Writing a late rent notice is an unavoidable part of being a landlord. The notice of a late rent payment has three purposes. First, it reminds the tenant to pay the overdue rent promptly, informs about late fees, and then warns the tenant of the consequences of nonpayment. However, a late rent letter has a more important purpose — it’s a formal document necessary if you choose to start an eviction process.
Of course, being a landlord is easier when all tenants pay their rent on time. However, even the most diligent tenant can forget to pay their rent money by the first of the month. Of course, some tenants have serious financial difficulties and cannot pay rent. But in all cases, writing a late notice for rent is a vital part of the rent collection process.
This article is a complete guide to dealing with overdue rent and how to encourage tenants to make rent payments on time. You will also find a helpful late rent notice template and step-by-step instructions on writing a late rent notice.
What is a Late Rent Notice?
A late rent notice is a legal document sent to the tenant informing them that their rental payment is late. The notice for nonpayment should include late charges and warn of possible legal action if the tenant does not pay the overdue amount and late fee within a certain time period.
The past-due rent notice can only include the terms stated in the rental agreement. For example, the lease terms should consist of the following:
- The monthly rental amount
- Due date
- Grace period (optional)
- Late rent fees you will charge (optional)
In addition, state laws regulate the amount of notice you must give the tenant to pay the total amount.
Also called a “Pay or Quit Notice,” a late rent notice allows tenants to remedy the situation and continue living in the unit. Therefore, the letter also provides steps to pay the rent, the total amount due, and the time frame for payment.
Other names for notice of late rent include the following:
- Demand Notice for Nonpayment of Rent
- Notice to Cure
- Demand for Past Due Rent
- Failure to Pay Rent Notice
Why it’s Important to Send a Late Rent Notice to a Tenant
A late rent notice is an important part of the rent collection process to collect unpaid rent money. The formal notice to tenants proves they are aware of the consequences of nonpayment of rent. In addition, it gives them a chance to resolve the situation without fear of eviction.
In most cases, you can expect to receive the rent payment immediately.
Here are three reasons why it’s important to send a late rent letter when a tenant misses a payment:
- The formal letter reminds the tenant that the overdue rent payment must be paid promptly.
- You can charge late fees, which may encourage tenants to make monthly rent payments on time in the future.
- The late rent notice is an official document necessary in eviction proceedings.
Should you always send a notice for late rent? A quick phone call may be enough to resolve the issue. For example, maybe they became ill, experienced temporary financial hardship, or were unaware of payment issues with their bank. Therefore, you can often resolve the payment situation without sending notice.
However, there are a few things to consider about the importance of always sending legal notices of unpaid rent. These are the following:
- Tenants could get into the habit of missing rent due dates because there are no consequences.
- Charging late fees motivates tenants to make timely payments.
- Failing to notify tenants of nonpayment of rent could make it difficult to evict a delinquent tenant.
- You have to run a business, and late rent payments impact your cash flow and cause you to miss paying bills.
When You Should Send a Late Rent Notice
You can only send a notice for late rent payments after a certain period has passed. Local state landlord-tenant laws may determine how quickly you can send a legal notice of late rent. In addition, some states have a grace period for nonpayment of rent. Typically, it takes from five to 15 days.
You can send the notice the day after the due date in states where no grace period is stipulated for late rental payments. If rent is due on the first of the month, you can send a demand for payment on the second day. However, you must give the tenant a certain period of time to pay rent. Depending on the state, this ranges from three to 14 days.
Some landlords specify a grace period in the rental agreement terms. Therefore, you must wait until it expires — usually between two and five days. Then, you can write and send the late rent letter the day after the grace period.
In most cases, contacting the tenant personally before demanding payment is best. If the tenant promises to pay, wait a few days for the money to arrive in your bank account. However, if you are considering an eviction for nonpayment, send a proper notice immediately after the grace period expires.
Rent Grace Periods by State
The rent grace period starts the day after rent is legally due, according to the lease agreement or state laws. For example, if your state has a five-day grace period, and the tenant pays on the seventh, they incur late rent charges for two days.
With no state-mandated grace period, you can serve a late rent notice and start charging late fees from the day after the rent due date. However, state rental laws specify you must allow a certain number of days to pass before serving an eviction notice.
It’s good to note that states without a specified grace period typically allow grace periods to be addressed in the rental lease.
