How strict are you on 3-day notices?

mobile home university
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We have 52 occupied in Ohio. We count rent late on on the 6th. We post 3-day notices on the 11th. This month for instance we had two resident still unpaid on the 11th and 3 after business days it would be the 17th. I speak to the tenants and one said “I’ll pay on the 18th with late fee”. The other a week after that (with late fee).

Question: Do you guys file on the 17th if you don’t have the check in hand? Do you wait until the date they said they would pay by? I remember Frank saying he didn’t care f everyone paid late every month because its free money.

How do you guys handle this? How strict are you?

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Rent is late after midnight on the day it is due. If in your case rent is not late till midnight on the 6th then your rent is due on the 6th. If I understand correctly your rent may be due on the 1st and you give till the 6th as a grace period on the late fees.
Each landlord appeares to choose how they apply late fees where their state landlord tenant regulations do not outline a time frame. If your regulations do outline timelines then you must follow them.

My regulations make it clear that rent is late at midnight the day it is due. If not paid then late fees apply immediatly. I follow them to the letter and apply late fees immediatly. I do not believe in giving any tenant a “grace period” on fees. As far as filing evictions is concerned for non payment I file on the 2nd if I intend to evict which I have done in the past. At this point in time I do not have tenants paying late except by mistake. If I did I would get them in line very quickly to pay on time or they would be gone.

I do not like having to dick around all month dealing with collecting my money. I have better things to do with my time and have trained all my tenants to pay on time or else. It is extreamly rare that I ever have to go to “or else”.

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File after grace period. Let them figure it out or you file. This eliminates the drama.

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We serve everyone that does not pay with a 3-day notice to pay or quit.

Our rule/State Law (CA) is if anyone gets three 3-day pay or quits within a 12-month period we evict them.

We are very clear with our residents that if they get three 3 days within a 12-month (rolling) period then we will evict them. We are evicting someone right now (05/23) for this very reason. The lady didn’t believe us. She is finding out the hard way that we are serious. It’s important to follow through on these. Word gets out that Susie Q in Space XX got evicted because she was late 3 times.

Be careful serving 3-day notices and not following through. You are setting a precedent for your park, its also a defense that your tenant could use against you. IE " Your honor I have been paying late for the past XX months and they always serve me this notice. They have accepted my money every time. Why is it different now?" Some Judges could consider your acceptance of late rent as a modification to the lease.

Another argument that could be used is Fair Housing: "Your Honor they never enforce these against Mr. XYZ, but now they are enforcing it against me, its only because I am (pick some protected class). "

If the 3-day period has passed, then you have them dead to rights on an eviction. If they try to pay that is the time you can renegotiate the lease.

“Mr. Tenant, you are constantly late and now you are under eviction. How are we supposed to accept you as a tenant moving forward? We think we are better off looking for a new resident. Your space needs (list the problems) and your rent is too low. If you clean your space and sign a new lease at new move-in rates then we will accept your payment.”

Word will also get out that you will bump the rent if they don’t pay within the 3-day pay or quit timeframe.

Do not let a good opportunity like a failure to pay go to waste. Most people who pay late are ultimately people you don’t want in the park. Get 'em out!!

Once you evict someone for being late and bump someone’s rent because they were late. You will see a big difference in how people pay.

Either way, you are training your residents to pay. If you allow it they will pay late, if you are strict they will pay on time.

3-60 Day Notice to Pay or Quit.pdf (569.3 KB)

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These are all great ideas. I especially like “three 3-days in 12 months gets you evicted”.

We had a very rough time for 2 years after taking over the park. We bought a place with drug dealers, hell raisers and sexual offenders. They are all just a memory but we still have the occasional late pays. but we are now tired of those after all the capital expenditures we have spent. We will adopt this measure.

Also bumping rent is a great way to change habits.

Thanks.

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What all landlords need to understand is that tenants pay based on how their landlord has trained them to pay. If new tenants pay late they need to be trained to pay on time. If tenants continue to pay late then their landlord is allowing it and has trained them that it is OK to do so.
Paying late always comes with a excuse and it is the landlords responsibility to insure that tenants understand that there is no justifiable excuse for paying late. In all my years I have heard every excuse and none to date has ever justified not paying on time.

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We’ve done it both ways in the past. With multifamily, it does help in management and accounting if everyone pays on time. However, if you have streamlined processes, then accepting late fees isn’t such a “hassle.” As a matter of fact, it can be a profit center.

For one of our parks, we use an online payment system. Everyone must pay this way (and they consent to such in the lease). The payment system allows for multiple ways to pay, including money orders - which is huge in this space. It even allows them to expedite payments (if they are less than 24-hours to due to date). The system charges THEM (not us) for expedited payments. Further, with late fees, the system automatically charges the late fees. There is no drama and no chance to argue. In the past, when we collected rent by mail, tenants used to try to argue their case or blame it on the post office. All that is now a non-factor. Further, we never meet anyone in person for rent payments. Our time is more valuable.

In speaking to the profit center for late fees (or any fees) - basically their failure to comply is your win. We give everyone at least 1 warning for any infraction. Then it hits their pockets. The onus is on them; our rules and requests are standard and easy to follow. This ranges from late fees, to rules violations such as unkept lots, not cutting their grass, too many cars etc. We’ve had one tenant these past 2 months pay an extra $100 ea month for failure to follow our basic rules. They kept storing interior furniture outdoors, despite notices from us. $200 for about 45 minutes of work, including mailing letters and driving to the property isn’t too bad from a management perspective.

