If you do NOT practice Zero Tolerance with your tenants (meaning you don't enforce your own lease and allow tenants to pay rent whenever they feel like it),...how long will you allow your tenants to go without paying rent before you take some type of action?

Most local M&P -LL's here will allow a tenant to get a full 30 days behind before they even post a P/Q notice. It is common for many of them to even wait 60-90 days before filing for eviction.

Roy, I'm anwering this post because I doubt many folks are willing to confess their land lording "sins" in public. So here's what I've gathered talking to other land lords about these issues.

The reason they don't evict quickly is a combination of irrational fear, lack of knowledge, a misdirected sense of guilt, and a desire to avoid conflict.

People fear all sorts of stuff for no logical reason. No doubt you have seen posts on here of folks who are "afraid my tenant will tear up the place"....when in fact the tenant is ALREADY tearing up the place!

People hate conflict. Period. Nothing else to say on that.

Lots of non-professional land lords haven't got a clue about the LL/Tenant laws of their state nor do they even begin to think about what happens when people lie, cheat, or steal from them. Their lack of knowledge paralyzes them.

Most of us are basically decent human beings, and when someone moves in and starts tearing things up and not paying, the shock probably takes 1-3 months to fully set in. "No, Larry CAN'T be destroying my home and spending my rent on booze and drugs....he's simply having a hard time. I can wait. I want to do the 'right thing' and not be a 'jerk.'"

Aren't you glad this bunch of Class A 'jerks' is here to help support your ZT trigger! ;-)

ZT should apply to the entire lease agreement.

Problems start prior to the collection of rent.

Sid,

This forum is the perfect place to confess one's sins,..I would much prefer to do it here than in person,..LOL.

I have learned that many local LL's who have good paying day jobs and don't really 'need the rent money to pay bills with', tend to be lax in collecting rent on the due date. There is no real sin in this, it is just their way of doing things.

No doubt...folks who don't 'need' the money are lazier than those who rely on it. I suppose it's more work to COLLECT rent money vs. RECEIVE a paycheck from a W2 employer.

Add "laziness" to the list of reasons. ;-)

I have a different view of money/assets than those folks. I don't NEED every $ owed to me, but then again I don't view any of this as mine anyway. It goes back to the concept of Christian stewardship where I am acting as a care-taker/asset manager. So while maybe I don't need that $500 rent check to put bread on my table, perhaps the local food pantry of free-winter-coats-for-kids organization could put it to good use.

My family gives financial supports three charities beyond our local church: the Alzheimer's Association, the Leukemia and Lymphoma Society, and Convoy of Hope a locally based, but nationally active disaster relief organization.

Bottom line: I see it as my duty to make these assets perform, and whether I personally reap the benefits or I steer some of that funding to other worthy causes, I will collect the rent. Folks who can't afford to pay need to move to somewhere they can afford. Opting simply not to collect rent to me, again, is laziness. If a person don't need the money themselves and it's too much bother to collect rent, then set up auto-draft for cryin' in the soup and write a check out to help someone who DOES need it. Or sell the house if there's no desire to manage it properly.

I had one place that I let the tenants get behind. One side it was only weeks, but then he would pay and sometimes he would get ahead. He did not have steady work, so I knew the income was not there. The other side got months behind, but again would pay and then get a few months ahead. I did post on him a few times. But I was also getting way more rent than I could if he left.

But here is the reasons... The house was old, and on its last legs. There was no way I was going to put that much money into it to fix it enough to rent again. It was on acres of land in the middle of suburbia, so I knew it was going to be taken down for a development when sold. I just wanted to get as much as I could in rent until that happened. In the end, the second tenant stayed until they were bulldozing around him, 4 months behind in rent, not that I cared then. I did take him to court and got half the rent owed. But I still made out in the end.

My other rentals have good tenants, they very rarely (once every 2 - 3 years) let me know it might be a week late, and since they let me know, and they are really good, I can work with them. Otherwise, zero tolerance.

