In today’s blog, we’ll address a question new clients frequently ask us: what happens if my tenant doesn’t pay rent?
Your rental agreement should explain exactly what happens when a tenant doesn’t pay rent. When putting together your agreement, make sure it states when rent is due and how it should be paid. Your rental agreement must also address whether late fees are charged after a certain date and how the landlord will handle collecting late rent. You will have a hard time enforcing timely rent payments if you don’t address the issue in your rental agreement.
Due Dates and Late Fees
Having rent due on the first day of the month is a pretty standard policy. Providing a grace period of a couple days shows goodwill and flexibility on your part, so wait to charge a late fee until a couple days after the due date. Most landlords pick a day between the third of the month and the fifth of the month as the day the late fee gets charged. At Residential Property Management in Portland, our late fees go into effect at midnight on the fourth day. Rent is not considered late if it’s received before then. This extends to mailed rent payments; the postmark must be the fourth of the month or earlier. Be sure this policy is clear in your rental agreement.
Late fees provide an incentive for tenants to get the rent paid and it also compensates you for the extra work that’s required when rent is late. If you still don’t receive your rent after a late fee is assessed, you’ll need to send a Non-Payment of Rent Notice, and it needs to be worded correctly. We always recommend that you get legal help at this point. The Notice simply needs to state that rent is late and needs to be paid by a certain date, or eviction proceedings will begin. You can purchase a form that’s legally compliant in Oregon, but have an attorney review it. A seemingly innocent error can make that Notice impossible to enforce. A lawyer will know when you can issue this form and what it needs to say.
If you mail the Notice to your tenant, there are additional days that must be calculated into the notice period. You also have to wait out the notice period itself. If your tenant has still not paid rent by the day and time the Notice expires, you can and should file for eviction. You can cancel the eviction if your tenant pays rent after being served a summons for court. Or, if you decide you want the tenant out, you can allow it to move forward.
Avoid problems with a well written and detailed rental agreement, proper Notice service and eviction filing as soon as it’s possible. If you have any questions about this blog or where you might find Oregon compliant non-payment of rent notices, feel free to contact us at Residential Property Management.