What to do if your tenant stops paying the rent?
One of the most frustrating situations you may encounter is when your tenant stops paying rent. Not only does this impact your cash flow, but it can also create a host of legal and logistical challenges. However, handling this situation calmly and methodically can help mitigate the potential fallout and ensure a swift resolution. In this blog post, we'll discuss steps you can take if your tenant stops paying rent.
Step 1: Have Open Communication
The first step is to reach out to your tenant as soon as you notice a missed payment. Sometimes there may be a valid reason for the delay, such as an oversight. By initiating a conversation, you can gain insight into the situation and work together to find a solution. It's essential to maintain a professional and respectful tone during these interactions.
Step 2: Review the Lease Agreement
Refer to the lease agreement signed by both parties to understand the terms and conditions regarding rent payments, late fees, and any penalties for non-payment. This document will serve as a guide for your next steps and help you enforce your rights as a landlord.
Step 3: Send a Notice
If the tenant fails to pay rent after your initial communication attempts, send a notice outlining the overdue amount and the consequences of continued non-payment. The goal is to try and maintain a good rapport with the tenant. This notice can be done through the email or a text.
Step 4: Serve a 3-Day Notice
If the tenant still is not responding, you will need to serve a 3-Day Notice to Pay Rent or Quit. This notice gives the tenant three days to pay the rent or vacate the property. This is the first legal step of the eviction process.
Step 5: Offer Cash for Keys
Before going through with the eviction, you can offer your tenant what is called Cash for Keys. The terms of the Cash for Keys deal is up to you and the amounts can vary. One reason to consider this option, is that the eviction process is costly and can take months to complete. During the eviction process you will have no income from your property. Also, most of the time the cost of the Cash for Keys exchange will be less than going through the formal eviction process.
Step 6: Begin the Eviction Process
If the tenant remains noncompliant despite your efforts, you will need to escalate the situation by pursuing legal action. This involves filing an eviction lawsuit, also known as an Unlawful Detainer Lawsuit, with the appropriate court. The Unlawful Detainer can be filed only after the 3-Day Pay or Quit Notice time frame has passed.
Step 7: The Eviction Process
Below are the steps of the eviction process after the Unlawful Detainer Lawsuit has been filed.
Serving the Summons and Complaint: Once the complaint is filed, the court will issue a summons and you will serve it along with the complaint to the tenant. The tenant has a limited time, depending on how you notified the tenant (either 5 or 15 days) to respond to the summons and complaint by filing a written response with the court.
Default Judgment: If the tenant does not respond within the 5 - 15 days, you will request a default judgment. If the judgment is approved, you will receive a Writ of Possession.
Court Hearing: If the tenant does files a response, the court will schedule a hearing to resolve the dispute. Both parties will have the opportunity to present their case, and the judge will make a decision based on the evidence and arguments presented.
Judgment for Possession: If the court rules in your favor, it will issue a judgment for possession, granting the landlord the legal right to take back possession of the rental property. The court may also order the tenant to pay any past due rent, damages, and court costs.
Writ of Possession: If the tenant fails to vacate the property voluntarily after the judgment for possession is issued, you can request a writ of possession from the court. The sheriff will then serve the writ of possession to the tenant, directing them to leave the premises within a specified timeframe.
Physical Eviction: If the tenant still refuses to vacate the property after receiving the writ of possession, the sheriff will oversee the physical eviction process. The sheriff will arrange a time with you to lockout the tenant. You are expected to meet the sheriff and hire a locksmith that will also be there during the lookout. The locksmith will change the locks during this time so the tenant will not have access to the property.
Conclusion:
Dealing with a tenant who stops paying rent can be a challenging and stressful experience for landlords. However, by maintaining open communication, following legal protocols, and seeking professional guidance when necessary, you can navigate this situation effectively and protect your interests as a property owner. Remember to approach the issue with patience, professionalism, and a focus on finding a resolution that serves both parties' interests.
A few things to consider:
Document Everything:
Throughout this process, maintain detailed records of all communication, including emails, letters, and phone calls, related to the rent arrears. Keep copies of the lease agreement, notices sent, and any receipts or bank statements confirming rent payments. These documents will be invaluable if the dispute escalates to a legal proceeding.
Seek Professional Advice:
If you're unsure how to proceed or encounter resistance from the tenant, consider seeking guidance from a legal expert or a professional property management company. At Ocean Point Property Management we can provide personalized advice based on your specific circumstances and help you navigate the complexities of landlord-tenant law.
