5 Things To Do When Tenant Stopped Paying Rent

You've rented out your property. Your tenant has been paying rent and all seems good. Suddenly, they stopped paying rent.

The first thing that comes to your mind may be to kick them out. But there are other things you can do to get the rental payment. Since you're here, you probably want to explore all the available options.

1. Contacting The Tenant

First, know that most tenants, regardless if they're an individual or corporate entity, are decent people. They pay their rent on time. Often times, there are reasons why a tenant stopped paying rent.

You can get in touch with your tenant by calling, sending a text message, or emailing them. This is the easiest way to remind them of the outstanding rent. At the same time, seek to understand their current situation.

2. Meet The Tenant

If texting or calling your tenant doesn't work, then you may want to arrange to meet up with them at your property. You can explore solutions on getting the rental paid. Having met your tenant means a few things:

• Your tenant is not avoiding you
• You get the opportunity to inspect your property for any damages, unauthorised usage or alterations
• You get to have a face-to-face conversation with your tenant to understand his situation better. Maybe he has lost his job. Maybe his business is not doing well. Or maybe he has a family member that is critically ill.

By meeting him, the tenant knows that you are sincere but serious about what's going on.

3. Issuing Warning Letter

When you have exhausted all diplomatic measures to make your tenant pay up, a more drastic measure is needed. You may serve the warning letter in your own name, your company's name or you may engage your lawyer to serve it to your tenant.

A warning letter should state clearly:

• How much rent is being owed
• How long it has been owed
• Deadline to make payment
• Consequence if payment not received by the deadline

The deadline can be a specific date. Or It can be a certain number of days from the date of the warning letter. The important thing is the deadline must be reasonable for the nature of use at your property.

Typically, the consequence if a tenant refuses to pay is immediate termination of lease and eviction thereafter. It's important to mention any inventory and equipment belonging to your tenant, left in your property upon eviction, will be deemed abandoned by your tenant.

This authorises you to auction, sell or dispose of them, at your full discretion. The cost of auction, sale and disposal of these inventories shall be borne by your tenant. But you can use the proceeds to offset the outstanding amount owed.

You will learn more about eviction in option 5.

4. Engaging a Licensed Debt Collector

Chasing after your tenant for payment is no fun. Thankfully, there are licensed debt collectors who would gladly do the work for you.

Licensed debt collectors vary in how they charge for their services. There are some that collect payment only after you have received the amount owed by your tenant. The fee can be up to 40%.

Considering that you may not have received anything from the tenant at all, 40% fee may not be a bad deal after all. It certainly beats engaging a lawyer and going to court to enforce your rights onto your tenant.

5. Giving Tenant the Boot

If you've tried all diplomatic ways and your tenant still doesn't pay rent, then it's time to use the last resort. It's not fair for you to have the tenant staying for free at your property.

If you're looking to evict your tenant, here are the steps to follow:

1. Issue a written termination of tenancy notice to your tenant, mentioning when they need to move out
2. Obtain a court order to enforce the tenancy notice above
3. Apply for a writ of possession
4. Lastly, have court bailiff or sheriff to attend eviction and repossession of your property

Note: We are not lawyers. Please consult a lawyer if you need legal advice on evicting a tenant that stopped paying rent.

The entire court proceeding can cost upwards of $20,000 and can easily take between 6 and 9 months.

Upon the termination of lease and eviction, anything left behind by your tenant in the property belongs to you and is at your disposal.

Your tenant isn't allowed to re-enter your property. Any attempt by your tenant to re-enter and remove any item in your property will be considered trespassing and theft. He or she can be legally prosecuted.

Conclusion

We've covered most available options when your tenant stopped paying rent, from the most diplomatic means to giving the ultimatum.

Enforcing your rights as a landlord can be time-consuming and costly. Therefore, when looking for your next tenant, it's always better to put in place a thorough due diligence process. As the saying goes, prevention is better than cure.

If you're looking to screen your next prospective tenants, Tenant Griffin database is here to help you.