Finding a tenant is easy, however finding a good tenant is a bit more challenging.
When a tenant hasn’t paid their rent on time, you need to TAKE ACTION before it is too late.
Rental contracts usually state the monthly rent is due on the 1st day of the new month. So, the 1st has come and gone, yet there is no deposit in your account.
Next, the tenant ignores your calls or has all kinds of excuses why he can’t pay right now.
Then come the hollow excuses and empty promises of when he will be able to make payment.
Unfortunately, we are human, and many owners make the mistake of allowing things to slide. And, before they realise it, the tenant is so far behind with his debt growing day by day…
Owners of rental properties are not necessarily heartless or without emotion and understanding.
Just like the people renting their properties, they have expenses that need to be paid whether the tenants pays or not.
Renting out a house, flat or even a shop is a business, relying on an income.
Although a landlord may have sympathy with the rental occupant, most landlords can’t afford not to be paid. Therefore cannot allow someone to stay for free – especially not in South Africa.
3 Kinds of Tenants Who Do Not Pay
Rental tenants can be classified as being in one of three categories:
- Tenants who regularly either pay late or sometimes even skip a month;
- Those who, after a short while, stop paying completely; and
- Tenants who only fall behind on the odd occasion.
Most people suffer cash flow problems from time to time for valid reasons. Owners should not worry too much if a solid tenant comes up with the money a day or two late every now and again.
Keep in mind banking business hours, weekends or public holidays, and the fact that even EFTs sometimes take 24 to 48 hours to be processed.
If a tenant pays late every month or ignores the payment terms of the lease on a regular basis, this may spell trouble and it should be managed properly.
Tenants need to realise that the conditions of the rental contract are binding, and legal steps will be taken if they are broken.
When should you as an owner take action?
Allowing a tenant some leeway, especially in conditions such as the above, is not the end of the world.
However, allowing them to abuse your kindness is something completely different.
This happens in far too many cases.
Non-paying tenants sometimes believe the landlord has an obligation to be sympathetic to their circumstances.
After all, it’s not the tenant’s fault he lost his job, or his wife got sick, or his car was stolen…
Unfortunately, whatever the reason, the owner still needs to be paid.
Take Immediate Action
Don’t delay – the sooner you act, the better your chances are in getting your tenant to pay up or move out.
Even if the contract says the rent must be paid on the 1st of the month but includes a cause that says he has until the 7th, the owner should inform the tenant in writing as soon as the rent has not been paid.
Be fair, so don’t threaten with legal steps if the 1st was on a Saturday but note that payment that should have been received on the 1st has not been received (do it 24 hours after the end of the first business day of the new month).
Inform the tenant that he/she has until the 7th or the first business day thereafter to rectify the matter.
This will let the tenant realise you are serious and mean business.
They should pay up or at least make a suitable arrangement before things go too far.
However, don’t wait until the 7th before you send the first letter.
However, in certain cases (regular late payment etc.) you need to take further action, sooner rather than later.
If the tenant does not respond or does not pay the rent, it is important to issue a notice (20 days in terms of the CPA). The lease is then cancelled if all payments are not settled within that time frame.
You must issue a summons and should he yet again fails to respond, the landlord is legally entitled to cancel the lease and start the eviction process.
Make sure you have a legally binding lease agreement that includes the date of payment and all other legal criteria.
Tip: You can guarantee your rental income by simply taking out a rental insurance to secure the income and pay for legal cost.
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