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Thanks Dave. I am curious, what do you use for online payment system? I am looking for a platform to implement it.

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You are very strict, but i agree that you do not want to enable bad behavior. Do you have this also noted in your lease or contract, so they are aware when they become your tenants?

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I am in a similar boat, before we took over a park only few tenants paid in first few days. Its all over a place. I need to break that habit. For long term tenants we would wave long term fee’s, since they are used to it. But we are thinking to let them know, starting next month we will not wave it anymore. We need to draw line somewhere. Some of these tenants lived here for 8+ years

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Unfortunately, we are finding that some of the longer term tenants in MHPs are the most stubborn. We too have waived or decreased late fees to them. But we slowly got away from that

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@NancyMS we use Schedule My Rent

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Thank you @DaveR Can you tell me how long you’ve been using it & how you like it. We are looking for management platform and evaluating Tenant Cloud & Innago.
My checking out Schedule My Rent it looks really promising and feuture rich

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We looked long and carefully at Innago, Tenant Cloud, Schedule My Rent, Buildium, Yardi, RentManager, and ended up choosing RentecDirect.com. None of them were perfect, and reviews on all of those options were mixed.

We’re just transitioning all the tenants to it now. It’s too early to say whether we made the best choice. But our research said it was. Although, they’ve already done a couple questionable things. But, despite that, it seems to be pretty good. So, I’d suggest looking at RentecDirect. I’ll know more in 6 months!

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We set the expectation with the Tenants when they are applying to live in the park.

“Mr./Mrs. Prospective Tenant, we hand out the bill every month on or before the 1st of the month. The rent and utilities are due on the first and are considered late on the 5th at 5 PM, with some exceptions for Holidays, etc. (such as July 4th). Please pay on time, in the event you are not able to pay within the proper time period we serve 3-60 days’ notice to everyone on or about the 11th. The exact date depends on holidays and business days. If in any rolling 12-month period, you receive three 3-day pay or quit notices, we then have the option to only serve a 60-day notice to vacate the next time you are late. I am sure you intend to pay on time so this shouldn’t be an issue, right?”

Do we still have people pay late, yes. Is this perfect, no.
Some months are better than others. For example, we just had some people pay over the weekend.
I’d say we get about +90% of the rent on time and in full.

Having a strict policy and getting it right 80% of the time is better than having a lax policy 100% of the time.

If you want to stay you gotta pay!

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At our park we strictly enforce the late payment policy -
$50 per each occurrence and $10/day if not paid in full after the 6th.

You are running a mobile home park not charity and you have your financial obligations. Do not go soft because next thing you know everyone in the park will go “oh so and so was able to paid 20days late, why can’t I?”.

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zacklin33 do your state landlord tenant regulations state that you are not allowed to collect late fees until after the 6th or is that your own policy.
When do your regulations deem rent payment to be considered late.

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Stated required minimum 5 days grace period. Late on the 6th. State required another 5 days late notice serve to the resident so I can’t start eviction until the 12th (the day you serve doesn’t count), sucks. Hence why I said strictly enforce late payment policy and follow through your eviction process so they know you mean it. I have evicted about 5 people after acquisition and 6 months later my collection is at 95%.

Find a good local eviction attorney matters. Call court ask clerk which attorney handles the most eviction cases or check with title company for referral.

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Sucks indeed. 5 days grace means they can wait till the 5th to pay every month. Fortunatly for me I can file on the 2nd for non payment and it will cost the tenant an additional $226 every time. Needless to say my tenants rarley pay late on purpose. Last year I had 1 late payment due to a tenant being away at a funeral. I didn’t charge them anything for being late.

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So question, why aren’t you posting on the 6th?

Late fees are a great revenue stream but what they are intended for is a deterrent. And what it creates when they are too low, got to find a happy medium so you don’t get tagged for gouging, is that you get tenants like the one that was spoken of in the original post where they are just like, whatever I’ll catch you with the late fee later. Its a bear for paperwork to have to keep dealing with the extra steps.

The thing is if your state has laws on eviction for non-pay, use those, follow those, if you are in a state like Arkansas that’s a little more loose, you can tighten the reins as you like but be consistent.

But the biggest thing is if there is a failure to pay and its a repeat offender and you have documentation that they are not prioritizing you, you can get the house to flip back to ownership to you, in most cases, in foreclosure for failure to pay because if in your state, it goes for landlord friendly terms that’s how it goes. However, if you do it to one, you have to be consistent with all, can’t single one guy out because he’s a pain in the neck. But if he’s a pain in the neck and he happens to also be a nuisance case or has crime stuff going on, you have many layers to take to court to evict as well.

Please consider that you are giving yourself extra work when you aren’t strict with the rules and consistent. I would recommend sending out a copy of the lease and the rules to all park residents and make sure that they are aware of the date that money is due and put a cover letter on it letting them know that enforcement of the rules is improving starting in whatever time line you want to give of like 30-90 days so they can get themselves the opportunity to not add more work to your pile by fixing their bad habits, cleaning up their homes, removing junk and extra cars, all the things.

End goal is you are running maintenance and improvement at the property, not putting out fires and chasing jerks around that can’t read a due date calendar for bills.

Other thing is that weekend days count unless the state / county law says otherwise for the day counts.

I’m off my soap box. :slight_smile: