call at (215) 769-9875 or contact us online to get an instant offer.