Your rent collection/Notice/eviction policy

mobile home university
1

I am wondering how many park owners out there have a strict policy or procedure that you follow for rent collection each month, more specifically if it is not collected prior to being late. Say rent is due on the 1st, and considered late with a late fee being due on the 6th. Say the rent and late fee is not received by the 6th. How long do you wait before you file for eviction? Do you give a notice prior to filing for an eviction hearing? How much notice do you give? Do you have a strict, follow it everytime type of policy on this? or do you file for an eviction only when you don’t want to let the tenant get any farther behind. if this is the case, how long do you wait? 2 monthes behind? more? less?

Here is why I ask.

I have owned a park for 8 years, the lower quality of 2 parks in a small town. Being the other park was nicer, tar road (mine is gravel) larger lots, paved parking areas, etc. I was always thinking that I had to deal with a bit more issues, or BS if you will from my tenants, otherwise, they may just move to the other, nicer park. I also kept my lot rent about $20 less per month for this same reason, figuring being I offered less amenities, my rents needed to be lower. Part of this is late rents. It is not uncommon for me to have several tenants not have their rent paid by the middle of the month, and even the end of the month. Its not uncommon at all to have tenants “double up” on rent after being a month behind. Or make small payments here and there to be applied to the back owed rent. This is getting to be a pain for me to track and quite honestly, I know my rent tracking gets off because of these partial payments made here and there. Typically they are paid in cash just slipped in my pocket and never recorded. Then a month or so later when I ask about the back rent, I get the: “well I paid you a $100 on the 18th”?
Maybe they did, maybe they didn’t, I can’t remember, so I give them the benefit of the doubt. Now they see this, and low and behold, next month its the same thing all over again and I really don’t know where I stand with this tenant and they know it.

I’m thinking I just need a strict policy that I follow to the letter of something like…
Rent is due on the first, If not received by the 3rd, I send out a notice mentioning that your rent is considered late after the 5th with a $25 late fee being added. Then I’ll wait until the 10th of the month, if no rent is received, I will then start the eviction process. Is this too quick? or harsh. How long do you wait until getting tough (filing eviction) with your tenants.

Also, being I have been so lenient as I have been for 8 years, is it too late for my tenants to change?

One more note, I have the nicer park across town under contract now, once I own that one, I would like to notify those tenants of my rent collection/eviction policy.

I’m curious to hear how others handle their late rents and eviction policies. How long do you wait to file for eviction if rent is not paid? Do you have a strict policy that you disclose and follow to a T? Has it worked?

Thanks

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@picassomcp , as per your post:
“Your rent collection/Notice/eviction policy”

My Husband and I own 2 MHPs.

We believe in Frank’s - @frankrolfe - policy:
“No Pay…No Stay”

Now initially when we first purchased the first MHP we allowed much more time between the Due Date and the Eviction (such as the following):
• Due: 1st Day Of Each Month
• Late: 10th Day Of Each Month – If Rent Envelope Is Postmarked The 10th Or Later, A $25 Late Fee Will Be Imposed Immediately With No Written Notice.
• Eviction Process Begins: 20th Day Of Each Month – All Rents & Fees Not Paid In Full – If Rent Envelope Is NOT RECEIVED by the 20th Day Of Each Month, the Eviction Process Will Begin Including A $75 Eviction Fee.

However, we found that the Tenants would wait until the last minute to pay.

Thus, we kept refining our terms to be more and more strict.

As of today the end result is:
• Due: 1st Day Of Each Month
• Late Fee - $25: 2nd - 5th Days Of Each Month – If Envelope Is Postmarked The 2nd - 5th, A $25 Late Fee Will Be Imposed Immediately With No Written Notice.
• Late Fee - $100: 6th Day Or Later Of Each Month – If Envelope Is Postmarked The 6th Or Later, A $100 Late Fee Will Be Imposed Immediately With No Written Notice.
• Eviction Process Begins: 6th Day Of Each Month – All Rents & Fees Not Paid In Full –The Eviction Process Will Begin The 6th Day With No Written Notice.

Part of the Late Fee that we receive is used to pay for the Eviction Process.

At the end of each month we send Monthly Bills to our Tenants.

