|Landlord Newsletter April 26, 2011|
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April 26, 2011
Dear Fellow Landlord,
In this issue:
Please e-mail us if you have any questions or would like to add or share any material / information.
By John Nuzzolese
One of the most important elements of modern residential leases today is the Late Fee clause. In order to encourage timely rent and discourage late payments, I highly recommend you have a solid late charge clause. Having the clause in your lease is only part of protecting yourself against late rent.
The first step is to explain and warn the tenant about the late fee when going over the lease before signing it. I'll even ask the tenant not to sign the lease if they think that late payments are in their future. I also inform the tenants that I belong to a national tenant reporting bureau and have the power to adversely affect the tenant's credit, so.. "Don't mess up with your rent. It's not worth it." If the tenant values his credit and plans on buying a home someday, I remind them that it is very important to prioritize the rent payment and keep their credit clean.
How much should the late fee be? I feel late charges should hurt. I don't want to make it so high that a struggling good tenant will fall even further behind, but it should be a painful enough fee that the tenant will not want to pay again. Ever.
Many tenants who incur a late fee don't really mind paying it in their own good time. That's why it is important to also charge a Daily Late Charge in addition to the initial late fee. It gives the tenant an incentive to hurry up and pay the initial late fee before it grows into an even more painful hit.
Another item we include in our Late Charge clause is a Bounced Check Penalty. I usually make the bounced check charge the same as the inital late fee. I also prepare the tenant that if the rent check bounces, it will cause the rent to be late and they will be responsible for a late charge too.
I want to stress to you that the landlord protection clauses in our lease or any other lease are there to protect you, but sometimes you will have to enforce the lease. Many landlords are afraid to lose their friendly relationship with the tenants when it comes to enforcing the lease. Remember that this is your money we are talking about. This is your property they are occupying and you deserve to have a tenant who lives up to his or her agreement with you. Send the late fee notices and make the tenants pay the penalties. You have your own bills and you want your rent to be on time. That's why you rented to them in the first place.
How to Enforce Late Fees
when the Tenant won't pay them willingly...
You are not alone. I know the feeling. Many, many landlords experience this frustration.
Because the tenant pays the rent, though late, most landlords are willing to let it slide. You may be tempted to look the other way, reasoning that the tenant isn't so bad. "At least the rent is getting paid", you might think. Why rock the boat, right? "At least I'm not dealing with an eviction... yet."
You might also be thinking that you can collect these unpaid charges from the security deposit...
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Ask the Attorney
John Reno also does Mortgage Loan Modifications (Nationwide).
If you have a landlord tenant problem you'd like to ask a question about, please feel free to e-mail me your question.
Dear Mr. Reno:
A: You're better off just letting the lease expire, then serve a 30 day notice - no reason required. If you try to evict her mid-lease while she's current, you're in for nine miles of rough road (like you've seen.)
Foreword by John Nuzzolese
Tenant Screening Toolkit, By Kim Herbel
One of the most important elements of being successful as a landlord is the practice of proper tenant screening. As a landlord herself, Kim Herbel has learned and mastered the art of qualifying good tenant prospects and eliminating bad ones.
The book supplies helpful forms and links to fully prepare the reader with everything needed to screen a tenant. By screening carefully, you will find why I always say, "95% of tenant problems can be eliminated in the screening process!" ... and Thank you Kim, for the opportunity to write the foreward in your book! -John Nuzzolese, President of The Landlord Protection Agency
Kim offers a special 10% off discount coupon code for LPA members and guests, in the book checkout process! Use coupon code: "LPA."
Memorable Tenant Excuses
"I want to pay the rent, I really do, but I just can't find a job I like. I have an interview at Taco Bell tomorrow, wish me luck" A job you LIKE???? Take any job and get me my rent! - Desiree, CA
"I have to save up for another place. A roach crawled into my ear and I had to have it removed in the emergency room!" This tenant is 2 months behind in the rent and by the looks of the housekeeping, it is not suprising that there are roaches. - Walter M., Baltimore, MD
"I am not paying rent until I know you are paying the mortgage I will not spend my money on rent every month if you don't have to."
Stupidity must run real deep in this bloodline. I don't know if they thought I was going to fall for this or what. - Cheryl W., Antelope Valley, Ca
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