While real estate can be a great investment, renting out a property also comes with its own challenges. Dealing with maintenance and finding new tenants can be difficult, but the most stressful part of managing a rental is often collecting payment. When the mortgage is due and no money is coming in, a landlord’s position can suddenly become extremely precarious. While some renters are easy to work with and always pay their bill on time, others may go weeks or even months without offering up any payment. Here are the steps you should take if you find yourself dealing with a non-paying tenant.
Talk it out
This may sound obvious, but when a landlord has dealt with continual issues with certain tenants, failure to pay rent may be considered the last straw. It can be tempting to simply cut the power or turn off the water until they pay, but doing so could land you in legal trouble. Landlords need to give their tenants a three-day notice to let them know that they are done waiting and the rent needs to be in immediately. The tenants may have simply forgotten or may be struggling financially and need a few more days.
Make formal demands
If you are unable to reach an agreement or the tenant continues to fall behind on payments, it may be time to take legal action. The first thing you must do is make a final rent demand, either verbally or in writing. Be specific and include any taxes, late fees or utilities that will be tacked on top of the rent. This demand must be served according to proper legal standards, or the judge may dismiss your case. Typically, you will then need to wait three days after making this demand before you can file a legal claim.
Once you have waited the allotted time, you can file a nonpayment claim in the New York State Housing Court. If the tenant will not leave the property, you can file a warrant of eviction. If the tenant already left and returned the keys to you, you will need to file a civil or small claims case to request payment for any unpaid rent.
When you are seeking rent from a nonpaying tenant, consulting with an experienced attorney can protect you from the mistakes that are commonly made in service and paperwork. This can mean a faster, complete resolution that will solve the tenant issue and get your rental income flowing again.