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Ask Brian: How to Deal With Checks Marked for Current Rent When Back Rent is Still Due?

By Brian Kline | October 4, 2022

Ask Brian is a weekly column by Real Estate Expert Brian Kline. If you have questions on real estate investing, DIY, home buying/selling, or other housing inquiries please email your questions to [email protected].

Question from Howard in NV: Hi Brian, I have a duplex and four rental houses, and I’ve been an active landlord for 16 years. I think I do a rather good job of screening tenants and seldom have a problem with late rent payments. However, one of my tenants did fall behind on payments during the COVID-19 rent/eviction crisis. He was out of work as a restaurant manager for quite a while. At one point he fell three months behind on the rent. Fortunately, he was quick about asking for government assistance and got a rent voucher by the third month that covered the two previous months (but not the month that he received the voucher). I know he bounced in and out of several part-time jobs for at least the next year and struggled financially. However, he did stay current with his rent, except for that third month which was not covered by the voucher. The bottom line is that he is still one month behind on his rent. 

House for rent 2

Other than that, he has been a good tenant, so I haven’t made a big deal about him being delinquent by one month until recently. After he got back to work full-time at his previous job, I figured he needed some time to catch up on his finances and that he would pay the back rent when he could. Now it’s been several months, and I hadn’t heard that he has a plan to pay the back rent. So, I finally called him. He acted surprised that I was expecting to be paid for the missing month’s rent. He thinks the voucher for the two months is all that he owes for the time he couldn’t pay rent. Shortly before the end of August, I sent him a delinquent notice explaining that I expected the missing month’s rent to be paid but I am willing to work with him up to a point. He countered by sending me the September rent check with a statement in the memorandum line that said: “For September Rent Only.” There was also a short note included that said he specifically does not want the money applied to the delinquency notice that I sent (it showed the delinquent amount, September rent, and total due). My plan was to continue sending delinquent notices shortly before the rent was due to encourage him to start paying down the balance. Now, it seems clear that he doesn’t plan to pay the back rent. What do I do next?

Answer: Hello Howard. I feel for you and other landlords that are still trying to recover payments that were not made during the eviction moratorium. Unfortunately, there are a ton of laws, rules, and regulations on the books at the local, state, and federal levels about what landlords can and cannot do. You are going to need to research the options available to you or ask a real estate attorney for help if the attorney fee isn’t more than the back rent. Some locations also have mediation boards or processes to help resolve these issues.

Otherwise, what I can offer you are some known and proven ways to encourage your renter to make an honest effort to pay the delinquent rent before starting the eviction process.

  • As already mentioned, make sure you are up to date on your local tenant laws and of course state and federal laws.
  • Review the specific clauses in the renter’s lease that apply to delinquent payments.
  • Inform the renter of their lease responsibilities. (Howard, in your situation it doesn’t sound like your renter clearly understands his responsibilities.)
  • Try to give delinquent renters a few options on how to make up delinquent payments.
  • Offer a discount if they pay in full today, in a week, or by the end of the month.
  • Build urgency in your communications.
  • Include any allowed late and interest fees on the monthly delinquency notice.
  • If allowed, let them know you have applied their security deposit to the back rent and that they now need to pay a new (and higher) deposit. This should be added to the monthly delinquency notice.
  • Mention that rent refusal could lead to credit rating damage.
  • Suggest a time to visit with them, face to face at their doorstep and at a safe distance, to discuss the matter. Ask them to commit to a payment schedule and have them sign an agreed payment schedule.
  • Remind tenants you will pursue payment from guarantors (if there are any) and that they will likely need guarantors for their next rental.
  • Suggest that you’ll forgive the delinquent rent if they move out by the end of the month.
  • Remind them when their lease will expire and let them know it will not be renewed if the issue isn’t resolved by then.
  • Give them a set date to begin eviction proceedings and provide a written copy of the process.

Howard, you might notice that the rent collection strategy progresses from amicable to harder core. It revolves around communications, encouragement, decisiveness, and good personal financial management. It’s intended to be a positive, helpful approach backed by legal documents and consequences.

What suggestions can you add to help landlords collect delinquent rent? Please comment.

Our weekly Ask Brian column welcomes questions from readers of all experience levels with residential real estate. Please email your questions or inquiries to [email protected].

Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years with articles listed on Yahoo Finance, Benzinga, and uRBN. Brian is a regular contributor at Realty Biz News
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