I guess you have to find what works for you with the clientele you have. Of course we also have to be aware there are plenty of people that will lie, cheat and take advantage of you. I think Sid hit it though. A lot of people want to avoid conflict, especially as we get older.

Some people tend to stay under market rent and the late charge is a way to increase income on places that have been rented by the same tenant for several years and have proven they will pay. That being said, it is not that you will eventually get "stuck", it is when? I hate when good tenants start having problems. We live in a rural area with very few good job sources. Most people either drive 45 miles to Lynchburg or Charlottesville for work or work for the county here, school system, or prisons (we do have 2). The nearest hospital is small and 20+ miles away, same for nearest colleges. There is a nursing home in the county, but most of those jobs are low paying.

I am beginning to wonder how people around here make it. A job at McDonald's or a "Dollar store", even with both parents working, when they have 3 or 4 kids, just isn't going to cut it at today's rents.

Pat, they have disabilities. The area is filled with people who talk about wanting work, needing work, and not finding work. In reality they have a well managed disability lifestyle.

I have one shack that is behind on rent. It drives me up a wall. I like the people, I've given them plenty of breaks. They have found me some teni in return. Overall I've done more for them than they have for me.

Meanwhile, back in Gotham, I had one who paid late a few times then missed one payment. Out he went. I pushed him out in less than sixty days. Not by the book, but rather by force.

So why do I discriminate? Why does one shack get away with it? I believe it is both a matter of how much attention I can give to the problem and whether it is contained. I could not have the one guy who was late stay on...he was identified as a sinking ship. The other shack is a lifer. I need to find that one missing element. I have someone who is going to knock on the door the first of the month. It may be that simple.

One more thought. Lets say these rentals were yours, and I was working for you. I would go by the book, the end.

The reason I don't do the same for myself is because I've done very well trying different ideas.

Professional? It is assumed that a person not doing what the crowd does is not professional.

Don't know if this is zero tolerance but it works for me. Text rent on the 2 day, post a pay or vacate on the 6th then file for eviction on the 10th.

Late fees begin on the 3rd.

Confesion, I do have one 18yr. tenant that is about 3 weeks late.

Dave,

How much longer will you wait on the 18 year tenant? That is the real issue here.

I have a couple of 2+ year residents who I have accepted rent from up to two weeks late. They have communicated with me up front and have always followed through. Rents are high in the area and many are struggling month to month, so I am not rigid in this aspect.

My friends have one house they rent out, they let the people get a few months behind because they hopped they would catch up because eviction in CT is "hard".

Eviction in CT is not hard, people make it hard, it takes 3 months but its very easy.

They finally got serious and listened to me and spent $1,500 on an eviction attorney.

I think there is a strange understanding of the concept of ‘zero’ on this forum. True ‘zero tolerance’ in my view would be a Pay or Quit the first day allowed by law ALONG WITH NOTICE TO VACATE as soon as one’s state law allows.

Zero tolerance, in MY definition, would not allow for a person to redeem themselves, hence notice to vacate.

I don’t get hung up about collecting late fees, each month if the tenant is so inclined. BUT, tenant MUST text ahead of time, with a date that rent and late fees will be paid, and I must approve the date. If tenant doesn’t text, Pay or Quit goes up. But, because I am a small -time landlord, and not financially dependent upon rental income, I do reserve right to extend latitude. By doing such, I have avoided vacancies at difficult times, AND, with just one exception, have fully recovered all rents and late fees. Even that one, I have gotten some money from them after they vacated.

Roy,

You always ask such great thoughtful questions!

My first thought is to admit we were in the category you describe. We would not worry about collecting until the 10th or 15th of the month. Our theory was for you will allow them 30 days. That easily slides into 60 days.

This was our pre-great recession policy. It worked OK because money was handled differently by people before the great recession. Or so I thought.

When Input a pencil to it we had LOST $537,000.00 by “working with” people.

