Sending a past-due rent notice can be a great way to gently remind your tenants of owed rent and encourage future on-time payments.
A past-due rent notice is a letter informing and reminding your tenant that the rent is late. Sending a past-due rent notice to your tenants can be an effective way to remind your tenants of owed rent and encourage future on-time payments.
In this article, we take a closer look at what a past-due rent notice is, when to use one, and how you can avoid late rent in the future.
Also referred to as a late rent notice, a past-due rent notice is a letter that informs current tenants that they are late on their obligation to pay the rent in any particular payment period. This notice is also important for your records, should tenants continuously pay the rent late. A past-due rent notice acts as an important reminder of the tenant’s legal obligation in regard to the current lease agreement and is also where you will want to outline any late fees that may have been accrued.
There may be some instances where a tenant withholds rent, such as if the landlord has failed to complete major maintenance issues. Under these circumstances, the landlord would not be able to penalize late payments. The exact treatment of late payments and landlord and tenant obligations vary by state, so refer to your local landlord-tenant law if uncertain.
A late rent notice should generally include the following details:
Landlord Studio offers a free late rent notice template that you can review and use.
Date (dd/mm/yyyy): _______________
Tenant’s name(s): _________________
Address of rental unit:
This notice is to inform you that we have not received your rent payment which was due on __________. This payment is owed for the time period of ________ to ________.
According to the terms of your rental agreement, you are also responsible for a late rent fee of $______. In combination with the rent payment, the total amount of ________ is due by ______(date)______.
If you have any questions or believe this is a mistake, you can contact me at (___) ___-_____.
Landlord or property manager’s signature
A 3 day notice, otherwise known as a pay or quit notice is a more formal version of a past-due rent notice. Many states require this formal letter before the landlord can begin the eviction process.
Due to the fact it is a more formal notice, the rules around delivery and language are more strict. Typically, landlords must deliver the 3 day pay or quit notice directly to the tenant or via certified mail. If they can’t be reached, the letter can be given to an adult at the property or at their place of work. If no suitable person can be found, it will be posted on the property, such as taped to the front door. In both of these cases, a version must also be mailed to the tenant’s address.
State and city rental laws vary. For example, some states have legal grace periods and some have caps on late fee amounts. Some states have a five day grace period, and you can only deliver a late rent notice if the grace period has passed. As such, it’s important to research your local ordinances before sending a notice.
On top of this, some states have specific regulations as to how landlords need to deliver a late rent notice. For example, some stipulate that they must be delivered through certified mail or in person, while others allow them to be sent by email.
It’s important to understand local and state laws in this regard. It’s also important to consider why you’re delivering the past-due rent notice. For example, if this is the first time a tenant has been late, a friendly reminder email might be all you need to get them on track. If it’s the second time, you might want to send a more formal letter and will want to follow state guidelines as to how and when to deliver it.
Should tenants continue to not pay, you may then need to continue with eviction proceedings with a pay or quit notice. It’s important to note that you may not be able to evict the tenant if you haven’t followed each required step as outlined in state landlord-tenant law.
The best way to stay ahead of late payments is to utilize a property management software like Landlord Studio. Landlord Studio offers the ability to set up automated rent reminder emails. These can be timed to go out before and after the rent due date to gently remind tenants of their upcoming rent payment obligations.
You can also CC yourself into all communications so that you have copies of all communications for your records. This will be useful should you need to escalate the situation to a formal late rent notice or pay and quit notice.
This feature, when paired with Landlord Studio’s rent collection, allows landlords to automate the entirety of the rent collection process and massively reduce the potential for late rent.
If a tenant continues to be late with the rent then it may be time to send a formal pay or quit notice or even begin eviction proceedings. A pay or quit notice essentially informs the tenant that they must complete the rent payment within a set period of time. Not doing so will mean they are formally in breach of the lease agreement which is grounds for an eviction.
One strategy to reduce the likelihood of late rent payments is to streamline the rent collection process.
By making it as easy as possible for tenants to pay the rent, they have less reason to be late with their payments. Using Landlord Studio, tenants can set up automated rent payments at the beginning of the lease, and unless a payment fails due to insufficient funds or they manually disable the auto-pay feature, their payments will be initiated on the same day every single month.
This has added benefits for the landlord, as all transactions are then automatically tracked and reconciled in our industry-leading accounting software significantly reducing the time it takes for you to track and record income and expenses every month.
When it comes to handling late rent, as with many things, prevention is the best remedy. However, sometimes tenants do pay late, and while you can mitigate this risk, you can never completely eliminate it.
Having a succinct and clear policy outlined in your lease in regard to late fees and grace periods is a key strategy for mitigating any potential financial loss caused by these late payments.
Finally, by employing rent collection software like Landlord Studio, landlords can streamline their rent collection, making it as easy as possible for tenants to pay their rent, and automate time-consuming tasks such as chasing up late rent payments and tracking income.