Failure to Pay Rent – Eviction Isn’t Always the Answer

Payment Plans 

If a tenant has cash flow problems and cannot pay their monthly rent all at once, setting up a payment plan may be the answer. Being willing to accept partial payments over the course of the month could guarantee that you receive your full rent payment, while making it possible for your tenant to recover from their cash flow issue. You can negotiate how you would like to collect the payments – weekly, bi-weekly, etc. Setting a strict payment plan and following up with the tenant regularly is the key to success. In some cases, you may want to consider putting in place accruing interest (like a credit card). Payment plans work best for trustworthy tenants that are facing temporary cash flow issues.

Roommates

Another option to assist a tenant that is having issues paying their rent on time is to help set them up with a roommate. We are not saying that you should force a stranger on them, but by suggesting it as a possible option and then helping with revising the lease and any related paperwork, everyone may benefit. Now, this is not always an option, since some tenants may have families, or the property isn’t equipped to accommodate multiple people. But in the right circumstances this could work to help alleviate any financial strain.  

Forgive and Defer

In extreme cases, such as a natural disaster or a life changing event, you could choose to forgive your tenant’s rent payment for an agreed upon period. You can negotiate to add the missed rent payments to the end of the lease term. This only works if you are confident your tenant will be able to pay any back rent owed and if you are able to financially take on the responsibility of no rental income for a given period.  

Eviction

If all else fails or your tenant has maliciously held back rent, eviction may be the only remedy available. Evictions are stressful and can be expensive, so you should always weigh your options before beginning the procedure.  

Whatever agreement you come to with your tenant, it is imperative that you put it in writing and have both parties’ sign. Consider going the extra step and having the signatures notarized as well. It is important you do everything possible to protect yourself legally and financially. Many landlords hire property management companies to deal with issues just like this.