TL;DR
- Communicate with your tenant first, because a missed payment can mean forgetfulness or hardship, not always bad intentions.
- If the tenant wants to stay, consider working with them to develop a written repayment plan.
- State laws govern late rent and pay-or-quit notices, so check local legislation.
- Cash-for-keys agreements may help landlords remove a nonpaying tenant faster than an eviction.
- Evict a tenant who refuses to pay rent with approved methods. Follow state-mandated eviction protocol rather than attempting an illegal self-help eviction.
- Tenant screening, autopay, written terms, and payment reminders all lower the odds of future missed payments.
A tenant who refuses to pay rent can be a landlord’s worst nightmare. Every week, the balance grows higher and higher, adding up to thousands of dollars in lost income. At best, the landlord will need to confront their tenant; at worst, that landlord will have to start a time-consuming, expensive eviction.
If you’re stuck in this conundrum, don’t panic. Rather than jumping straight to eviction, you’ll have to determine exactly why the tenant refuses to pay rent and what to do next.
In this guide, we’ve put together what to do after your tenant misses a rent payment. We’ll go over notice requirements, cash-for-keys agreements, eviction proceedings, and how to recover the money you’re owed, all while staying within your legal limits.
Why Your Tenant Refuses to Pay Rent
Unfortunately, nonpayment of rent is more common than landlords might guess. Every tenant has a different reason for not paying rent, whether it’s due to simple human error, financial hardships like job loss, or technical issues preventing them from sending it.
Whether or not your state legally mandates you to do so, offering a grace period for late rent allows your tenants to get around at least some of those issues. During the grace period, you can send payment reminders to help your tenant resolve the issue without consequences.
Talking things out may help you avoid a stressful eviction or unnecessarily damaging your relationship with a tenant. That said, a tenant who refuses to pay rent or communicate with you warrants a little more concern and may require legal action to recover your money.
What to Do Before Sending Notices
Before you pull out the late rent notice, you should take a few steps to make sure you’re acting within your legal rights. If you want to avoid hard feelings and lost time, start with these five steps:
- Search for the payment first. Check the rent portal and your bank account for any pending transfers. Failed ACH deposits, for example, may initially appear to be nonpayment.
- Contact the tenant within a day or two to ask whether they encountered a technical problem or simply forgot to pay.
- Review the lease agreement to check the grace period, late fee, and notice terms.
- Document everything as you go to create a verifiable paper trail that will support your argument in court.
- Send the required notice only after any lease- and state-mandated grace periods expire.
By following this checklist, you can prevent a simple miscommunication from turning into a major confrontation.
When to Use a Payment Plan
If the missed payment is due to temporary hardship and the tenant wants to stay, a written payment plan often works better than a notice. Ideally, the plan should keep a paying tenant in place and restore your rental income.
- Start with the total balance, which includes rent, late fees, and any other charges.
- Set an upfront, good-faith payment, due at signing, to confirm the tenant’s commitment to following the plan.
- Break the remaining balance into fixed installments, each with its own due date.
- Make it clear that the tenant must continue paying regular rent in addition to the installments.
- Include default terms that clearly explain what happens after a missed payment.
- After finalizing the agreement, have both parties sign and date the document, then keep a copy on file for future reference.
While developing the payment plan, clarify whether accepting payments pauses or resets a notice you already sent. Some states treat a partial payment as a reset, meaning the notice period clock will restart. And, as with any rental arrangement, get every term of the repayment plan in writing.
Can a tenant legally withhold rent?
In some states, tenants can legally withhold rent payments if the landlord violates the warranty of habitability. Basically, this means that the landlord failed to provide a safe, habitable home and/or refused to complete essential repairs to make the unit livable.
Tenants can only legally withhold rent in certain livability violations, like:
- Landlord neglect that leaves the unit without heat, running water, or electricity,
- Toxic hazards like lead paint, black mold, or a severe pest infestation, or
- Major structural or safety defects that make the unit unsafe.
Depending on your state’s landlord-tenant laws, tenants may also be allowed to withhold rent, place it in escrow, or repair and deduct. If the tenant is within their rights to withhold rent, their landlord must check state and local laws before proceeding with an eviction for nonpayment.
However, if a tenant’s claim doesn’t meet the statutory requirements, the landlord may be able to push forward with the notice and eviction.
Sending a Late Rent Notice or a Pay-or-Quit
After the grace period has passed and you’ve attempted unsuccessfully to reach a solution with the tenant, it’s time to send a late rent notice, a pay-or-quit notice, or both (depending on your lease and local law).
A late rent notice itemizes the overdue rent, any late fees, the new deadline, and what happens if the tenant doesn’t pay. Meanwhile, a pay-or-quit notice provides the tenant with a set time period, typically a few days to several weeks, to either pay up or move out.
Some jurisdictions allow landlords to send a pay-or-quit notice immediately after the grace period, while others require a courtesy notice first. You’ll also have to pay close attention to required service methods, whether you’re handing it to the tenant in person or sending it via Certified Mail.
Before you serve the notice, check whether accepting a partial rent payment will invalidate that notice or affect a pending eviction case. Additionally, you should keep a timestamped copy of every notice and add it to your documentation.
Removing the Tenant With a Cash-for-keys Agreement
Evictions can take weeks to months to process, but with a cash-for-keys arrangement, you could get your rental property back much faster. In these agreements, you pay the tenant to move out voluntarily rather than deal with all the hassles of an eviction.
Though it might sting to give a nonpaying tenant money to leave, doing so may be worthwhile in certain situations. These arrangements typically cost less than an eviction and can also play out much faster. Plus, nobody has to go to court, and the tenant gets to keep an eviction off their record. It’s a win-win.
