Late Rent Requests: Is it okay to be nice?
February 10, 2010
Be careful what you say and how you say it when a tenant wants to pay the rent late or a temporary exception to the complex’s rules.
If you tell the tenant or even say something that somebody might think conceivably could imply that he can pay his rent late, you won’t be able to evict for nonpayment, late-payment of rent, or violation of the rules. It’s not what you meant; it’s what somebody thinks you might have meant that will be the determining factor for a landlord in court.
For example, your tenant calls you and says, “Things are a little tight right now, could I pay you in a couple of weeks?” Be careful how you answer. Saying it wrong could mean that you might never be able to evict for a late payment. The safest answer is “No! Pay it now!”
Here are a couple of possible scenarios.
Situation One: The “good-guy” landlord:
“I usually try to be flexible with my tenants, because I know things are tough sometimes.” How do you think the tenant will interpret that?
You know what you said, but what did he hear? “I always let my tenants pay their rent late when they are short of money.” You will never get the rent on time again. When you try to evict for nonpayment, the tenant will say “In June of 20xx the landlord told me it was okay to pay the rent late if I was a little short. So I thought it was okay.”
Situation Two: The “understanding” landlord:
“We don’t usually allow late rent payments, but for you it’s okay to pay late this month. But I expect you to be on time in the future.”
How does the tenant interpret that? He has special rights! The landlord says that he made an exception to the rules for him. When you try to evict for nonpayment of rent, the tenant will say that in June of 20xx the landlord told me that he was making a special exception to the rules for me and that I don’t have to pay on time.
One way around that is a form, such as the one on page three; then you have the tenant sign it, saying specifically that the tenant can pay late this month only.
The best way, though not always possible, is to stick to the lease. The rent is due on the first. If the tenant doesn’t have it, he or she has to borrow the money from somebody. Remember, if it comes to that, it’s the court’s job to protect the poor, ignorant, victimized tenant, not to protect your property rights and “ill-gotten” gains.
The same goes for rules in an apartment complex. But with complex rules, under no circumstances give an inch. Say you have strict rules about parking, but you tell a tenant he can let his friends park in the lot today only. His friends keep doing it. If your tenant can convince a judge that he thought you meant it was okay to let his friends park in the lot forever, you won’t be able to evict for a violation of rules.
What if you’ve already promised?
That requires a different approach. You have to undo the damage. That means re-establishing your right to collect the rent on time. It requires paperwork in the form of a notice to the tenant reminding him or her that the rent is due on the first of the month and despite the fact that you gave permission to pay late in the past, it does not give the tenant the right to pay late in the future without paying a late fee and risking eviction.
The notice doesn’t have to be complicated, but it must meet three requirements. It must:
1. Be delivered properly
2. Provide the legally required number of days’ notice for your state
3. Be worded so the recipient, your tenant, cannot misunderstand and you do not admit that you have lulled the tenant into believing that paying the rent late was acceptable.
For example: This notice is to substantiate and confirm the terms in your lease that state the rent for your unit is due on the first of the month and late on the second of the month. It is further to confirm that a late fee is due and payable along with the rent for any and all rents paid after the third of any month the rent is due.
That’s how to get out of a situation you have made a mess of. But how do you avoid tenants ever believing paying rent late is acceptable?
A major principle of sales is that the first one who mentions price loses. This situation works similarly; the first person who concedes something loses. I know it’s never happened to you, but suppose one of your tenants calls to tell you that he or she can’t pay the rent on time this month. The best thing you can do is to shut up. His problem should not be yours.
One of the most powerful selling words is only two letters long. It tells the innocent person you want to hear more. It tells someone with something to hide that you have some doubts about what he or she is telling you. It tells a liar that you don’t believe him or her. But the word is two letters long. And most important is that you say only that word.
The word? “Oh?” It comes with a question mark. That question mark is important because it tells the speaker you have a question about what he or she just said. If you say it without the question mark, it sounds like acceptance of what he or she is saying. It might work with the period, just not nearly as well.
Tenant: I’m a little short this month and don’t have the rent right now.
Say it aloud. See how it looks like acceptance of an established fact by the landlord? Compare that with:
Tenant: I’m a little short this month and don’t have the rent right now.
Say that aloud, too. Notice the difference.
Sometimes the word “oh” can be followed by “really,” as in “Oh, really?” That’s perfectly acceptable and accomplishes the same purpose.
That question mark invites your shortof-money tenant to tell you more. In fact, since your tenant is essentially asking for more time for the rent and in effect borrow money from you, it demands that he or she tells you more.
The important part is that you shut up. Only say, “Oh?” To say more means you have an excellent opportunity to say too much. As those of you who have experienced or endured my speech, “The Rules,” may remember, Rule #10 is “If there’s a wrong way to say it, you will.” That means the best approach in any situation where you have the possibility of saying something stupid is to say as little as possible. In this case, leave the stupid remarks for your tenant.
Here’s what might follow:
Tenant: Yeah, we had some unexpected bills come up this month and it used up all our cash.
Landlord: Oh? (Do not say anything more. You still haven’t found out enough, have you?)
Tenant: Well, the car broke down and we had to spend a lot of money to get it fixed. I have to be able to get to work, you know.
Landlord: Oh? (You still don’t know enough, do you? Notice that he didn’t specify which bill it was in the first answer. That invites suspicion.)
Tenant: Yeah, the starter went bad.
Landlord: Oh? (Starters don’t cost that much, do they, unless money was spent elsewhere, as well and that was the $100 that broke the budget.)
Tenant: Well, I can have the rent for you next week.
Landlord: (Now you can talk.) When next week? (Don’t say anything more.)
Tenant: I get paid on Monday.
Landlord: And? (That’s a good substitute for “oh?”)
Tenant: How about if I bring it to you Monday night?
Landlord: What time?
Tenant: Around 7 o’clock.
Landlord: That works for me. And be sure to include the late fee, $25. That is only for this month, too, right? You will have the rent on time from now on, won’t you?
Tenant: Uh, yeah. Late fee?
Landlord: Yes, you know it’s in your lease. And I will have an agreement for you to sign acknowledging that the late rent is for this month only.
Tenant: Yeah, but I never thought about that?
You can see where this is going; a new subject gets new “ohs?” But notice how the landlord never volunteered anything. Every promise, every explanation, and every excuse came from the tenant. Completely different direction.
Yes, people have money issues on occasion, some more than others. But we are the manager. We have a duty to our business.