Renters Who Pay Late or Don’t Pay at All! Rental Scary Stories

Renters who traumatized their Landlords by not paying rent, EXPOSED!

The web is swarming with stories of tenants who give enormous headaches to their unfortunate proprietors. The worst scenarios end in evictions which take lots of months and expense thousands of dollars. To puts it just, the awful tenants continued to survive on the home rent-free as the expulsion process occurred!

How Tenants Live free of charge

Ken, for example. Ken discovered himself to be a new property owner in 2011 when he and his family moved out of their 2-bed room condominium and into a single family home in Chicago. Ken noted his condominium for rent on Craiglist. Because his condo was stunning and the lease was reasonably priced, Ken could find a tenant right away. Ken’s renter, Jack, appeared excellent. He even came prepared by pulling his credit report beforehand.

Soon, Ken and Jack entered into 12-month lease agreement with a recognized lease and security deposit total up to be paid on the move-in day. Ken didn’t understand that Jack had no intention of paying either the down payment or the rent AND might get away with it while still residing in the condominium. All of it started on the first day of the lease. Jack moved and gave Ken a check for the first month’s lease and security deposit. It wasn’t until four days later that the bank notified Ken that Jack’s check had bounced. There was no money in Jack’s account.

Ken, being a sensible and caring first-time landlord, called Jack to learn what’s going on. He was eliminated when Jack had discussed that it was merely a timing issue which he deposited his paycheck into the account the day after he provided Ken the check– “don’t worry, here’s another check, the cash is absolutely in the account this time.” The check bounced once again! It ends up that Jack had lost his task weeks before and never had any objective of paying his rent.

Ken took the recommendations of a good friend who’s somewhat experienced about rental homes and instantly served Jack with a ‘Pay or Quit’ notification– essentially providing Jack 5 days to pay the owed rent and deposit before the expulsion process would start. Jack’s reaction: “I’m going to live here free of charge for a long period!” Sadly for Ken, this ends up being real. Here’s a timeline of the occasions that happened following the ‘Pay or Quite’ notice.

February 6th– Pay or Quit notice is served to the occupant. Tenant responds unfavorably (Lease started 1/1). Jack has been living free for 36 days already.

February 11th– Ken declares unlawful detainer case for the judge to hear the realities. Jack has now been living for free for 41 days.

February 25th– Jack is lastly served with the requirement to appear in court. 55 days.

March 10th– Court Appearance 1, Jack requests an extension to attempt to discover a legal representative. 68 days.

March 25th– Court Appearance 2, Jack’s brand-new attorney asks for an extension to learn the realities. 83 days.

April 18th– Court Appearance 3, Jack’s attorney asks to be able to assemble a Jury. 107 days.

May 2nd– Court Appearance 4, Jack’s lawyer asks for a postponement, and Jack states personal bankruptcy. Expulsion proceedings are postponed till the insolvency process is complete. 121 days.

August 17th– Court Appearance 5, the truths are finally heard. Jack is court-ordered to move out within two weeks. 228 days.

September 1st– Jack has not moved out. Ken requests sheriff to perform a forcible detainer (haul the occupant out physically). Constable checks his books for his very first schedule, which isn’t for a while. 243 days.

October 2nd– The sheriff by force eliminates Jack. Ken lastly takes repossession of his own residential or commercial property. 274 days.

There are More Jacks Out There

” I rented my duplex apartment in Queens to two occupants who paid me the very first month’s lease and one month as security. When the next month’s lease was due, they provided me a check that bounced. When I called them, they told me they did not have the cash and would not be paying rent. I offered to cancel the lease if they would leave, but they declined.”– Anonymous, New York Times Real Estate Blog Q&A

Even tenants who have resided in the same system for a very long time can ultimately cause problems:

” I am simply having an issue with a renter who is leasing from me for over five years, however gradually was paying later on and later on, and now he is paying me at the end of the month usually. If I were more rigorous in the beginning, I wouldn’t have this concern now.”– a remark left by “John” on biggerpockets.com

Why Do Tenants Not Pay Their Rent?

Here are the leading ten most common reasons a renter will mention:

I just recently lost my job.
I mailed it to you already.
How am I expected to pay my other bills?
Can I get a break on rent? My power expense is expensive!
I ‘d have the lease for you but, we just purchased a new car.
My work ruined my check.
The banks are nearby the time I leave work so I can’t get your money.
I used the money for gas so I might get to work.
I didn’t know it was due again already.
My son lost his job, so I needed to pay his lease for him.

There can be many reasons a renter doesn’t pay the lease on time, ranging from pure forgetfulness to failure to flat-out rejection. None of these reasons must be treated as unique from any other. Veteran property owners will encourage that sob stories and different emergency situations, while extremely unfortunate, should not avoid you from taking the very same action as you would versus another tenant. While it can be hard to challenge renters about their rent payments, particularly if you’re a small-time proprietor, your home loan holder isn’t going to accept excuses and neither must you.

How Can Late Rent Be Prevented?

Put simply; prevention is your buddy. Always evaluate your renters with a complete rental application, credit report and criminal history check. Follow up by calling previous landlords and employers to find out if there have been issues in the past. You can read our complete series on renter screening for more preventative measures.

If you’ve currently got tenants, we recommend that you established a first lease collection procedure. This includes interacting what’s anticipated to tenants. They must know what your policies are on the timeliness of rent payments, late charges and that you don’t provide any slack at all. Develop a constant practice in collecting lease. If you’re expecting checks to be mailed, have a particular lockbox setup and instruct occupants when to send their checks in so that they get here on time. Think about using an online rent collection system (such as ours) to develop a consistent procedure that includes suggestion e-mails, late notices, and so on