To start, put every term of the agreement in writing, and have both parties sign before proceeding with payment and the key return. You should wait to pay the buyout until after the tenant moves out, returns all the keys, and meets any other conditions specified in the agreement.
Naturally, cash-for-keys works best with a cooperative tenant. If the tenant refuses to pay rent and won’t communicate with you, you may need to proceed straight to eviction.
How an Eviction for Nonpayment Works
When a tenant refuses to pay rent and ignores the pay-or-quit deadline, you’ll need to start an eviction for nonpayment. The exact process and steps will vary by location, but here’s a general idea of what to do:
- File the case by submitting an Unlawful Detainer action (or your state’s equivalent) in the property’s county court, along with filing fees.
- A sheriff or process server then serves the summons and complaint to the tenant who refuses to pay rent, allowing the case to proceed to a hearing.
- Attend the hearing on the scheduled date and present your evidence to the judge.
- If you win, the judge will issue a judgment for possession, thereby returning the rental to you and ordering the tenant to pay their past-due rent.
- Obtain a writ of possession (or your state’s equivalent) from the court clerk’s office.
- An authorized law enforcement officer will then execute the writ and oversee the tenant’s departure from the property.
Evidence of nonpayment to bring to court includes the lease agreement, records of prior communication, and documentation of service of the notice. That detailed paper trail can determine the outcome when a landlord isn’t sure how to evict a tenant who refuses to pay rent.
Important legal note: Never change the locks, turn off utilities, or remove the tenant’s belongings to attempt to get them to leave. Every state prohibits self-help eviction tactics, and attempting them can expose you to legal liability. Stick closely to your state’s eviction standards.
What to Do When the Tenant Still Won't Leave
Obtaining a court order is an important win, but that document alone won’t make a tenant who isn’t paying rent leave. An authorized law enforcement officer, usually a sheriff or marshal, will have to remove the uncooperative tenant from your property before you can retake possession.
After receiving the writ from the court clerk, you’ll need to schedule the removal through the authorized officer’s department. The officer will usually post a short notice at the property, then oversee the move-out if the tenant still hasn’t left.
If the tenant leaves behind any personal belongings, you may need to store them for a set period before disposing of or removing them. Storage requirements vary by state, so do your research well before you get to this stage.
Getting Your Money After an Eviction
While the eviction judgment will enable you to remove a tenant who refuses to pay rent, getting your money back is a different story. The eviction judgment typically orders the tenant to pay what they owe, plus legal fees (but there’s no guarantee you’ll see a penny of that money).
With that said, you can take a few steps to recoup your losses:
- As permitted by state law, apply the security deposit to the unpaid rent and itemize all deductions in writing.
- Obtain a money judgment to get the ball rolling on lawful collection.
- Offer a payment plan to the tenant after the eviction judgment to try and get back at least part of the unpaid rent.
If the tenant ignores the eviction judgment, state law may allow you to use tougher collection tools:
- Wage garnishment or bank levies are available in many states. This route allows landlords to garnish a former tenant’s wages or freeze their bank account until the debt is paid.
- A licensed collection agency can help you get back that unpaid rent (though agencies charge a percentage of recovered funds).
- Report unpaid rent to a credit bureau or tenant screening service if your local laws allow.
If you choose to report the debt, the Consumer Financial Protection Bureau requires landlords and collectors to furnish correct rental and eviction information. The CFPB also investigates disputes under the Fair Credit Reporting Act, so it’s crucial only to send information you can verify.
Even with all of these solutions at your disposal, in all honesty, collecting unpaid rent is usually an uphill battle.
Research suggests that fewer than 10% of landlords recover all the rent they’re owed, even after an eviction. With that in mind, you’ll have to weigh the costs of these strategies against the amount you can realistically recover.
Get Ahead of the Next Missed Rent Payment
A single missed payment can spiral into months of lost rent and legal battles before you can recover a single dime. However, it’s important to note that this is just the worst-case scenario. Landlords can often resolve nonpayment issues by communicating reasonably with tenants and forming payment plans.
You can also prevent payment problems by fine-tuning your property management toolbox.
Run thorough tenant screenings that include credit and eviction checks, offer Auto Pay and online rent payments, and send regular rent reminders ahead of the due date. Reporting on-time rent to credit bureaus also gives renters an incentive to pay on time to raise their credit scores.
Start a free 14-day trial with TenantCloud to put our screening and rent collection tools to work for your portfolio.
Frequently Asked Questions
How long does it take to evict a tenant for non-payment of rent?
If a tenant refuses to pay rent, the time can vary between initial steps and eviction. Eviction timelines vary widely by state and county. Evictions may take only a matter of weeks in some places, but in other locations, eviction cases can drag on for months.
Can I keep the security deposit if a tenant stops paying rent?
Many states allow landlords to apply security deposits toward unpaid rent, typically after the tenancy ends. Even so, a single deposit rarely covers months of missed rent, so treat it as a partial offset rather than as a replacement for an eviction judgment.
Is cash-for-keys cheaper than eviction?
Often, yes. If the tenant cooperates, a cash-for-keys agreement can get them out of the unit far faster and cheaper than a traditional eviction.
What happens to a tenant's credit if they're evicted?
An eviction case may appear in court records and tenant screening searches, impacting the tenant’s ability to secure housing in the future. While eviction judgments don’t automatically affect credit scores, unpaid rent sent to collections can appear on a credit report and lower the tenant’s score.
Can I change the locks if a tenant won't pay or leave?
No. Self-help evictions, including lockouts, are illegal in all 50 states, even if a tenant refuses to pay rent. Instead of going this route, you must follow all local eviction guidelines and obtain a court order authorizing law enforcement officers to evict a tenant who refuses to pay rent.