Our Monthly Bills and our Month-To-Month Leases have the following statement (Please note it is in all caps as per SC Law):
“IF YOU DO NOT PAY YOUR RENT ON TIME THIS IS YOUR NOTICE.
IF YOU DO NOT PAY YOUR RENT WITHIN FIVE DAYS OF THE DUE DATE,
THE LANDLORD CAN START TO HAVE YOU EVICTED.
YOU WILL GET NO OTHER NOTICE AS LONG AS YOU LIVE IN THIS MOBILE HOME PARK.”

We then receive our payments through the mail.

For both of our MHPs the turn-around time for mail delivery is 2 days. Thus, we wait until 2 mail days after the 5th to start the Eviction Process (if the Money has not arrived).

We do not provide any other notice to the Tenants before we start the Eviction Process (because it is documented in both the Month-To-Month Leases and the Monthly Bills).

We physically drive to the one Magistrate Office to start the Eviction Process and we mail the other Magistrate Office with the needed Eviction Papers and Check.

Our Tenants have all kinds of excuses…some legit…some not.

However, our family has to pay all of our Bills on time, so I believe that it is important that our Tenants pay their Bills on time.

Our philosophy for our Tenants is:
“You do what you need to do…and we will do what we need to do”

What we need to do is just consistently follow our:

  • “Customer Payment Responsibility” Policy (stated above)

If our Tenants desire to continue living in the MHP, then they will:

  • Pay their Bills

@picassomcp , if you desire to change your policy, you will need to notify your Tenants of your new Policies and give them your state mandated time before you implement those new Policies.

You will then to be very consistent in implementing your new Policies.

We wish you the very best!

3

Hi Kristin,

Thanks so much for the detailed reply, it is very helpful to me and confirms that I have been giving my tenants way to much rope. I’ll be sure to make some changes. I do have a few more questions though.

I see you are now charging 2 late fees. one for $25 on the 2nd and one for $100 on the 6th. Has this ever been challenged by a tenant in court? is charging 2 late fees legal and enforceable? My lot rent is now $340 per month. If I imposed this same 2 late fee policy, and a tenant did not pay by the 6th, they would be looking at paying $465 for that month. That’s really a 36% late fee. I’m just wondering if this could be deemed as illegal? I’m hoping it is legal, because I’ll bet it is effective!

Also, I see that you send monthly statements. I think this is a great idea, but I have been trying to avoid doing that, as I don’t want to make owning a mobile home park anymore work for me than it has to be. However, if sending statements works to increase my income and or make management easier, I would be happy to implement this as well. Do you have a method of creating statements that does not take much time?

I do also like the language that you have in your lease that allows you to start an eviction with out having to send additional notices.

I really think you have a great way of handling your late rents, I bet you don’t have much for late pays.

Thanks again!

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@picassomcp , as per your questions:
“I see you are now charging 2 late fees. one for $25 and one for $100 on the 6th.
Has this ever been challenged by a tenant in court?
Is charging 2 late fees legal and enforceable?”

The Late Fees are based on:

  • The United States Postal Service - Postmark Date - On The Payment Envelope

Below are the Late Fees based on the Envelope Postmark Dated:

  • 1st Or Earlier: No Late Fee
  • 2nd - 5th: $25 Late Fee
  • 6th & After: $100 Late Fee

We do not collect both Late Fees.

It is either $25 or $100.

One half of the $100 Late Fee is used to pay for the Eviction Process.

In South Carolina our Eviction Process is $50 Total (two part process…$40 & $10).

Collecting the Eviction Fee from the Tenant is acceptable and has never been an issue.

In the past our Tenants have requested Court Hearings for the Eviction Process and there has never been an issue with Late Fee charges.

During the Court Hearings for the Evictions the Magistrate Judge asks the Tenants if they have paid…the answer is no…then the Judge orders that they pay. It is a fairly cut and dry proceeding.

On the Eviction Papers some Landlords request their Late Fee in addition with the Eviction Fees. We do not do this…we combine both the Late Fee & Eviction Fee in one amount so there are no surprises.

Also, some Landlords select to charge a Daily Late Fee…each day the Late Fee goes up (we just have a two tier system).

We wish you the very best!

