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What to do When Your Tenant Doesn't Pay Rent

Landlords are unsure of what to do when their tenant is late on a rent payment. These are the steps you should take if you don’t receive rent on time.

Whether this is the first time you’ve experienced a late payment or you have a tenant with a long history of paying late, it can be a frustrating situation. The last thing a landlord wants to do is chase their tenant for rent owed. 

Many landlords are unsure how to proceed when their tenant misses a payment. In this article, we’ll review the steps you can take when a tenant doesn’t pay rent on time. 

Refer to Your Lease

Standard leases list the rent due date as the 1st of the month. In California, landlords are not required by law to have a payment grace period. However, most landlords typically accept rent until the 4th of the month without penalty. If the fourth day falls on a weekend or holiday, the rent is due on the next business day. After that, you can charge a late fee. 

You can also remind the tenant that the rent is due on the first of the month and has not been received. Sometimes tenants might genuinely forget to pay the rent or might have mailed the rent check on the due date. A friendly reminder can help maintain a good relationship with your tenant, particularly if they have not had a previous late payment. 

Serve a 3-Day Notice

If you have completed the aforementioned steps and still have not received the rent, it’s time to serve an initial notice. This notice, called a 3-Day Notice to Pay Rent or Quit, gives the tenant three days to pay the rent. This is the first legal step required before you can move forward with an eviction.

The notice must include:

  • Tenant’s name
  • Property address
  • Amount of rent due
  • How the tenant can submit payment to you
  • Dates and times payment could be made
  • Who the tenant must pay

Standard practice is to make a copy of the notice and post it at the property. Make sure it’s posted where the tenant can see it. You should also mail them a copy of the notice. 

If the tenant pays the rent within the three days, you don’t need to do anything else. If the tenant still hasn’t paid, you have the right to proceed with an eviction. 

Property Manager - Tenant key exchange

Cash for Keys

As a last ditch effort, you can trade cash for keys with the tenant. The eviction process is a long and costly one that neither the tenant or landlord wants to be involved in. While you may think it’s better to file an eviction to get it on the tenant’s record, it will only end up costing you in the long run. 

Once the tenant has exceeded the 3-day notice period, you can reach out one final time to negotiate. In exchange for the rent owed and keys to the property, you will not file an eviction. Make sure you give them a hard deadline and once it’s passed, file the eviction. 

The Eviction Process

Once the 3-day deadline has passed, you can proceed with the eviction. The first step is to contact your attorney and have them file an unlawful detainer with the court. Gather all necessary documents, which include the following: 

  • The lease or rental agreement and any written changes the tenant agreed to 
  • The notice you gave your tenant
  • Written proof your tenant was given the notice
  • The tenant’s rental application
  • The tenant’s ledger
  • Any other important communications the attorney should be aware of

Once the Summons & Complaint is filed with the court and posted to the tenant, you will wait for your tenant’s response. If your tenant does not respond within five days, you can request a default judgment from the court. 

Once granted, the judge will order the tenant to pay court costs and attorney fees. Five to 14 days later, you will receive a Writ of Possession, which instructs the sheriff to lock the tenant out of the property. The sheriff will visit the property and notify the tenant that they must be out in five days. If they are not, they will be forcibly removed.

If the tenant intends to fight the eviction, you will be assigned a court date. The judge will hear both sides and make a decision. If they side with the tenant, the tenant will be allowed to remain in your property. If you win, the tenant will be required to vacate the property. 

A Writ of Possession will be issued if you win the case. The sheriff will post this notice to the tenant five to 15 days after judgment, and the sheriff lockout will occur approximately one week later. You are expected to meet the sheriff for the lockout and hire a locksmith, who will change the locks so the tenant cannot access the property.

The judge will likely order your tenant to pay back rent, damages, penalties, and costs (attorney and court fees) related to the case. However, if your tenant wins, you could be required to pay their trial-related costs. 

Property Manager - Tenant Handshake

Important Things to Remember

It’s important to act quickly and be firm with your tenants when their rent is late. While you can be courteous and send them reminders, be sure to follow up on your word. If you tell them there will be a late fee, enforce the late fee. If you tell them you will file an eviction if they don’t pay, file the eviction. Giving your tenants too much leeway can result in them not respecting your rules. 

You should document everything in writing. If you and your tenant reach an agreement, have them sign a document detailing the agreement and provide them with a copy. 

If your tenant listed a co-signer on the lease, that individual  is a responsible party and should be named in any lawsuits and documents. 

Lastly, check with your attorney regarding local and state laws that might affect your property and your rights. See our chart below for a quick guide on serving notices at your property! 

