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Landlord Newsletter - Nonpayment of rent

The LPA Newsletter, April 2004


Dear Fellow Landlord,
This month, I have some bad news and some good news. The bad news is that the tenant laws across the country are in favor of the tenants. The good news is we can now avoid most tenant problems by being prepared for them. Remember: When screening new tenants, BEWARE! Don't accept any bad tenants in desperation!

In this issue of The LPA Newsletter:

  • This month marks the beginning a new series of Landlord Protection SPECIAL REPORTs, "What do I do when....?" In this issue, it's "What do I do when the Tenant doesn't pay?"
  • On the brighter side, we've included a few Tenant Excuses you may find amusing.
  • Our monthly LANDLORD TIP was provided by Ann Kaprat of The LPA. It's called "Don't Give In to Desperation!"

    Please e-mail us if you have any questions or would like to add or share any material / information. Remember, "It's better to have No tenant than to have a Bad tenant!" - Enjoy your Passover & Easter holidays and have an excellent month!
    John Nuzzolese
    John@theLPA.com



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    SPECIAL REPORT: #6

    What do I do when...

    The tenant doesn't pay?

    Nonpayment of rent is obviously one of the biggest problems facing landlords. It always was and probably will continue to be. But for now, we can take steps to minimize losses when rent isn't paid.

    Nonpayment of rent doesn't always mean the rent was not paid. A partial rent payment creates an unpaid portion. In many leases, including The LPA Lease, past due charges such as unpaid late fees are deemed payable as "added rent". Unpaid Added Rent is the same as unpaid Rent, valid grounds for eviction.

    If you need to collect unpaid rent, there is a legal process that must be followed.

    When rent is not paid on time, the landlord should be prepared to take action like an automated robot, to collect before too much time passes. Don't be strung along by the tenant waiting for some windfall that may never come.

    1. Late Rent Notice - Be prompt in issuing your tenant a late notice when the rent is not paid by the end of the rent grace period. (That is the date rent becomes late - in my lease it is after the 5th day after due date). I always recommend using a late notice that informs the tenant of late fees. (As long as your lease provides for late fees) I also think it's a good idea to let the tenant know that you or your management company operate on a schedule and the clock is always ticking each month.
    2. Phone call- If after you haven't received the rent or a response from the tenant within a reasonable time (2-4 days after sending/delivering the Late Notice), give the tenant a call to find out what is wrong. This can be done before the late notice is sent if you like. Give the tenant a "heads up" that the late fees can build daily. Also inform the tenant that on ____, 2004 the account automatically goes to the attorney's office for eviction procedings plus the attorneys fee will be added to the balance owed (if your lease provides for attorney fees like mine does.)
    3. Eviction Notice / Attorneys Letter - I prefer to send an attorney's warning letter (optional) instructing the tenant to pay all rent and late fees before actually commencing eviction in court. I send it along with a Notice to Pay Rent or Quit, Demand for Payment. (Ask your attorney to prepare a warning letter for pre-eviction situations.)
    4. Eviction Process - If the cure time in your eviction notice expires and the tenant has not paid, you must be ready to go forward with a court eviction. If you are unfamiliar with the process of evicting a tenant, I highly recommend you use a lawyer who is experienced in landlord tenant eviction cases. Unless you are an attorney or an expert at landlord tenant law, it is not a good idea to do it yourself the first time.

    When the tenant doesn't pay the rent, it is a serious matter not to be ignored. Many of us prefer to give the tenant another day and keep hoping that nothing is wrong because we don't want to believe anything is wrong. Just remember that the longer we give the tenant before trying to collect, the easier and more comfortable we make it for them to steal from us.


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    Excuse of the Day for 4/9/04:


    "I had to have the sewer cleaned. They got my son's ball, some toys and all kinds of crap out of there. The plumber said that I shouldn't pay the rent because the landlord should pay the plumber."

    - Gregory K., NY

    Excuse of the Day for 4/7/04:


    "My car was robbed and they stole the rent out from the glove compartment."

    Well if you car insurance doesn't cover you, I'm afraid we'll have to start eviction. - Joan M., CA

    Excuse of the Day for 4/1/04:


    "April Fools! You thought I was really going to have the rent today! Ha Ha."

    Ha ha. The late fee is being doubled and the rent is going up and I'm not even joking. - Submitted by Bill, VA

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    April 2004

    LANDLORD TIP

    Provided by Ann Kaprat of TheLPA.com

    Don't Give In to Desperation!

    It happens all the time for many landlords. You face a vacancy at just the worst possible time of the year. Or your circumstances just aren't right to weather a vacancy. Well, in this business, I've come to ccept Murphy's Law. You know, the old saying that "Whatever can go wrong will go wrong"?

    You are most vulnerable as a landlord when you are in dire need of a tenant. Your mortgage payment, utilities and other operating expenses are relentless and still must be paid, even while your rental property is not paying you. You may have just suffered a loss of rent through an eviction. You may have had a tenant just up and leave.

    DON'T LET MURPHY's LAW WIN! Stick to your guns! Don't lower your standards. That's how we get hurt...badly. Every time I felt forced to lower my screening standards and take a chance, I lived to regret it. Believe me, John Nuzzolese is right when he says, "It is better to have NO Tenant than a Bad tenant."




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    Quotations...



    As a general rule the most successful man in life is the man who has the best information.
    Benjamin Disraeli

    You cannot escape the responsibility of tomorrow by evading it today.
    Abraham Lincoln

    Courage is resistance to fear, mastery of fear - not absence of fear.
    Mark Twain

    He that is of the opinion money will do everything may well be suspected of doing everything for money.
    Benjamin Franklin

    Creditors have better memories than debtors.
    Benjamin Franklin

    Great services are not canceled by one act or by one single error.
    Benjamin Disraeli

    Go confidently in the direction of your dreams! Live the life you've imagined. As you simplify your life, the laws of the universe will be simpler.
    Henry David Thoreau

    Do not hire a man who does your work for money, but him who does it for love of it.
    Henry David Thoreau

    "How much did your last tenant problem cost you?"
    - John Nuzzolese


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