5

We purchased a community almost three years ago and the receivables were a mess. Tenants paid whenever they wanted and the manager’s were not charging late fees or enforcing the fees listed in the lot agreements and the prior owner didn’t care. We immediately changed that. Rent is due on the 1st and late if not received by the 3rd. On the 4th there is a $40 late fee and then $5.00/day for each day after that until it’s paid in full. Each month, there are usually 2 - 5 tenants (out of 130) that are late. You must have a payment policy and enforce it consistently.

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I think it is crucial for you to start sending out monthly invoices. This will avoid any confusion on what was paid the previous month and what is the accumulated new balance each month. Once you have gotten your tenants on track, making regular full payments on time you may be able to do away with monthly invoices. Also sounds like you need a spreadsheet were you can keep track of all your tenants and what they have paid each month, so that this spreadsheet can automatically calculate for you each balance. We use a simple Excel sheet to keep track of our tenant accounts. Each new month we just copy and paste the spreadsheet. We use Microsoft Access to create invoices from our Microsoft Excel Spreadsheets. When you are inputting your payments to the spreadsheet as they are received, then the final process of printing invoices takes about an hour. Now getting them ready to mail out or distribute in person is my least favorite part.

Our Policy is as follows:

-Rent is due on the 1st
-A $5 late fee is acquired each day after the 5th(yours could start on the 2nd, we give 5 day grace period)
-Any account paid after the 15th has an automatic $50 late fee
-On the 15th they also receive a 7-day eviction notice.
-After the 7days we send a letter explaining the process of eviction and the burden it would be on them. This is simply a courtesy letter and gives them a final deadline before we file with the courthouse. It is usually the last day of the month.
-On the 1st day of the new month if we have not received payment we will turn towards legal eviction.

7

We are trying to get away from collecting rent from tenants. We are using PayLease. Tenants can pay at Any Walmart and it is recorded for us automatically in Rent Manager. Well worth the $$.

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Get professionally hardnosed quickly and a lot of your problems will disappear.

My rent is due on the 1st and late on the 5th unless the day is a holiday or Sunday. Residents get a bill which is prepared by a VA in the Philippines and sent out by the manager. Included in the envelope is a deposit slip with their lot number on it and they make their payment at a bank in town. If someone is late and has not given me a heads-up prior to the 5th, they get a 3-day notice. If there is a legit reason for being late, they pay a $50 late fee.

I probably have less than a dozen late payments in a year.

Train your residents as to your expectations and then make an example out of a few if necessary. Your life will get a lot easier.

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I don’t understand about your tenants paying at Walmart. How does that work? What does it cost?

I looked at the PayLease website and it looked like they all they do is email a rent invoice to the tenants, who then must print it out and mail it with the payment back to you. Am I missing something?

I like the corporate look of their invoice. It gives the message that there is no slack in the system.

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I use cashpay. The tenants have to fill out a moneygram form that is provided in the customer service area at the front of a Walmart. They pay with cash and pay a $4 fee. The payment automatically gets credited to your bank account a couple days later. Also with RM, it records the payment automatically.

ACH and online payments through paylease are better then cashpay in my opinion, but cashpay works alright for those without checking accounts.
I switched to paylease’s payment options about 6 months ago and am happy. Out of 150 units, about 20 are using cashpay, about 50 are paying using automatic ACH payments, and the rest are paying online.
Between RM and Paylease, my life is much easier. It took 6 months of legwork to make the transition from payments through the mail to RM and Paylease, but its so worth it in the long run! It saves me several hours every week indefinitely! I highly recommend Rent Manager and Paylease to anyone thinking about it.

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I also use Paylease via RM. Has been phenomenal. 100% of my tenants pay via check or money order. Manager has a scanner and scans directly into bank account as they come in. I pay Paylease 40 cents per check scanned.

Debated cash pay option as well but have had no issues thus far so have yet to introduce. Probably will at some point just to give an additional option.

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Randy, we do not use paylease invoices. Our tenants know their rent is due on the first of the month. We just give them an account number supplied by paylease. When they pay their rent at customer service at Walmart (using the acct number we give them) it seamlessly is recorded into our accounting book Rent Manager. Using Rent Manager along with Pay Lease has been one of our best decisions. We have three parks.

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