Guide to Serving Notices: Have they lived at the property for over 1 year? No: 30 day written notice is required Yes: Is the property under rent control, (ex. AB 1482) or located in the city of San Diego? No: 60 day written notice is required Yes: *Multifamily Property: (2+ units) You can only terminate lease for specific reasons, read this blog to see if reason is valid. Property is in the City of San Diego AND they have lived there 2+ years, you can only terminate the lease for specific reasons. Read this blog to see if the reason is valid. Disclaimer: This flow chart is only an example to help simplify the complex legal landscape in California. Please note, there are multiple instances where this information may not be valid, in which case, we suggest consulting with your attorney before making any decisions.

FAQ

Under California law, a late fee will only be enforced if the fee is a reasonable estimate of the amount that the late payment will cost the landlord. The language must be included in the lease. California does not have a law specifying how much you can charge for a late fee, but we typically recommend 5 to 7% of the rent. 

Reach out to the tenant to notify them. California allows landlords to charge $25 for the first bounced check and $35 for each additional bounced check.

It’s up to you, but remember to treat all tenants the same. If you change your policy, send a notice to everyone stating you no longer accept partial payments. We do not recommend accepting less than half the rent. 

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Hey guys, Bryce here with Good Life Property Management and today we’re going to talk about what you can do when your tenant doesn’t pay rent. Whether this is the first time you’ve experienced a late payment or you have a tenant with a long history of paying late, it can be a frustrating situation. The last thing a landlord wants to do is chase their tenant down for rent owed. Many landlords are unsure how to proceed when their tenant misses the payment. In this video, we’ll review the steps you should take when a tenant doesn’t pay their rent on time. Before we get started, give the video a like and subscribe to our channel for more awesome content like this. The first thing you’ll need to do is check your lease. Standard leases list the rent due date as the first of the month. In California, landlords are not required by law to have a payment grace period. However, most landlords typically accept rent until the fourth of the month without any penalty. You should note that if the fourth day falls on a weekend or holiday, the rent is due on the next business day. After that, you can charge a late fee. You can also remind the tenant that the rent is due on the first of the month and has not been received yet. Sometimes, tenants might genuinely forget to pay the rent or they might have mailed the rent check on the due date itself. A friendly reminder can help maintain a good relationship with your tenant, particularly if they have not had a previous late payment. If you’ve completed the aforementioned steps and still have not received the rent, it’s time to serve an initial notice. This notice, generally called a three day notice to pay rent or quit, gives the tenants three days to pay the rent. This is the first legal step required before you can move forward with an eviction. The notice must include a few important items, the tenant’s name, the property address, the amount of rent that is due, how the tenant can submit payment to you, the dates and times payments can be made, and who the tenant must pay. Standard practice is to make a copy of the notice and post it at the property. Make sure it’s posted in an obvious place where the tenant can see it generally the front door. It also mailed them a copy of the notice on the same date. If the tenant pays the rent within the three days, you don’t need to do anything else. If the tenant still hasn’t paid, you have the right to proceed with an eviction. Before you proceed with the eviction, the last thing you might want to try is to trade cash for keys with your tenant. The eviction process is a long and costly one that neither you as the landlord or the tenant wants to be involved in. While you may think it’s better to file an eviction to get it on the tenant’s record, it will end up costing you a lot of time, energy and money. Once the tenant has exceeded the three day notice period, you can reach out one final time to negotiate. In exchange for the rent owed and keys to the property, you will not proceed with an eviction. Make sure you give them a hard deadline and once it’s passed, file the eviction. We have a detailed video on the California eviction process which you can check out through the link in the description of this video. There are some important things to remember when your tenant is late on rent. It’s important to act quickly and be firm with your tenants when their rent is late. While you can be courteous and send them reminders, be sure you follow up on your word. If you tell them there will be a late fee, enforce the late fee. If you tell them you will file an eviction if they don’t pay, file the eviction. Given your tenant’s too much leeway can result in them not respecting your rules. It’s also crucial that you document everything in writing. If you and your tenant reach an agreement, have them sign a document detailing the agreement and provide them with a copy. If your tenant has a co-signer on the lease, that individual is also a responsible party and should be named in a lawsuits and documents. Lastly, it’s important to check with your attorney regarding the most current local and state laws that might affect your property and your rights as the landlord. And that wraps up today’s video. For more information regarding what to do when your tenant doesn’t pay rent, check out our blog through the links below. I’m Bryce, and that’s Olivia behind the camera, and we’ll see you next time.