So to get back to your question as to why landlords wait my first thought is that they don’t keep track of the numbers so to get back to your question as to why landlords wait my first thought is that they don’t keep track of the numbers. Just like Mr. wonderful on shark Tank your Gotta know your numbers!

Next is the other thing is mentioned already asked the emotional aspect of not wanting to cause conflict or believing yes they’ll pay, after all they’re nice people.

I see something in several of the comments above that concerns me. Landlords waiting a few days here than a few days there and not filing or pursuing on the day it’s due. Residents are lulled into believing paying the rent paid on time is not important. I strongly suggest a simple program of due on the first, send notice appropriate to your state law, and file.

And Just because they are “upfront and tell me when they plan to pay” is very risky, and again teaches them the due date is not really the due date.

Enough for now!

Haha! Sorry! That post was dictated so the words are not exactly what I meant. I forgot to proofread before hitting submit.

I’ll add another – most landlords have no business experience combined with no business relationship experience with people. They are not used to holding anyone accountable for anything. Confronting someone about payments or even sending late letters or late text is a foreign language to them.

I’ll encourage anyone having difficulty with us to get to Jeffrey‘s Boot Camp and national convention to get around landlord who ARE business minded and learn the attitudes and vocabulary to help them move their business forward. My friend who is a fireman says they train train train train train train so that when the need arises they are well-trained and comfortable handling the emergency. Landlords should consider the same concept.

The more I learn the more I make.My income always jumps up after national convention with the ideas I learn from others.

On day four I serve a three day pay or quit. The only exception is if they are good tenants with a stellar track record then I will accommodate a late payment. I had one tenant that had bank problems and another whose father was on hospice and would pass away at any time.

Early on I was Mr Nice Guy with my tenants. I would let them slide if they could not pay me on time. Who's fault was it letting them slide, me, myself and I. The school of hard knocks was a wake-up call to me. THEN I became my tenants worst nightmare. If they did not pay immediately eviction notice.

There were a few landlords that I knew they would sign the lease and not enforce the lease. But when a tenant was late the landlord would threaten eviction. And once the landlord got the rent money it would be quiet until next month. Then the conflict ensued on a monthly basis. This landlord did not enforce the lease, nor the late fees. Of course the tenant trained the landlord well. The other factor is the landlord keeps the rent below market just to keep a tenant longer and not have a vacant unit. What this landlord did not realize is how much rent was lost over years of below market rents.

Landlord does not enforce the lease. Landlord does not increase the rent. One of the above messages mentioned that IF the landlord depended more on the money and treated it as a business their mindset and attitude about zero tolerance would change. Plus landlord treats the tenant as friend not as a business.

The suggestion of not treating tenants like friends is like finger nails down a chalkboard for me. I thought we were supposed to be religious people and treat others well, some of us anyway.

(I wrote that on the same day I hammered on a teni today).

I do understand the point being made. Go into any good hotel and you will be treated very well.

Irish, sounded like a great property manager. I believe he treated people well but enforced the lease without exception.

From the high's of 1990 to the depth's of the real estate depression of 1996, I purchased many multi-family buildings in "C" class neighborhoods. These were mostly 1 and 2 bedroom units.

Many tenants were on either fixed income or they has spotty work/jobs. With almost the addition of 150 units, I had to make a plan that would maximize my cash flow. I just couldn't say, "pay the rent on time or leave"! Then I'd have over a 50% vacancy rate.

So I "worked" with my tenants letting them make two or three payments a month. Half by the 5th and the balance by the 20th.

This kept me with 80% of the tenants paying me their full rent. The worst offenders in each property I would evict.

Another: I think the word "nice" ruins a lot of LLs. They are NICE people who want to be perceived as NICE. They want people to like them because they are NICE. "Demanding" rent is not NICE.

OH and you meet great people and become friends at National Convention, like Roy!

BRAD

Brad20k you hit the nail on the head with your last 2 comments. In the first few years I'll admit I committed some of the sins he mentioned. I didn't understand at first that I needed to maintain a business relationship and not to get sucked into tenant drama. I remember you once warning me I was getting sucked into tenant drama and you were right. When you first posted about Zero Tolerance it made a big impression on me and changed my business when I applied it to my rentals. Thank you.

