North Carolina No Incentive To Pay Rent Ontime!

:angry: So apparently in NC. there is law that says you can only charge up to 5% of their rent for a Late Fee which at our property is the 6th. Meaning that you cannot on the 10th or the 15th. if no rent has been paid CHARGE AGAIN a daily late fee of say $8. Here is the problem we have HABITUAL late payers. We send them Pay Rent Or Quit. All of a sudden when we send that.....rent is miraculously paid. Problem is we have the money for said month but then NEXT mo. the same thing. Yes I know we can evict, however; we would be evicting basically half of the tenants. Also my boss says that he would rather have some money than no money! :whistle: So I am left with the scare tactic of Pay Rent Or Quit, which in my opinion has taught them that since they can only be charged 1 late fee per mo. they can pay whenever they damn well please DURING the mo. I believe we need to just evict anyway and get a better class of tenant one who pays. Also I believe that Leasing Staff needs to do a better job at screening them by making sure they check their employers (with written release of course), getting copies of paystubs, and contacting previous landlords. Any ideas from those in North Carolina????

Hey Sherri!

From my experience here in NC, you have to be aggressive with your eviction filing. You may want to check out Speedy Filer. Most NC attorneys that focus on Landlord/Tenant issues will use Speedy Filer or something similar. After the 10 days, you use Speedy Filer to file for the Summary Ejectments and you can add the legal fees to the residents' accounts. Late fees don't scare habitual late payers, but adding legal fees and getting that summons on the door usually makes the point. Once you actually get to evict a couple, the word gets out that you better pay on time. Of course, better screening and trying to find qualified traffic will help along the way. Best of luck!

This sounds like a fun challenge for me!! I'm just across the border in South Carolina (south of Charlotte). New tenants from Charlotte get "sticker shock" when they see my late fee schedule.

Use psychology and shame them into paying on time.

Start with new posters in all of the common areas:

Rent is Due Today!!!

Then another one:

"Remember-TODAY is the last day to pay to avoid Late Charges." (I prefer the word charges to fees. It's a power word. I would even make signs that you can put out at the entrances and mailboxes.

Get the brightest orange paper you can find. Pre-print on one side "DELINQUENT RENT DUE" so that is shows when the paper is folded.

On the inside, a new letter. Use power words and phrases like:

legal remedy
violation
loss of residency
Court proceedings

Tape it to their door!!! They HATE this!!!

Give them a date (not number of days) to pay.

Then, a second note. Make it on bright yellow with "FINAL NOTICE" on the outside. Tape it!!!

Depending on how bad they are about not paying, I would even put a note on their windshield to "Call the office Immediately" Then ask them when they are going to pay you.


A few months of this and a solid collection campaign will turn it around. They just have to know you are serious about evicting them.

Something else I used to do to, is when anyone moved out (no matter why) if a resident asked me why they were moving, I always answered "People who don't pay their rent on time have to move."

OMG. I would NOT tell someone, or otherwise imply, who asked me why someone was moving that they may not have paid their rent on time. I would turn that question back to the person who asked it and imply that maybe it was none of their business to be asking.

I think this one doesn't have to vary much from state to state. Don't let residents find out that you wont evict for late payments. If they are late, they get a pay or quit notice. when the notice expires, file the eviction consistently, every time. If they get more than three late fee charges within a 12 month period, do not renew their lease (but they can stay if they want to pay the higher, month-to-month rate.) If they have four late payments in a year, give them a termination notice. Occupancy is very good, unlike 5 years ago. If someone doesn't want to pay on time, I have a huge waiting list of people who will.

I would definitely tell another landlord who inquired about a resident if the resident failed to comply with the terms of their lease, including on-time payments. I even "tell" their neighbors by posting the late notices face out on bright paper so everyone can see them.

I want to maintain a good reputation with my fellow landlords. We are all on the same team. I wont protect bad residents or tarnish my own reputation by giving a false reference.

