What to do when the rent is not paid?

You're in the landlord business, the rent must be paid. It's never too early to make this expectation clear and nonnegotiable. One of our favorite lines when we used to sign leases in person, "If you don't pay the rent, it takes all the fun out of it for us." We would also say, "It's important to understand if you don't pay the electric bill, they'll turn your lights off. If you don't pay the rent, you won't be living in our house."

I mean, let's face it. We all know every financial transaction is a two-way street. One party delivers goods and services and then they expect payment in return. We never go in a restaurant and order dinner and then leave without paying. We never walk out of a department store with something in our pocket that we didn't stop by the cashier and pay for. But for some reason, when it's rent, the whole concept gets a little cloudier. Maybe because it's a bigger sacrifice or requires better money management to do the right thing, but I promise you at some point, the day will come when the tenant will bring you an excuse instead of bringing you the rent.

What if their transmission goes out. They need new tires. They've had a death in the family. There are no end to the list of other emergencies. Regardless of the reason, we must collect rent and we must teach and emphasize that rent is a number one priority. Mr. Tenant, put it at the top of your list. Remember the basics: shelter, food, clothing, utilities. When you say to me, "I can have you the rent on the 20th," you're basically saying, "I need you to loan me the money for the rent from now to the 20th," and there are a lot of good sources for these loans like your friends and family and maybe folks at church, maybe the Salvation Army but not us. We are the landlord, not the bank. Our clients expect us to give them rent, not make a loan on their behalf.

We want to collect this month and we want to set expectations for all the future months. Landlords also need to know a failure to act means the clock doesn't start. Only with legal action can we get this process going. You should file a dispossession warrant and send a demand for possession letter no later than the 10th or the next business day. Most leases provide a grace period, maybe three days or five days, and you can act on the next day. I want you to know, a tenant can regain their good standing. All they have to do is pay in full the rent, the late fees, the filing fees, and reimburse the legal fees and all is good. They don't have to move out. But because it takes us three weeks to gain possession, three weeks to go through the legal process, it's important that we crank it up by the 10th.

Bear in mind, if it does run to fruition and we get our house back, it's not going to be rent-ready the day we get it back and a month will be gone. It's an important business practice. Start that clock, start legal action. Throughout all this, it's essentially important that we are fair and we treat all consistently. Good ethics and fair housing laws all demand that we treat all parties with uniform processes. If we do a special favor for one, perhaps a tenant that we particularly like, that could be judged to be unfair to another tenant who doesn't get the same opportunity or the same waiver or the same exception.

If we're going to make exceptions in our policies, let's define them in advance. Let's go through the guidelines. What are we willing to do? When are we willing to do it? That way, we can adhere to these with all of our customers the same. We want to stay in business, we must collect the rent. We want to always be respectful and we always act lawfully. You've all heard the story of the landlord who goes over and takes the front door off and says, "Hey, I'll be back in a few days. I got to do some repairs when the rent comes in." Don't do that. Stay within the law. Show respect. The entire tenancy will be affected positively by your willingness to insist on payment as agreed first time every time. May not be fun, but it's necessary. Remember, you're in the landlord business.