Roy,

I don't live in a world of zero tolerance. My world is filled with greys and shadows. "Zero" to me is VERY restrictive so perhaps it's not what others actually mean.

I work with tenants if I need to. That does not mean I allow them to get into me for many months (although I have been in that situation many years ago but no where close to brad's $1/2M).

I have tenants who have been in a single family house almost 16 years. They bought this house for me. It has appreciated considerably. These tenants have put that cash to use for me in purchasing other properties. Work with them? Absolutely ...whenever they need.

This has been a great discussion.

My Zero Tolerance is I give tenants a maximum of a 7 day window before I file, but that's 100% at my option. Missouri has no law that says I must wait that long, and my state doesn't require a Pay or Quit notice. I can file the first day rent is late if I want, and on a couple of occasions I have file on the 3rd. So, I don't see my ZT policy as having any worse of a practical effect than someone who lives in a state that has a 7 Day P or Q notice requirement.

Actually, waiting 7 days works in my favor which is why I do it most times. One of my goals is to maximize the judgment, and it takes about 3 weeks from the day I file until we show up in court for the initial hearing. If I file on the 2nd thru the 6th, I almost always end up in court on the 29th - 31st. But if I file on the 8th... I am in court on the 1st - 3rd, which means we amend the judgment request and get TWO months of rent vs. ONE. By waiting one week, I not only give my tenants time to get a plan organized, I also maximize my potential collection.

The two times I filed "early" (i.e. day 3 of no rent) the tenants had other issues where I needed them out ASAP, and the extra month of rent was worth less to me than simply getting rid of them. Again, I have the flexibility to do that.

One final thought (for now) on ZT...

The problem I often see here is people have NO policy and just make it up each time. Or if they do have a policy, they ask about making exceptions to their policy.

When I say, "Do ZT", the implication is:

* You have a policy

* You stick to it

If you do those two things, then for all intents and purposes, you are a ZT land lord in my book... which will be published in Spring 2019. "Sid's No-Nonsense Land Lording: All Calls Go to Voicemail/Tenant Auto-screening" limited edition.

;-)

reading Sid's definition of his zero tolerance right above, that is absolutely not what I always assumed it referred to.

ZT: Either they paid or they didn't. It's totally up to them. The ball is in their court. Re-inventing the wheel each time will stress you out and turn you into a stooped over grumpy LL.

Mickie hit on something - when they say "Can you work with me" or "next week" that is a red flag that something is wrong and a good chance it will get worse. Solve it NOW while it's small.

PayDayPlan eliminates soooooo many of these issues.

BRAD

Something to keep in mind when a forum creates nifty phrases like ‘zero tolerance’ is many, many newbies, lurkers, read these forums and become confused. Perhaps ‘Disciplined Rental Collection Plan’ better describes what is desired.

Or, as Sid eloquently said, ‘Have a plan, and stick to it.’

Tom, sorry if I mislead you, I wasn’t meaning to imply I would do things differently with a larger number of rentals. I was trying to be snarky, but, evidently it didn’t translate to text. Lots of dismissals of ‘Mom and Pop’ landlords on some of these forums. Landlording , for some of us, is less about making gobs of money, and more about Mazlov’s hierarchy of needs.

For me, giving some latitude with my Class C rentals makes me more money through late fees and lower turn over. And, yes, my houses are at market pricing. Just did a survey today.

But, then again, I have extensive skills in getting compliance from reluctant participants. Wouldn’t work for everybody, and my methods aren’t scalable for me because of my personality. I don’t do well in crowds. Too peopley.

That’s the thing, we have to know our own personalities. Some can be mega-landlords, with with thousands of units, and staff. I prefer being a small -time landlord, who knows I am making a difference, and making Cash Flow. (As my accounting professor said in college, ‘ You can keep the profit. I’ll keep the Cash Flow.’ )