Some properties send monthly invoices, others send mass-email rent is due reminders and others do not send notices until the rent is past due. What is your recollection/notification procedure?
We send notices to the resident's door when the rent is past due. If we notice a lot more residents than usual are beginning to pay later and later every month, we will send out a mass notice to everyone just reminding them of our policies and what they can do to prevent getting evicted for non-payment.
* Courtesy call the day before late fees are added
* Late notices on doors the next day.
On one of my properties I sent a letter to everyone---most of the time it is to the late payer only>
@Abby: when you send out that mass notice do you send paper flyer notices on the door or email? What kind of response (if any) do you get from residents to these notices.
@Gerry: I like the courtesy call idea, that may be more difficult for larger properties. I'm not sure though. On the property that you sent notices to everyone how was the response?
I agree---when you have 1000 units, calls are more difficult. In the 6 months that McKinley has had the North Carolina portfolio we have reduced the collectibles to about 1% (From 35%) We make phone calls in the evening, call every phone number that we have—including momma! LOL! One of the properties is over 400 units.
The mass letter was tactful---the residents that pay on time, were thank for being responsible. In essence the letter stated that the management company had to pay their bills and we expected our residents to do the same. The letter was a 30 notice that any one who was late would need to leave! We evicted a few---delinquent rent was less than 1% after that.
My sites are also taught to let folks know when they are moving in that late rent will not be tolerated. 'We love you—pay your rent!''
we do a bit of both: rent is due on the first, we generate our delinquency lists usually on the 11th, at which point the managers call all delinquent residents with a courtesy call / "We wanted to make sure our information was correct" type of thing. If still unpaid, a friendly reminder notice is put on the door, usually on or before the 18th. If still unpaid, a three-day notice is placed on and under the door by the 22nd. Throughout the entire time, we call and call and call often laying out "Promise to Pay" dates and payment arrangements if need be.
Our company does escalating late fees, which has reduced people's willingness to be habitually late.
I think it's important to remember to start by telling new residents what you expect before the move-in (at the very least when they sign their lease). Taking the time to clearly explain when rent is due literally pays off in the end. I'm not even talking about telling them about the consequences of non-payment (late fees, disposessory filings, non-renewal, eviction, etc.). People generally want to do the right thing, so help them out by telling them how to do it.
I think that, in order to comply with fair housing; you MUST adhere to the same schedule and guidelines as follows:
Rent due on the 1st, considered late on the 3rd (or 5th, whatevever policy is stated by corporate).
At the close of business on the 3rd (or 5th), 3 day notices posted and mailed to include late fee. This is where a good 'Uncle Vito' that can break thumbs comes in handy
If no response (either payment or payment arrangement) by the close of business on the 6th (or 8th); file is sent to legal for UD action.
If your company allows the resident to 'buy out' of legal by paying rent, late fees, and attorney costs in full BEFORE legal files; then you can allow this.
I think that the threat of legal action is the best incentive to pay rent. Like another poster said, have your schedule set in stone and inform the residents when they move in so there are no surprises. I think if they know you mean business, they'll take you seriously. My old schedule was:
Rent late after 5 p.m. on the 5th. Notice placed on drop box that all rent must be in the form of certified funds and include the late fee.
On the 6th, send friendly reminder that rent is late, note the late fee and certified funds requirement.
On the 10th, send a 24 hour notice that if funds aren't received by 10 a.m. on the 11th, we will be forced to file, adding $225 in court and legal fees to their account.
On the 11th at 10 a.m., all delinquent accounts would be filed on.
I typlically maintained less than 3% delinquent rate. I think the friendly but firm approach works wonders. I don't think phone calls are necessary, though they could be a good tool at problem properties. Bootleg signs at the entrance during the rent paying period can also be helpful as well as a sign at the mailboxes.
Just out of curiosity if payment is late on the 5th (or 3rd) has anyone tried sending "you're almost late" notices on the 4th/2nd respectively? Something to the effect of per your lease terms rent is late on the 3rd at 5pm this is your reminder so that you will not have to pay late feeds which are xxx.
we have tried that and a lot of residents were offended, since they were not technically "late" they did not appreciate receiving a "late notice" no matter how nicely it was worded.
I agree, I think that sends a bad impression to the ones who do pay on time. Instead of sending them to the entire property, perhaps you could just identify your habitual late payers (like those with more than 3 times late or some other set criteria) and just send the notices to them.
We send a notice out the day after rent is due (the 6th of each month)...This late notice gives them 5 more days to pay or I file in court...on the 4th day, I will send a letter letting them know what it will mean for them if I have to file in court (the cost, etc.)...this usually gets them to pay...Thanks...
p.s. My company has mentioned that we should start doing our late notices on Red paper...as a way of embarrassing the resident because everyone will know it is a late notice and not just a letter about something else...they haven't 'made' us do this yet and I hope they don't, because I think it will cause more problems, but I can see their side...
Does anybody do a "payment arrangement" with a resident who cannot pay by your usual filing date as long as they contacted you ahead of time? How do you make sure they stick to their arrangement? For example, let's say you would usually file on the 10th but they ask to pay on the 15th. Do you stick your neck out there and trust that they will pay on the 15th from their word?
Also, by making arrangements, is it against fair housing? How late into the month do you let these arrangments go?
If you make a payment arrangement for one person, you have to make the same arrangement available to everyone paying late that month.
I personally didn't do payment arrangements. What I would do is give them a one time eviction pass. Basically, I filed on everyone on the 11th every month. If it was someone's first time being filed against, I would allow them to pay prior to the court date and would drop the case. If they've already been filed on in the past, I wouldn't extend that option. If they're going into eviction territory more than once, it's best to just get them out and get someone else in who can pay!
