How to Handle Non-Paying Tenants [Boston Property Management Insights]

Updated May 31, 2022.

Collecting the rent on time can be one of the biggest challenges for property owners and real estate investors. There are several reasons why a renter doesn't pay their rent. Some of those reasons are legitimate, including unexpected bills, job loss, or emergency appendectomies. However, sometimes if a renter can't pay, there could be more serious, long-term issues.

When renters don't pay, property owners suffer too. So let's look at some of the steps the best Boston rental management companies recommend for dealing with a renter who just can't pay rent.

Remain Calm

The first step is to remain calm and look at your options and the situation. Occasionally, a renter forgets to pay the rent. If this is the first time your tenant has been late paying rent, work with the resident to make the payment right away. If it's a repeat occurrence, it might be time to issue a formal notice.

This notification should contain the date your tenant's rent was due according to the lease agreement, and if relevant, any late fees. However, if it's the first time your renter has been late with payments, you might offer to waive the penalty as a goodwill gesture. Preserving your relationship with a good tenant that made an error can be beneficial in the long run. 

Get to the Bottom of the Problem

Following your notice, your tenant will almost certainly pay you straight away if they simply forgot to pay rent. However, if your tenant goes silent, try to contact them by phone. Confirm that the renter received your unpaid rent notice and inquire if they intend to pay.

If your tenant has an excuse for unpaid rent, such as a repair problem that hasn't yet been resolved, you'll need to look at the terms of your lease agreement to see if that is allowed. A property management company has the experience to deal with these issues. These experts can help property owners comply with the law concerning what needs to be fixed vs. what might be an unnecessary complaint.

Your tenant, on the other hand, might respond  to your follow-up by saying, "I don't have the money." This response requires further action.

Try to Find a Solution

Suppose your tenant hasn't paid their rent because they lost a job or experienced another financial problem. You may legally be entitled to proceed with an eviction action. However, there may be a more effective solution to resolve the issue: show a little grace.

If your tenant has a good history of paying rent on time and exhibiting no issues, you're better off working with them than going to court. A compromise might help you save money (in the long run), and it could be a lifeline for a genuinely desperate tenant.

Perhaps your renter can pay you half now based on severance or unemployment compensation.  With a payment plan, your renter might be able to be "some" of their past due rent now, then catch up on the remaining balance before the lease ends. 

Granted, landlords have expenses too. However, if you have the financial means to allow for some agreement with your resident, this could save significant expenses like attorney fees and housing court costs in an eviction process.

That being said, if you take a partial rent payment, be cautious. It may undo any prior action you've taken in certain circumstances, such as issuing a late rent notice. In addition, it's always a good idea to get legal advice before agreeing on a deal with your renter, so check with an attorney or a property management services company to verify your options.

The Final Step: Eviction

What is eviction? If a tenant doesn't pay the rent and won't cooperate with any solutions, they clearly violate your lease agreement. You may be required to evict your tenant if you have tried numerous times to contact them and communicate with them, but they still haven't paid the rent.

First, make sure there isn't a ban on evictions and review current laws for removing tenants. Assuming you can proceed with an eviction, your first step is to give your tenant a notice of eviction. If your tenant refuses to leave, you'll need to file an eviction lawsuit in court. If the judge believes that your tenant has violated the terms of their rental agreement, you'll receive a judgment in your favor.

If the judge rules in your favor, you can have the tenant removed from the property. While we hope you never get to this point with a resident, you don't have to do it alone. Work with an eviction attorney and a property manager to navigate the process!

Hire a Property Management Professional to Handle Rent Nonpayment

What does it cost to evict a tenant? Depending on the situation, it can be costly. So it's a good idea to exhaust all communication efforts before starting the process. A property management company can help you deal with rent nonpayment situations. CHARLESGATE Property Management has the necessary experience and strategies to manage residents! We're ready to help, whatever your needs may be.