Key Points About Tenant’s Failure To Pay Rent
Paying rent is a core part of the tenant-landlord relationship as it ensures the tenant can keep living in a secure place and the landlord gets their income and money to handle essential repairs.
However, when the tenant fails to pay rent at the designated time, it can cause serious money and legal problems that can affect both parties. In this case, navigating and understanding the problem can be tricky.
Continue reading below as this article will discuss why tenants miss rent payments and discuss two effective steps to take if such a thing happens.
Key Factors Leading to Tenant’s Failure to Pay Rent
Why do tenants sometimes fail to pay their rent? The answer isn’t straightforward, but it is a combination of three factors.
These include:
High Rent Prices.
Rent costs have been increasing and making it harder for a few tenants to afford it. For tenants living in rental areas like Atlanta, where rent costs have been on an upward trend over the years, it can be extremely difficult.
For example, the median rent in Atlanta is about two thousand dollars. In this case, it means that there’s a high likelihood that these tenants get to spend a very big portion of their income on the payment, which in turn limits their spending on basic items and other necessities.
Limited Housing Availability.
If there are not enough housing alternatives in the market, then rental rates can also rise because the demand far exceeds the supply. This scarcity is likely to increase the stress level of the tenants when it comes to paying rent.
In the case of Atlanta, residents have witnessed a price increase due to the insufficient housing supply, which has placed renters in a difficult position. This has made it possible to miss rent payments as some tenants struggle to balance their finances with the increased housing demand.
Economic Factors.
Economic factors such as challenges in the job industry, inflation, and other costs such as sudden emergencies can be a big hit to the tenants. Where the cost of goods has risen, but the source of earnings has not equally improved, meeting up with rental fees could be tough.
In the case of the COVID-19 pandemic, a lot of people in Atlanta, even women in high-risk jobs, became unemployed or had their work hours cut off. This made it hard to honor their rental payment obligations. Even at this time, the economy is still in recovery; some of the tenants may be struggling, as a likely consequence of the economic fallout, to pay rent in full and on time.
Consequences of Failing to Pay Rent
So, in the case where a tenant fails to pay their rent due to these factors, what’s the landlord’s next step?
Well, landlords can take these steps when you fail to pay rent:
Legal Notices.
Missed rent payment obligations are conventionally followed by a legal notice. Such notice demands from the tenants either payment of overdue rent or an explanation as to why no payment was made.
For example, a “Pay or Quit” notice gives tenants around 3 to 14 days to pay the arrears or vacate the property. It is an important phase in the process of eviction since it reminds the tenants of their obligations.
In state statutes, passing this notice is necessary since it offers tenants an opportunity to make payments before the actual eviction. This stage is necessary to make it clear that the landlord has respect for the law and that the tenants are given a chance to redeem themselves.
Eviction.
In cases where rent continues to be unpaid, landlords are obliged to execute the legal eviction process after the notice period. This situation requires legal intervention by the law court in order to remove the tenant from the premises.
However, it’s worth noting that tenants who have been evicted face extra difficulty finding a new place as other tenants fear having the same trouble. In addition to this, the eviction procedure itself takes a considerable amount of time and pressure for both sides, and it takes several months to settle in the courts of law.
Due to the hassle, early remediation of the problem must always be looked at as an option before reaching that stage. For landlords, eviction means loss of expenditure and time spent finding new tenants.
This is why Bay Property Management Group Atlanta suggests actively communicating with your tenant before serving the eviction notice. Doing this allows a possibility to speed up the repayment process without having to go to court.
Importance of Thorough Tenant Screening for Consistent Cash Flow
Proper tenant screening is important in curbing loss of rent and ensuring a stable stream of rental income for the landlord. A thorough tenant screening includes checking areas such as credit and criminal background investigations, as well as references. A credit check is an evaluation of a tenant’s financial capacity, while a background check provides information on criminal acts or tendencies and eviction histories.
It is also essential to contact relevant past landlords or employers and assess their views towards the tenant and the stability of the tenant. This way, dependable tenants are chosen, which enhances the regular cash flow, relevant rent payments, and the care of the property.
Conclusion
To conclude, paying rent on time is one of the ways tenants can build a good harmonious relationship with their landlords during their lease term since it allows stable income for landlords. Due to general economic conditions such as high demand and increase in rent, some tenants are already finding it difficult to make ends meet and pay rent on time.
Before signing the lease, renters need to understand that not paying rent on time will eventually lead to a legal notice and possible eviction. To avoid all these trouble, it’s important to have appropriate background check of the tenants and establish better communication channels as this helps notify landlords about the risk involved with this potential tenant.