Here is a list of rent grace periods for each state.
How to Serve a Late Rent Notice to a Tenant
When serving a late rent notice to a tenant, it is crucial to follow the proper steps. The notice is an official document that could be necessary for an eviction lawsuit. Therefore, double-check the lease agreement terms for late payments and charges. Next, check with state laws for the approved legal way to deliver the notice.
Typically, there are four ways to serve proper notice. These are:
- Send via certified mail
- Use an overnight courier service
- Deliver the notice in person
- Tape the document to the front door
Mailing the notice or delivering by courier is usually the best delivery method because you have proof that the tenant received the letter. This method can make eviction actions more successful because you can prove the tenant received proper notice.
What a Late Rent Notice Should Cover
If you decide to send a late notice for rent, you must include all the relevant details. For example, the notice should state the rental property address, the amount due, late charges, consequences, and methods to pay rent. Remember — accurate information is crucial to prevent the tenant from disputing an eviction notice.
How to Write a Late Rent Notice
Here are step-by-step instructions on information to include when writing a late rent notice.
- The exact rental address as it appears on the rental agreement
- The names of all tenants named on the lease agreement
- The date of the notice
- The amount of rent due
- Late fees you are charging the tenant
- The timeframe to pay the late rent and fees as per the lease agreement and state laws
- Acceptable methods of payment
- The resulting action if payment is not received within the stated period
- Your signature
Before sending the late rent letter, double-check the facts. For example, have you spelled everything correctly? Are you sure any grace period has ended? Is the tenant in breach of the rental agreement? Have you given the tenant the required timeframe to “pay or quit”?
Example of a Late Rent Notice:
Here is a late rent notice template you can adjust to suit your requirements.
Dear [tenant’s name],
This notice is to inform you that as of [date of letter], we have not received your rent payment for the month of [insert the relevant month]. The rent payment owed is for the period of [date] to [date].
Your rent in the amount of $____________ was due on [rent due date]. In addition, according to the terms of the rental agreement, you are responsible for late charges of $____________. Therefore, the total amount of rent and charges are $____________, and this amount is due by [date].
The following forms of payment are accepted: [include the payment methods you accept]
- Personal check
- Money order
- Certified check
- Wire transfer
If your rent payment remains past due, eviction actions may be started. However, if you have already sent payment or believe this is a mistake, you can contact me at [your telephone number].
Late Rent Notice FAQs
How long should I wait before sending a late rent notice?
Landlords or property management companies should send a notice of late rent the day after the grace period expires. The grace period may be in the agreement terms or mandated in state landlord-tenant laws. However, if there is no grace period, you can send the notice the day after the due date.
Can a tenant be evicted for late payments?
Late payment of rent is a breach of the rent agreement. Therefore, a property manager or landlord can begin the formal process of eviction if the tenant fails to pay rent after receiving a “Demand for Nonpayment of Rent” notice
How do I prevent late payments?
You can take several steps to minimize the risk of delinquent rent payments. The first step to getting paid rent on time is to specify late charges, a grace period, rent increases, and acceptable payment methods in the lease agreement.
Additional ways to encourage on-time rental payments include the following:
- Thoroughly screen prospective tenants before signing the lease.
- Send friendly reminders to tenants a few days before the rent is due.
- Encourage tenants to set up recurring rent payments.
- Use a rent payment or property management app to collect rent from tenants.
What is considered evidence of late past due rent?
A late rent notice is the best way to prove a tenant has not paid rent on time. The eviction court will use these notices to establish a pattern of late rent payments, strengthening your chances of evicting the delinquent tenant. Before starting a formal eviction process, it is always best to get legal advice.
Can I allow a tenant to split rent payments?
Accepting partial rent payments is a tricky area for landlords. For example, suppose a trusted tenant is facing financial hardships. In that case, a payment plan can help them get back on their feet and pay rent in full. The bonus for you is that you keep a good tenant. First, however, you must put everything in writing in a lease addendum.
Some landlords allow partial payments during the month so tenants can pay in installments. This payment system is ideal for self-employed or workers in the gig economy. However, the rental lease should clearly state that rent must be paid in full by the first of every month.
But what if you have started eviction proceedings against a delinquent tenant? In that case, it is unwise to accept partial payments. Accepting part payment could result in the eviction process starting over again.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.