Strategies for Dealing with Late Rent Payments

Late payments are the beginning of disputes and financial troubles for landlords. Tenants that do not pay rent on time can affect the business plan of that investment property and create unnecessary tensions for the landlord. Sometimes, it can be just a simple case of an innocent mistake, but other times it can turn into a bad payment pattern that will force you to take action. 

In this article, we aim to help landlords handle this issue efficiently. 

Have it written down in your lease agreement

Experts always say it’s better to prevent than to treat. Rental property owners can also take note of this piece of wisdom. Before letting the tenant in, have all the rules and regulations written down, including the date of payment and consequences and procedures for being late. 

This is the beginning of a good tenant-landlord relationship. Review it together, and see that your new tenant understands and agrees with your policies. This will give them no excuse to say they didn’t know what late payments would result in, and you will have guaranteed proof you had clear communication about this matter from the very beginning in case you will be forced to take legal action. 

Implement late fees

Establishing a late fee, which should better go in the lease agreement that the tenant signs in the beginning. Having to pay extra because they’re late will encourage them to be more responsible in handling this matter at the established time since nobody wants to spend more necessary just for this mistake. 

A late fee would usually be about 5% of the rent or even less, depending on what you agree with when you start. We recommend checking your local laws to see how much you can charge in this situation, as there may be a maximum you’re allowed to. 

Let tenants pay online

A recent survey has found that paying rent online increases the likelihood of it being paid on time. As paying rent can be a little time-consuming for both the tenant and the landlord, we now have numerous online payment methods at our disposal that we can benefit from. More so, automatic payments make it even less likely to be late with the rent, decreasing the chance significantly. 

The online payment method makes you appeal to the younger pool of tenants, who will be more inclined to make a transfer than meet with you. The young, new generation of renters have technology in their hearts and will appreciate the chance to do things with which they’re more familiar. 

Keep records

Completing the method from above, which helps you keep an accurate track of payments, we want to encourage you to keep track of everything, from payments to all communication that you have available. Keep all documents you sign, conversions you engage in via text messages or emails, and anything else you view as necessary. A track of payments will serve as proof of being late and will help you further in a legal dispute. 

Late rent notice

Another option to deal with this is to send a late rent notice. This formal document lets the tenants know they have missed a payment or several. It serves as a warning, which the tenant is more likely to take seriously. According to Fostr Property Management, this is made before the beginning of an eviction process, showing you did everything you could to stop the tenant’s bad payment behavior. 

This notice will include the established date of the rent payment, how much of the rent the tenant still has to pay, and the late fees that accompany the late payment. 

Payment plan

For some reason, the tenant may no longer be able to pay the rent according to the previous payment plan. This requires a negotiation on both sides. Have a sit down with him and go over what you can do to help him make the rent on time. This is especially necessary when the tenant has shown responsive and responsible behavior in the past and may be facing financial hardship at the moment. 

Report the payer to a Credit Bureau

This must be states in the lease agreement and the tenant has to know this can happen. Most of tenants are interested in building a good credit score. This is a very good encouragement to help them pay on time as they don’t want a bad credit report. 

Start the eviction process

If you’ve done absolutely everything you can and the tenant still doesn’t cooperate, it’s time to send a pay-or-quit notice. This is a first legal step in the eviction process. This notice requires the tenant to pay the remaining amount or quit. The tenant is usually given 3 days to pay or else the matter will be taken to the court. 


This is often a less pleasing part of this business but one that needs serious attention so things don’t get out of hand. Be consistent in engaging all of these methods when you see necessary as the tenants must know you are being serious and they can not have this behaviour moving forward. 

How can a property manager help?

A property manager can be a huge help in turning this situation around. They’re pros when it comes to handling late payments and offer effective encouragement to bad tenants. They can also collect the rent since they’re usually closer to the property, create all the legal documents necessary and deal with everything that may seem troublesome while the landlord can oversee the more pleasing aspects of his property. 

Get in touch with us today and learn more about our services.