Sandy,

Implying that a previous resident did not pay rent is not a good idea, especially i you know that they did pay rent. Making that statement would be considered slander and you can be sued. Additionally, if the person you say that to somehow finds out otherwise, your reputation and authority are irreparably damaged.

Totally agree. I would never imply or state that any resident did not pay. Not another residents business. Also the brightly colored flyers left on windshields....might work BUT TACKY and probably illegal.

Our state laws read a little differently than most. If a resident applies to rent elsewhere, we cannot withhold a reference from the future landlord if they ask for it. We must report exactly what is in the rental history- good or bad.

One way to look at it is, if you would admit that a resident is an on-time payer, shouldn't you also admit when one is not? To hide one residents history and share another residents history would be a violation of fair housing laws, opening you up to civil and criminal lawsuits.

The policy of "treat everyone exactly the same" is pretty strictly enforced across the board.

Yes it is the same in North Carolina. However; one poster was suggesting telling another resident that the reason someone moved is because of non payment. That is a big no noooooooo

Not much you can do about the 5% law...I've been leasing in NC for 7 years now. The only thing I can recommend is to file on every single offender as soon as the 10th rolls around. After having to physically go to court a couple of times or face serious damage to their credit they will straighten up...Either that or they'll be gone and you will have a fresh batch of residents who wont know or think they can get away with stuff like this. The 5% in my opinion really isn't enough to frighten a renter, but court filing fees, eviction costs, lock change fees and the loss of their deposit might be enough...just make sure to include these costs in the letter you send out.

Just wanted to let everyone know I did that once or twice at my first management job years ago. I've come up with a lot of better incentives to get tenants to pay rent. One way I came up with for nc, is to lease and renew with a monthly discount off the market rate. A lot of companies offer move in concessions with the stipulation they only get the monthly discount if they pay rent on time. We are doing this at renewal time too. So if the market rate is $800 and the renewal rate is 750, they lose the $50 if they don't pay on time plus the late fee on the market rate. The main thing with this plan is to make sure they understand completely how this works.

Sandy,
I suggested to a collegue to post Delinquent notices on her residents' doors in red paper so it would be more effective and our regional said it was against Fair Housing because we are singling them out... I've always done that, and it has been extremely effective. The notices are always folded so no personal infomation is displayed obviously. Can you suggest something that I can show the regional that using colored paper is not a fair housing violation?

We began invoicing for rent BEFORE the first of the month, and it really helped. We include the newsletter with it, so people don't feel singled out, like with a delinquent notice.
Think about it, we get a cable bill, a phone bill, why not a bill for rent?

I'm not in NC, so I can't give concessions, but our rent is due on the first, and late fees apply after the fourth, so I put up brightly colored door hangers on the third.

Since all of our apartments share common hallways, everyone knows which of their neighbors didn't pay. The only way to avoid the embarrassment is to pay on time. Most of my residents seem to care what their neighbors think of them, so it does help.

I was told using colored paper could be a fair housing violation when I wanted to use a different color paper for guest cards each month.

Now I use the colored paper for door hangers and criteria instead.

It is not just the leasing staff that need to do a better job at screening residents. It is the company as a whole that needs to change their rental/qualifying criteria. If the qualifying criteria is set too low (based on score numbers) then you get what you get. Getting what you get is where the issues arise with the non-payers. So it is a wider issue than just leasing staff.

EG if scoring 600-650 on a credit score gets them approved with no additional fees. This is where the problems begin! This is a low score. We all know 600-650 is NOT a good credit score!

When anyone applies for credit their credit score is checked. If it is low chances are they are not getting approved. If it is mediocre they may get approved with a higher interest rate. If it is excellent credit then their chances are great. Same principle in leasing. Use a screening company that uses scores and set your values.

EG
0-600 FAIL (do not lease to them even with)
601-675 - approve BUT only with a qualified guarantor AND an additional deposit of one month's rent, or they must pay the whole lease in full up front.
676-750 approved with a deposit of one month's rent. Could also ask for last months rent as well. In lieu of the deposit they can get a qualified guarantor.
751+ approved no additional fees.

I would recommend getting a real job