No Pay No Stay Letters first month of ownership


#1

We bought a park at the end of December.

The Tenants got a new owner letter January 4th. Rent is Due the 1st and we have 18 no pays as of today.

The previous owners did have a loose $25 late fee but never enforced it and allowed tenants to pay their lot rent through out the month. Are we out of line to send out a 7 day notice to pay rent or vacate letters with $25 late fee and a certified letter fee? The new owner letter stated that we would be much more strict moving forward, but of course the does not give the tenants much notice. We are staying with the prior owners policy as far as when rent is due and late fee. What would you recommend? Should we send these formal letters out today 1/8/2018 or should we start enforcing Quit or Pay letters in February? Thanks!!


#2

You should send the letters as soon as the law allows. If rent is due on the 1st and the tenants have til the 5th to pay (that’s the law in IN), you should send the notice to pay letters first thing on the 6th. You should also increase the late fee the maximum amount allowed. If the tenants don’t pay within the 7 day notice you should immediately send the 24 hour notice to pay… and if they don’t you should file for eviction immediately.


#3

It would be good to see if your manager on site can knock on doors to let them know this new owner is not “messing around” on the no pay no stay deal. While you need to be rigid, a lot of communication via mail and in-person is absolutely critical to maximizing your retention the first 3 months. The extra comms also helps tell the story when the time to evict comes for the unlucky few (who decide they don’t care about their lease) - and you make a nice example of them and everyone else gets in line.

Congrats on your purchase!


#4

When rent is due on the 1st and not paid you should be sending out the no pay no stay notice on the 2nd.
Rent is late when it is not paid by midnight on the day due. The 5/7 day grace period only applies to when the late fee take effect. Do not wait, issue the notice on the no pay no stay notice on the 2nd to set the process in motion asap. If they end up not paying you do not want to waste time and you also want to send a strong message that you do not tolerate late payment.
You can not be weak or unclear about your intentions. If you are going to be vague regarding enforcement nothing will change. Your tenants have been trained very poorly in the past and will need a strict enforcement policy to get them in line.
Be prepared by month 2 to evict to set a president. One eviction is likely all it will take to get them all in line. Hopefully your tenants are all on M2M and you can slimply non renew a lease or two.


#5

Just bought a park with similar results. We posted anew welcome letter. 30% of tenants paid us. One vacated overnight. Our attorney will file an eviction on all non paid tenants. Let’s see if they get the memo.


#6

Careful on the knock, “no messing around” thing - diplomacy and tact is not in all managers vocabulary and it can escalate to an unhealthy level quickly if someone walks the park acting like an bill collector with an attitude. It can come across from the residents as aggressive and hostile when it’s not meant that way. I’m not saying it would go that way, but it tends to rather than not. But it can get you sued if your residents feel threatened. Making sure you follow all statute protocols for service is imperative, example would be like here in WA - you knock, hand to the owner, if owner is not home you ask them to close the door, you post the door with the notice, you take a photo of the notice being posted with TimeStamp App (very useful and free date / time app) and you certificate of mail it to them so they have a second copy when the throw out the posted copy. Then you have proof of mailing and a picture and you have a copy in file as well, you’re cool. They can come to the office, you can talk with them calmly and professionally and you won’t open yourself up to get sued.
The residents will talk without you strong arming them, they are more close knit than you will ever be a part of, but they will respect you more if you treat them with respect as well.

As far as when you send the notices, it must be proper protocol per your state laws, as close to the kill date of being late as possible to help you from not working every weekend. Track and maintain a list also of who is getting these notices and when you can evict per your state laws, my state it’s on the 3rd in 12 calendar months. It’s also helpful to calendar when you sent them, to whom you sent them, so when they come due to expire, you’ll have an at your fingertips list of who is going to legal after this process expires. Send those that didn’t pay by the last calendar day of the notice, on the following morning to your eviction attorney.

One thing I do that others don’t is I offer suggestions for moving bills for those that come to me complaining about their bill. I redirect them to understand that housing should be their paramount bill that they focus on every month, I provide city fliers for resources for financial assistance for food / utilities / etc and I also remind them that things like car payments and credit card due dates can be moved if you ask the creditor and you are on time. I work with my residents to find solutions without waivering on them paying me.

Firm but Fair should be the mantra of our managers. Also “Whatever you do, be nice” like in Roadhouse.