As you probably know, owning a rental property can be a great source of cash flow and future equity appreciation. But as with any other type of investment, it has its fair share of challenges. Most dreaded among these challenges is renting
Renting to the wrong tenant, needless to say, will not only cost you money but cause you a lot of headaches as well. Imagine having a tenant who hasn’t paid rent in two months and pays rent late every month. The experience can be both frustrating and harrowing.
Rent is the support any rental business. When your tenant is not paying rent, it’s a crucial time for you as the property owner or landlord.
Has your Kansas City tenant stopped paying rent? Now what? In today’s article, you are going to learn what to do when that happens.
How to deal with tenants not paying rent.
1. Keep detailed records of your tenant’s rent payments.
The work of a landlord isn’t easy, especially if you are dealing with several tenants or several properties. That said, it’s always important to keep up-to-date with tenant records.
Keeping accurate records of a tenant’s payment will make it easier for you to double check if a renter owes rent and exactly how late they are.
It is also important to keep all necessary documents in case you must carry out an eviction. All papers will help fight your case against the renter.
2. Review the lease or rental agreement.
You also want to review the lease or rental agreement when it comes to rent-related matters. It should detail the important things like:
- The rent amount – The state of Missouri doesn’t have rent control communities. Consequently, there are no limits as to how much you can charge for rent.
- How rent should be paid – Some examples of rent payment methods include credit card, cash, money order, check, or online rent payments.
- When rent is due – Generally, rent is due on the first day of the month unless the lease states otherwise. The lease should also state what happens if the due date falls on a holiday or weekend.
- Where rent is due – This is the address where tenants should send the rent. It could be, for instance, the business address of the landlord.
- A grace period – If you choose to give a grace period for rent then it should be stated in the rental agreement.
- Consequences of paying rent late – This may include late rent fees and eviction.
- The extra fees when the rent check bounces.
- The time of notice to provide when you need to raise the rent.
So, if the grace period has ended, act immediately. And, if you have specified the late rent fee, then impose the charge on the renter as well.
From here on out, keep records of every step you’ve taken once you’ve made sure that the tenant has not paid rent. They may prove extremely beneficial when things take a legal turn.
3. Talk to your tenant.
Find out why your tenant hasn’t paid the rent. You can simply do this over the phone or in person. Also, remember the thing about keeping records? Well, follow this up with a written notice for non-payment of rent.
Your tenant could have misunderstood how the grace period or how the late-fee policy works. Or perhaps the renter merely forgot, or there was a bank error. Whatever the reason, make it clear that they need to pay rent on time, or they can’t stay.
4. Understand Kansas City rental laws.
As an investor in real estate, understanding the local and statewide landlord-tenant laws is key. So, prior to taking any legal steps on your renter, make sure you review all laws that pertain to rent-related issues.
Familiarize yourself with your rights as well as the rights of your tenant. This will help prevent your case from being thrown out as a result of your illegal actions.
For instance, no matter what your renter has done, you cannot evict them from the property using self-help procedures. Some examples of these self-help procedures include shutting off utilities or changing the locks on the door of the rental unit.
Missouri tenants also have a right to withhold rent or also called “repair and deduct.” While not as likely, it may also be possible that your renter is paying rent late because you failed to honor their repair request.
But for them to resort to this option, they must meet certain legal requirements. For instance, the:
- Habitability issue must qualify for repair-and-deduct or rent withholding.
- Tenant must have sent you adequate notice of the issue before applying their right to withhold rent or repair and deduct remedy.
5. Send a “Pay or Quit” Notice.
Many states, including Missouri, require landlords to give their renter a “Pay or Quit” notice when a tenant is behind on rent.
Essentially, the notice to pay or quit tells the tenant that they have X amount of days to either pay the rent due or vacate. In the state of Missouri, this period must be a minimum of 5 days. If your renter fails to honor this past due rent notice, then you can file for their eviction in court.
6. File for tenant eviction.
If all else has failed, the next course of action would be to evict your Kansas City tenant. Remember, the only way to evict a tenant is by following the due course of the law. Again, you cannot turn off essential utilities or lock your tenant out of their rental unit.
The first step in evicting a renter usually starts with a legal cause. In this case, it’s nonpayment of rent. Next, you’ll need to fill out the required paperwork at your local courthouse. The clerk will most likely want to see the “Pay or Quit” notice, so bring it with you.
Lastly, you’ll need to show up to your court date – usually 2-6 weeks after filing the paperwork. If you are successful, you’ll need to aquire the help of the sheriff to forcefully evict the tenant.
7. Consider hiring a property manager.
Dealing with your Kansas City renters can sometimes be a stressful and time-consuming affair. If you find dealing with tenants daunting, consider hiring a property manager.
Property managers are not only trained for the job, but they also have systems in place to deal with rogue tenants.
There you have it. Seven things to do when your Kansas City renter stops paying rent. Having a renter who doesn’t pay rent is a serious issue that can have a devastating effect on your business.
Now that you’re aware of what needs to be done, remember that when it occurs, take it seriously and follow these suggestions to remedy the situation as soon as possible.