Jenny S. asks: When a tenant doesn’t pay rent, is my rental agent responsible for collections? Who files for eviction and follows through in court?
RAG answers: This is a good question, and something to be sure to clarify within your rental management contract. Essentially, it’s up to you and the rental agent you choose to spell out who’s responsible for what when it comes to dealing with non-paying tenants.
However, assuming that you’ve chosen full-service rental management services, your rental agent will typically handle the legal proceedings. First, he or she will serve the late-paying tenant a “Three Day Notice to Pay Rent or Quit.” If the tenant does not pay rent within the three days, your rental agent will file for eviction and handle the legal proceedings until the non-paying tenant is out of your rental unit.
Many rental owners choose to use rental management companies specifically because they don’t ever want to have to spend the time and energy it takes to successfully get through an evictions process. Many rental owners also feel that rental agents have an advantage when it comes to collecting rent in the first place. If you’re trying to collect rent from a tenant who knows you own the rental, they know you can bend or break the rules for them at will, whereas a rental agent has a legal obligation to make sure they pay rent on time.
A good rental agent or ‘property manager’ will help lower the chances of a non-paying tenant. However, sometimes a tenant that was carefully screened will still experience an unexpected job loss, divorce or other significant setback that may lead to a loss of income. In this case, if a rental agent has a good relationship with the tenant, an open and frank conversation can take place that will likely lead to a more favorable outcome for both sides than an eviction proceedings.
For instance, an experienced rental agent may negotiate an early lease termination with the tenant and, with the property owner’s agreement, offer not to pursue collections or an eviction if they can leave the property quickly and in a clean and damage-free condition.
It is important that the rental agent follow eviction protocol even when negotiating a better resolution. The eviction process takes time. Not sending out the proper 3 or 5 day notices because the parties are in negotiations can ultimately hurt the property owner. It is best for the rental agent to march along with an eviction at the same time they try to ‘broker’ a less costly alternative.