As a landlord, you can do everything in your power to make a situation agreeable for a tenant, but the unfortunate reality is that sooner or later, you may find yourself facing a tenant who has stopped paying rent for some reason, or who is asking to get out of their lease early. Both of these situations are problematic for a variety of reasons, and the eviction process can be a nightmare for everyone involved, so it’s best to try and resolve problems if you can. If you can’t come to a compromise that works for everyone, though, you do have rights as the landlord. If you’re dealing with unpaid rent or an unhappy tenant who wants to leave before their lease is up, we’re here with some helpful advice.
What to Do When Your Tenant Stops Paying
It can be disheartening if, after all of your screening processes, you wind up with a tenant who stops turning in rent checks. Of course, a day or two late is understandable—we’re all human, after all—but when weeks or even months drag on with no payment coming your way, it’s time to take action.
Most tenants will be open to having a conversation about why they aren’t paying on time. Perhaps they were hit with an unexpected medical emergency and the accompanying bills, or they got into a car accident and have had to cover those expenses. Maybe they lost their job or are going through a divorce. There is usually a reason that people stop paying rent—most tenants aren’t simply neglecting their responsibilities and going out partying every night.
However, whatever the reason, the bottom line is that your bottom line is suffering. Have a sit down talk with your tenant and find out what’s really going on. Once you’ve heard their side of the story, you can make a decision about what to do.
Should You Evict or Negotiate?
Eviction processes can be complicated, expensive, and drawn out. If you haven’t been through the process before, you’ll want to be aware of what you’re getting into before you start down that road.
The Eviction Process in Chicago
If you decide to evict a tenant for non-payment, you must first notify them that you plan on starting the eviction process if they do not pay within a certain amount of days. If they don’t pay, you can then begin the eviction process. Eviction lawsuits must be filed in the same county that the property is located in. Once you do, the tenant will then receive a court summons and a court date. If they intend to fight the eviction, they will have to appear. If they appear in court, they’ll have to detail why they are fighting the eviction. There are a number of reasons that a tenant can fight their eviction, and if the case is over unpaid rent, they may choose to bring up issues of damage or lack of maintenance as a reason for the nonpayment—you will want to have any communications between the tenant and yourself on hand to prove that lack of maintenance is not the issue.
Due to the length of time that these proceedings can take—anywhere from five weeks to three months, assuming there are no delays—many landlords choose alternative methods for dealing with nonpayment. The most common alternative is negotiating with the tenant to figure out a smoother transition.
Common Negotiation Options
Instead of evicting tenants, some landlords choose to work out a solution that involves paying the tenant to move out so that the apartment can be re-leased sooner. Often, the reason a tenant isn’t paying and won’t vacate is because they can’t afford movers. While it’s understandable to sympathize with this plight, the reality is you aren’t obligated to provide charity to non-paying tenants. If you’d prefer avoiding a court case and want the unit vacated, you can consider working out a deal to pay for the tenant’s moving fees so that they can leave sooner. This is sometimes the best case scenario—while you are paying a tenant to leave, a flat fee can work out to be less expensive than taking them to court and evicting them over months of unpaid rent.
You can also work out a payment plan if the tenant thinks they can get back on track relatively soon—whether you want to explore this option has to do with the reliability of the tenant and whether you can trust that they will actually catch up, and how they can prove to you that they can be trusted—documentation of a new job, for instance. This can be a risky choice, because if they turn out to be untrustworthy, you’re back at square one with unpaid rent and a tenant who needs to go.
Talk with your property management company about the best option for what to do when your tenant stops paying. They likely have a lot of experience dealing with all kinds of tenants, and will be able to offer you sound, realistic advice based on the specifics of your property and the current rental market.
What About a Tenant Who Wants to Break Their Lease?
Another issue that you may have to deal with as a landlord is a tenant who wants to leave before their lease is up. Breaking a lease is generally unadvisable for tenants, but from time to time, someone may have a legitimate reason that they need to leave: job relocation, family emergency, loss of income, etc. Other times, tenants simply want out of their responsibility– perhaps they want to move in with a significant other, or maybe they don’t like their roommates, but whatever the case may be, you need to find a way to deal with their dissatisfaction.
As a landlord, it’s in your best interest to try and come to a compromise on the tenant’s requests; resistance may lead to them stopping paying rent, and then you have to deal with that, in addition to an unhappy tenant.
If a tenant leaves, you are not allowed to simply do nothing, wait out their lease, then sue them for the months they weren’t there/were not paying. You are obligated by law to try and fill the vacancy in a timely manner. Even if you have a full plate of other responsibilities, you have to start showing the unit as soon as possible. You can charge costs of advertising the unit to the tenant breaking the lease, but thankfully, you aren’t required to list it at a below-market price just to fill the vacancy faster.
Whatever reason the tenant gives for wanting out of their lease, it is often easier to try and work with them to get the situation resolved sooner, rather than argue with them and force them to stay or sue them for unpaid rent.
If the tenant who wants to break the lease is not the only person on the lease, it should be reiterated to the remaining roommates that they are still responsible for the total amount of the rent payment. Recouping unpaid rent from a departed tenant will usually involve suing the tenant, and your leases should have a clause that informs roommates of the potential of having to cover the total cost of the rent in case someone leaves. The remaining tenants may not know that they will be held responsible if one person leaves, and that can cause a domino effect of more unpaid rent. In other words, it’s best to communicate with everyone what the terms of their lease are, even in the event of one person breaking the lease. Try and get the departing tenant to find a sublet, but if they can’t, and you let them out of the lease, it’s up to you to fill the vacancy.
Don’t Get Overwhelmed
If all of this information makes you stressed out just reading it, that’s fair—dealing with unpaid rent, unhappy tenants, and broken leases can be nightmarish. Property management companies know that these issues pop up from time to time, and due to the volume of their businesses, have often dealt with these situations at least once or twice. They can help you track down tenants who aren’t paying on time (or at all), and they’ll be able to help you re-list vacant units, screen tenants, and take care of everything related to possible legal battles.
Here at Lofty, we want everyone who owns investment property to enjoy doing so, and we help facilitate that by managing every aspect of your property’s needs. We handle the difficult situations as well as the everyday minutiae of being a landlord, so that you can live the life you deserve.
Contact us anytime to learn more about how property management can make your life easier.
Speak with Lofty’s expert and managing broker Anthony Zammitt.