The first of the month has come and gone, and your tenant still hasn’t sent you their rent payment. As a landlord, you can only wait for so long for rent payments to clear. So, what can you do to recover unpaid rent from an apartment tenant? 

These are the legal and ethical avenues you can take for recovering unpaid debt. 

What Landlords Shouldn’t Do

Don’t Ignore the Grace Period

If the lease offers a grace period (typically 3-5 days), you have to give the tenant that time to come up with the rent. Some states will have mandatory grace periods. For instance, Colorado’s mandatory grace period is 7 days. After that grace period is over, you can charge a late fee.

Don’t Take Aggressive Tactics

While late rent payments are frustrating, you should never take aggressive measures to recoup it. You shouldn’t harass the tenant or use threatening language. You shouldn’t try to create a hostile environment to penalize the tenant. This is called constructive eviction and it is illegal. 

What are some examples of constructive eviction?

  • Changing the locks of the unit without warning
  • Cutting off utilities
  • Refusing to respond to repair requests

What Landlords Should Do

Approach with Understanding

While overdue rent payments are frustrating, you should always approach tenants who have missed their rent with compassion and understanding. There are plenty of good reasons why tenants can lapse on their rent schedule. 

These are some common reasons why tenants miss rent payments:

  • Job Loss: When a tenant unexpectedly loses their employment, they may not be able to afford a substantial expense like rent right away. This was a popular reason for missed rent payments in 2020 when the COVID-19 pandemic led to millions of job losses. 
  • Personal Emergencies: Personal emergencies like bereavement, illness or injury could put your tenant in a temporarily unstable financial state. 
  • Mistaken NSF Payments: NSF rent payments happen when tenants accidentally write checks without having enough in their bank account to cover the transaction. 
  • Willful Non-Payment: Tenants will sometimes withhold rent during disputes. For instance, a tenant may cover an essential repair out of their own pocket and deduct the expense from their upcoming rent payments. 

Use this information to plan your next steps. If they’re suffering from a job loss or personal emergency, discuss setting up a reasonable payment plan. If they’ve sent an NSF payment, ask them to check their bank account to see whether they can afford to make the payment this time around. And if they’re willfully not paying due to a dispute, see how you can resolve it quickly. 

Legal Options for Recovering Unpaid Rent

Contacting your tenant and having an open, compassionate discussion about the rent could lead to a simple resolution. But sometimes, this approach doesn’t work. In that case, landlords have legal options to recover the payments that they are owed.

Charge a Late Fee

After the grace period is up, you are allowed to charge the tenant a late fee, which can encourage them to prioritize repayment. 

Any late fee that you charge should comply with the standards set in the lease and state law. For instance, in Maryland, late fees cannot exceed 5% of the total rent and can only be charged after 10 days of non-payment.

Send a Formal Demand Letter

Send the tenant a formal demand letter. The letter should document the amount of rent that they owe, when that debt should be paid and the intent to sue in the case that those requirements are not met. If a tenant doesn’t settle, this letter can act as evidence in court. In some states, it’s a requirement before taking any legal action. 

File a Lawsuit for Unpaid Rent

If the tenant doesn’t settle the debts by the deadline listed in your formal demand letter, then you can take the tenant to small claims court. If the judge sides with you, the tenant will be court-ordered to make the payments. 

What many people don’t realize is that the court does not enforce these payments. Turn to Summit A*R’s debt recovery solutions for help. Our services can be useful for enforcing court-ordered rent collections in the aftermath of your legal case. 

Using a Debt Collection Agency

Taking a tenant to court might feel like an exhausting and impractical endeavor. If that’s the case, you should contact our professional debt collection agency. 

Our agency specializes in a variety of services that can help with landlord debt collection, from writing collection letters to conducting skip-tracing. Skip-tracing is a useful solution when you need to find tenants who have moved out without paying rent and haven’t informed you of their new addresses. Our skip-tracing department can find out where they ran off to and how to contact them again. 

Both residential and commercial landlords can recover unpaid rent with these services.

Ethical Rent Recovery

As you can see, there are laws put in place to protect tenants in times when they can’t pay their rent on time. Landlords can’t enforce late penalties before grace periods or use aggressive tactics to recover missing funds. There are similar rules in place for debt collectors.

The Fair Debt Collection Practices Act is a federal law that prohibits debt collectors from using aggressive tactics in order to recover funds from debtors. These aggressive tactics include harassing calls and threatening language. 

Our agents follow the FDCPA to a tee, which is why the firm has such a positive rating from the Better Business Bureau. They follow the P.H.D. Strategy (Preserve Human Dignity). Every single debtor is treated with respect and compassion. The ethical collection strategy yields better compliance than any aggressive and, frankly, illegal collection tactics.

Preventing Missed Rent Payments

As a landlord, what can you do to prevent this overdue rent problem from happening all over again? 

Screen Applicants

Screen any applicants who are interested in renting an apartment in your building. Screen their credit history and rental history to see whether they have a pattern of missed rent payments or evictions. 

Discontinue Leases

If you’re worried that a tenant will continue to miss rent payments, you do not have to renew their lease. Provide the proper amount of notice that you are not renewing the lease so that they have time to find a new living space. 

Eviction

Eviction should only be used as a final resort. Give the tenant a written notice to vacate the premises, citing a failure to pay rent as the reason. Typically, tenants are given a period of 30 days to leave their units. If they don’t leave by that deadline, you will have to go through an eviction lawsuit in court.                     

Recovering Funds and Respecting Tenant Rights

Recovering rent debt is a delicate process. You need to adhere to strict laws and you need to be compassionate to tenants’ financial situations. 

Our debt collection agency knows how to recover funds while respecting tenant rights and personal struggles. It’s a fine line, but we can walk it.

Did you find this article helpful? Just imagine how helpful our experts could be when it comes to your bottom line! Learn more about our full suite of services, or contact us today to discuss how we can help recover your lost revenue.