What To Do When Your Tenants Stop Paying?
Take Action When Tenants Refuse To Pay Rent
The issue of a tenant who stops paying for furnished rentals is a very uncomfortable and unhappy one. Any property owner who has trusted a renter and who has wondered what they would do if that renter ceased paying or caused damages dreads the moment that their worst fears are realized. Fortunately, when it is furnished rentals or corporate apartments, there are few additional measures available to the landlord.
The Traditional Options
If you were to ask a landlord what they do in order to get a non-paying tenant up to date and back on track, they might remind you that not all tenants will meet their contractual obligations. When a tenant stops paying, it may be that you are in a race to just get them out before too much time has passed, and you may never see the funds owed.
However, not all situations are alike, though the steps you must take tend to be similar across the board. Whether you rent homes as furnished rentals to corporate professionals or travelers or you offer corporate apartments in a busy city, you have several actionable steps to take if a tenant is not paying as agreed:
- Build in a "Lease Termination" clause into the original lease document. This gives you the option of refusing to renew a lease when it reaches its contractual end. This can give you an entirely legal means of preventing a tenant who is chronically late with rent out of your property. In an appropriate window of time before the lease ends, simply send the tenant this notification.
- Ask for a corporate letter of financial responsibility - Another more preventative remedy is to have the tenant's employer accept financial responsibility for the property, rent and any damages. This guarantees you an immediate course of action should non-payment or chronically late payments become an issue.
- Issue a warning notice - An official written warning that a tenant is in violation of their rental agreement can be the first step in addressing the issue of non-payment in furnished rentals, though there are also additional notices (below) that are more formal.
- Five-Day Demand notice - This is a traditional and legal "first step" in collecting overdue rent on furnished rentals. It is a more formal reminder to the tenant that they are at risk of default on the lease, and gives them five days to make amends.
- Three-Day Pay or Quit notice - This is the next step in getting unpaid rent on your corporate apartments or housing, and it is often viewed as a precursor to eviction. Essentially, it is telling delinquent tenants in furnished rentals that they have three days to pay or quit the premises.
- Eviction - Obviously, this is the final option for those instances when tenants fail to pay you for your furnished rentals. Each state has different rules around evictions, and with short-term rentals there may be additional steps required.
Note that almost all of these options for collecting or dealing with non-payment are associated with forms, letters, and documents. You don't necessarily require a legal professional to help you with these matters. Instead, you can often find templates for them and use them as your situation deems necessary.
Keep in mind too that a tenant who has failed to pay for their rental may simply have forgotten or misunderstood the due dates. Communication is a huge part of being a landlord, so a checklist at the time a renter signs the lease may help any problems. Preventative measures are excellent for addressing challenges, and while the LOR or Letter of Responsibility for corporate employers relying on furnished rentals for their workers are great, you can also take simple steps to ensure payment.
For example, many privately owned corporate apartments ask for electronic payments through websites such as PayPal, and this can make it a very easy matter for a tenant to pay the rent. You may also find it necessary to reiterate the lease terms in writing if a problem seems to be emerging. For example, a renter may indicate that you are difficult to get into contact with and that they did not pay the rent because they could not locate you. Erasing this issue by creating simple payment methods, apart from handing you a check, overrides any future challenges.
When tenants fail to pay for corporate apartments it can seem like a major hassle is ahead. Fortunately, you can establish extremely easy terms in the lease agreement and through proactive steps such as a move-in checklist, electronic payments and a corporate LOR. Think a bit ahead of the game and you shouldn't run into any problems, but be prepared to deal with non-payments as soon as they occur.
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- Any property owner who has trusted a renter and who has wondered what they would do if that renter ceased paying or caused damages dreads the moment that their worst fears are realized.
- When a tenant stops paying, it may be that you are in a race to just get them out before too much time has passed, and you may never see the funds owed.
- Communication is a huge part of being a landlord, so a checklist at the time a renter signs the lease may help any problems.
- You may also find it necessary to reiterate the lease terms in writing if a problem seems to be emerging.