When your tenant stops paying rent, it can be frustrating and alarming. This 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.
With New Jersey residents still struggling to recover from the COVID-19 pandemic, you may be working with tenants who are not able to pay but want to stay in their homes. The moratorium on evictions will last until two months after Governor Murphy declares an end to the COVID-19 health crisis. This may put you in a difficult position, but we’ve found that most residents are willing to work with their landlords to get rent paid.
Today, we’re talking about rent collection practices outside of an emergency situation or a global health crisis, and how you can be sure you’re collecting rent on time.
Establish Rent Collection Policies in the Lease Agreement
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 Overdue
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. Listen to their situation. It will be a lot easier to work together if everyone is being heard. There could have been an unexpected expense or a temporary reduction in work hours.
You still want to hold your residents accountable for the full rent and late fees, but see if you can work out an understanding for when rent can be paid. Set up a payment arrangement, and get it in writing with specific dates. This will establish trust between both the landlord and tenant.
Filing for Eviction in New Jersey
Unless you’ve been accepting late rent from your tenant on a regular basis, you don’t need to serve a notice before you file for eviction. You can go to court and begin the process as soon as rent is officially late.
If you have made a practice of accepting late rental payments, you’ll need to serve a 30-Day Notice to your residents, informing them that the habitually late rent payments will result in a termination of the rental agreement at the end of 30 days, and an eviction will be filed.
Work with a New Jersey Property Manager
Collecting rent is too important; you have to be consistent, fair, and willing to have difficult conversations. If you’re struggling with tenants who don’t pay rent, work with a New Jersey property management company that help. We are experts at collecting on-time rental payments, so contact our team at KeyVest LLC.
