Collecting on-time rental payments is an important part of being a landlord or a property manager. It has a direct impact on your cash flow and your ROI, so minimizing late and missing payments is important. Consistent rent collection starts with a good lease and requires clear communication on expectations and responsibilities. It’s also essential to enforce any penalties or late fees.
Establish Rent Collection Policies
Make sure your tenant understands your expectations when it comes to rent. The lease should be clear about when rent is to be paid, how much is due, and how it should be delivered. The lease agreement must also state whether there is a grace period and if a late fee will be charged. Discuss these things before your tenants sign the lease so you know everyone is on the same page. When the rent collection policy is documented, it’s not easy for tenants to claim they didn’t know when rent was due or they weren’t aware of a late fee.
Communicate with Tenants when Rent is Late
If your due date and your grace period pass and rent still hasn’t been paid, contact your tenant. There may be an explanation for why rent is late. Don’t start yelling and threatening; instead, listen to their situation. It will be a lot easier to work together if everyone is being heard. Maybe they had an unexpected expense or a temporary reduction in work hours. You still need to hold them accountable for the full rent and late fees, but try to get an understanding of when rent will be paid. If they can set up a payment arrangement, make sure you get it in writing with firm due dates. This will earn some trust between both the landlord and tenant. Evictions are bad for everyone; so work together when you can, and keep the lines of communication open as you continue to try collecting rent.
Serve a Three Day Notice
As soon as the tenant becomes delinquent, serve a Three Day Notice. This is required before you start an eviction in Denver. It gives the tenant three days to pay the rent or move out. It’s important that you serve this right away, even while you’re communicating with the tenant and working out a payment schedule. It protects you in case you need to move forward with the eviction. Usually, you’ll receive your rental payment within those three days. If you don’t, and your tenants are unwilling to communicate with you, moving forward with the eviction may be your only option.
Work with a Landlord Attorney
It’s important that you understand your rights in this situation as well as your tenant’s. It’s illegal for you to take action on your own. You cannot change the locks on the doors or shut off the utilities. You must follow the legal steps that are required to regain possession of your property. We recommend that if you cannot collect rent after serving a Three Day Notice and your tenants refuse to work with you on a payment plan, you contact an experienced landlord attorney to help with the court process. There’s too much at stake to risk making a costly error.
We’d be happy to help you if your tenants aren’t paying rent. For any questions about Denver property management, please contact us at Walters & Company Property Management.