Renting real estate is easy, right? Well, renting the “right way” is easier than doing it the wrong way, however, there are times where the business of rental real estate goess “off track” without any fault of the landlord. In difficult economic times, more and more landlords are finding that their tenants are unable to make the monthly rent. What’s a smart, conscientious, and savvy landlord to do about it? Here are a few tips for what to do and what not to do when a tenant falls behind.
1. Don’t Wait – In my law practice, I speak all too often to landlords who pick up the phone to call me after a tenant is three or four or more months in arrears on rent. At that point, landlords don’t have many options. Worse yet, four months without rent, combined with the time it will likely take to remove a tenant through the legal procedure, may be too long for the landlord to survive. In order to have the most options and the best chance of success, landlords need to act quickly to address a tenant’s inability to pay the rent.
2. Keep Communication Open – When a lessee stops paying rent, sometimes it seems like the tenant has gone “on the lam”. All of a sudden, it becomes extremely difficult for the landlord to reach the tenant by phone, email, or in person. Worse yet, many landlords are afraid to even attempt contact with the tenant. Many landlords like to use an intermediary or a special process server as a buffer with the tenant. While I am always happy to provide that service, I have found that direct landlord contact is often most effective. Having an open line of communication allows constructive discussion of the causes and possible solutions to get a tenant back on track if possible or to cut ties with the tenant, perhaps in a less time consuming and expensive manner than an eviction lawsuit. Communication with the tenant is good, but it can be a double-edged sword. Landlords must also be careful of the tenant who likes to communicate too much. Many tenants, especially professional tenants, know that maintaining just enough contact with a landlord can stall or delay the landlord from taking actions that are perhaps called for and likely ultimately inevitable such as starting eviction procedures. Communication is a tool and landlords should employ it to get the information they need to make sound, smart, and timely decisions without getting wrapped into a litany of sob-stories, “almost paid” situations, and string-alongs.
3. Serve an Eviction Notice – I urge all of my landlord clients, as a best practice, to serve an appropriate eviction notice (usually a five day notice) at the first moment the tenant is actually late. The affirmative step of serving the notice lets the tenant know that the landlord means business and is not afraid to take the necessary steps to deal with late payment. The best part of serving a notice is that the landlord can personally serve the tenant and then use that time service is given as an opportunity to discuss “next steps” face to face with the tenant. A landlord can ask the tenant about the tenant’s intentions and possibly make a deal with the tenant to vacate in some short time frame. Service of an eviction notice does not bind the landlord into the process of eviction but, it saves precious time in the process so that as soon as the landlord decides to take action, all the prerequisite steps to doing so have been completed.
4. Don’t do anything illegal – One of the most important skills to being a successful landlord is to keep an even head and to maintain composure, even in the face of dishonesty, non-payment, or disrespect on the part of a tenant. A landlord who loses his or her cool, especially a landlord in a municipality like Chicago or Evanston, will promptly find himself or herself in hot water. Landlords do not have the right to change locks, take hinges off of doors, cut off utility service, or to threaten a tenant to leave. At a minimum, those actions will cause a landlord to lose leverage with the tenant and, at worst, can leave a landlord with civil or criminal liability. Landlords need to know, understand, and follow the law when dealing with a delinquent tenant.
5 – Be realistic. Like the song says, “you need to know when to hold ’em and know when to fold ’em”. Landlords need to take a realistic view of the eviction process, the time and cost involved, and the probability of recovery from a tenant and make a rational judgment about how to proceed. This may mean in some cases striking a deal with a tenant to either forgive rent or reduce monthly rent in order to keep a good tenant or to forgive past due rent in order to induce a delinquent tenant to move. Many landlords are at first shocked when I suggest that they work out a deal with a tenant, especially one that forgives back rent or even pays a tenant to vacate. However, some situations, when viewed objectively will require a landlord to realize that a small payment to a bad tenant coupled with an empty unit beats the heck out of a tenant who spends three months disturbing other tenants in the building, not paying rent, and remaining generally uncollectible even if the landlord is able to obtain a judgment. Although it does not help my bottom line, I will never fail to point out to a landlord that they might be able to make a deal that will get the tenant out faster and cheaper than I, or any other eviction attorney, can.
6. Document everything – No matter what direction a landlording adventure takes, a smart landlord will document everything. Offers of settlement, phonecalls with tenants, dates promises were made and not kept, and any deals struck should all be reduced to paper to create an appropriate record down the line if the facts are ever called into question. A landlord that maintains accurate and regular business records is arming himself or herself to be prepared down the line.
7. Seek professional help – None of the ideas I have shared here are earth shattering or ground-breaking. However, they are grounded in common sense and experience. Sometimes, a tenant will not give a landlord any choice other than to evict, even after the landlord has done “everything right”. In those cases, a landlord should turn to an experience professional for assistance. Evictions are technical in nature and time is the ally of the tenant, not the landlord. An Illinois eviction attorney is a strong ally for the landlord who has exhausted all other options and is forced to resort to legal remedies in a forcible entry and detainer lawsuit.
If you are an Illinois landlord and are in need of advice, our firm might be able to help. Feel free to give us a call at 773-399-1122 and we can see if we are a match for an engagement. We do charge a fee for in-office consultations, however, we are always happy to spend five minutes on the phone at no charge (we do not provide legal advice during such a discussion) to get to know you and your situation to see if we might be a match to work together and to explain our services and fees.