While moving in a new resident we stress that "RENT IS LATE ON THE 2nd" late fees are assessed on the 6th. If we are asked when rent is late we say the 2nd. Per the lease agreement your rent is due on the 1st after that it's late. We start calling anyone who hasn't paid at noon on the 5th. This works well, even on large sites (I have done it on an 800+ property). On the 6th a 5day pay or quit is sent and 6 days later a UD is filed. In the past I found it helpful to pick one person on site to handle the delenquent accounts. It doesn't have to be a member of management, just the person with the stongest personality. I have also purchased a Track phone for collections only. This way the number is not recognized when we make the calls and we get a better contact rate.
Our residents know we expect to have rent on the 1st and 90% of our rent is paid on or before then. Our outstanding rent always ends up under 1% and 3 months this year we have closed out at 0.00.
This is a TC community with 163 units.
I know everyone works hard for each penny we collect!!
Sometimes a late payment cannot be avoided, and the luxury of the resident being able to notify you may not be available, for example, what do you do when a resident has a family emergency like a death in the family, or a family member (or themselves) in a situation to need to be hospitalized; what if a resident is arrested? When any of these things happen, RENT may not be on their mind; in fact, it is probably the LAST thing to occur to them, if at all.
I agree with the idea of offering the resident to 'buy out' of an eviction filing, the cost should be equal to the rent due, PLUS late fees, legal costs, AND any other outstanding debts on their ledgers; but this should be allowed only ONCE in the course of a 12 month lease.
I actually have an additional unique procedure which follows the traditional process. Of course we notify our entire community via our newsletter when rent is due, not to mentioned this is explained during lease signing on move-in and renewals. In addition, RED notices to pay or vacate are posted after the due dates on all outstanding residents’ door (or hand delivered). Here is the fun part, I take all of my managers and have them change properties 24-hours before the notices expired, and the manager from the other community would go to the community assigned to them this month and knock door by door advising the residents that they represent higher management, and that the notice to pay or vacate will expire within 24-hours, and if they do not pay in full, they will be filed with the attorney.
By doing the change of managers each month during this process, I have improved my portfolios collection by over 5%. Why? Simply, it comes to a point when a resident becomes comfortable or tolerant of the onsite manager, and by having someone new and from higher management knock on their door, the resident is now seeing that this is beyond the site level and that they truly are at risk of losing their apartment. This becomes a wakeup call from an actual eviction. Trust me, it really works!
I give a paper notice right after the delinquency report comes out on the 7th-8th of the month. I will try and setup pay agreements with people since we own 500+ low-mod income units and they take a little more finesse. If anyone is over a month late they get a red 3 day notice posted to their door. We are probably a lot more lenient than A and B class properties but it's so much more profitable than just evicting people. We make good money off of late fees as well.
When i first took over this 84 unit complex, there were already alot of habitaully late payers. Our rent is due on the 1st, late on the 4th. After trying a few different tactics i decided for my property that this works the best.
On the morning on the 3rd i put up a "don't forget rent is due today" sign in the common areas.
The morning of the 4th, the sign is taken down and anyone that has not paid i will give them a courtesy call that rent was due yesterday. I give them a grace period to get their rent into my hands by 1pm that day (the cut off for my daily deposit)otherwise a $50 late fee is charged and if rent is not in by the end of the day on 5th we will be issuing 3 day pay or vacate notices.
If a tenant is proactive and approaches me about rent being in later then the 3rd, i typically don't issue them a 3 day notice unless their promise to pay date has come and gone without any payment. They will still be charged the $50 late fee.
The friendly but firm approach i find is the best. It keeps the relationship positive yet enforces your rules. last month i only had 5 late payers, not perfect but i think consistency is key
Our company began putting out bandit signs at each entrance of the community - stating "Don't forget, rent is now due". These are placed out around the 25th of each month. On the 2nd - the sign is changed to "Your rent is now late". Although the majority of our communities offer a grace period to the 3rd or the 5th - technically, after the 1st it is late; however the late charge is not assessed until a couple days later.
I was apprehensive of this at first - but it had SURPRISINGLY good results! Majority of all communities not only saw a decrease in delinquent payments, but so many more payments being made on or before the 1st of each month.
Hi. By the tone, or words, in your question, you are in a nice state of mind. I have been schooled by landlords who have done it for years, while we are not always blessed to have good tenanats, sometimes they do have different life situations that you may want to be considerate of. Life situations like a tenant may discover they have cancer; well you may chose to give them a break. You should also consider your situation, e.g. you live in a city where you have no problem finding renters, vs. you live in a city where it is a small community and renters are scarce and low income.
The rule of thumb under normal circumstances is you have provided the due date and the grace period in the contract. Once the late date has passed (the 5th) you send a late notice with the amount due plus the late fee. It seems cold, but you need to stick with your contract so they know you are serious and your bill has the utmost priority to be paid before they pay anyone else. Stick to your contract. don't start sending extra notices to be nice. Also if you feel like you are two nice, find a reputable property managment company and let them deal with it. Good Luck.
you have 7 properties. Find a good property managment company. Some times they offer less perproperty the more you have. So i know one in South FLorida where they start at a base 8% of the rent and the more properties, they lower the percentage. A good company will manage them all and provide you with reports. Good luck
if you modify your agreement, then stick to the terms. If they are late, issue late fees. But you basically want to make the tenant understand your business is important to you making them put you priority 1 or two to get paid. Now there sre always life factors, like your tenant become ill in a major way. Then you have other hard choices to make, or even finding assistance for them so that the rent is paid. But generally the more you give, the more they take.