Tenant Lost His Job — Now What?
November 16, 2017
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to owning or managing rental properties, there is an endless number of things to tend to. From collecting rent payments to performing regular maintenance around the properties, the to-do list can seem endless. With all of this on your plate, it can be understandably unsettling when a tenant loses their job. Not only does this increase the likelihood that they will have trouble paying rent on time, but they may not be able to pay at all.
Here are a few things to keep in mind if this situation arises:
Get Ahead of the Issue
As with any other type of business, strong communication is an essential part of real estate ownership or management. It is not uncommon for the landlord or property manager to be one of the last to know that a tenant has lost their job. Maintaining regular and frequent communication with each tenant is the best way to stay abreast of issues that may impact your business relationship with the tenant. In cases where you do not regularly see a tenant, there are a few indicators you can look for that something has gone awry. For instance, if you notice that your tenant begins paying rent late or is not maintaining the property as well as they usually do, these are strong signs that something is wrong. Keep in mind that your tenant is likely just as worried about paying you on time as you are about receiving timely payments.
Work Out a Payment Arrangement
In cases where the individual has otherwise been a great tenant, take some time to consider how lenient you are willing to be in this situation. As soon as you find out that the tenant is no longer employed is the best time to establish a payment plan and lay out your expectations. If you are not able to come to an agreement on how and when you will be paid, it may be time to start the legal process. This topic will be discussed in greater detail below.
Either way, your decision about whether or not to accept a payment plan from your tenant will depend largely on your circumstances. In cases where you have delegated property management responsibilities to a third-party, you will also need to be mindful of any arrangements you have with them.
Explore Your Legal Options
As you navigate your way through this difficult situation, keep in mind that there are legal remedies available. While losing a job is an unfortunate experience for anyone, it is important that you take action quickly. Start by gently explaining to the tenant that they will have to vacate the property if they are not able to pay rent. While this will certainly be an uncomfortable conversation for the tenant, it is often equally upsetting for the landlord.
Conclusion
As a property owner, dealing with a tenant who is unable to pay is something your property management team can handle for you. Not only does this company manage your property, but they also help you protect your monthly rental income. They can work with the tenant on your behalf and advise them of how long they have before the legal process begins. A property management team can also help the tenant make final arrangements before moving out.