The profitability of your rental property depends on your major source of income—rent from tenants. If all goes well, you’ll be able to collect rent, reliably, on a monthly basis, in excess of your ongoing expenses. You’ll easily meet all your ongoing costs, with a bit left over to serve as profit, all while your property continues to appreciate.
But what happens when you have a tenant who misses a rental payment? You might be out hundreds to thousands of dollars for the month, and if this turns into a recurring problem, the entire profitability of your operation could be compromised—or they could have just forgotten the payment in a moment of confusion.
So what should you do if and when your Texas tenant doesn’t pay rent when it’s due?
When Rent Is Due (and When Rent Is Late)
First, check the lease agreement to make sure you have a correct understanding of when the rent is officially due. Most rental agreements in Texas state that the rent is due the first day of the month, even if that day is a weekend or holiday. However, you may have a clause that states that rent will be due on the next business day if the first falls on a weekend or a holiday. You may also have an alternative arrangement for when rent is due.
Accordingly, rent is officially “late” the day after it is due. If rent is due the first of the month, it is considered late if you do not have it the second of the month.
Accepting Late Rent
In most states, landlords are formally required to give tenants the opportunity to pay their late rent before forcing them to move out of the unit. In Texas, there is no such law; landlords can give their tenants a second chance, requesting back payment, or they can begin the eviction process.
For the sake of simplicity (and accounting for innocent mistakes), it’s commonplace for Texas landlords to forgo the eviction option for as long as possible. In many cases, a simple text message reminder that rent is due is enough to prompt the tenant to take action. Start with a polite, yet firm reminder about rent, and see how the tenant responds. Being accommodating and understanding can go a long way in securing your landlord-tenant relationship—and hopefully, keeping the tenant as long as possible.
Your rental agreement may stipulate that there’s a late fee associated with a late rent payment. If this is the case, you may waive that fee if you feel there’s been an innocent mistake, or you may ask for the fee to disincentivize future missed payments. Note that in Texas, you must provide at least a two-day grace period before imposing the fee.
If your tenant has missed multiple rent payments, remind them about all rent that is past due.
Beginning the Eviction Process
If your tenant has missed several rent payments in a row, or if they’re not responding to your requests for past rental payments, your only remaining option is to begin the eviction process. According to state laws, you can give a tenant a notice to vacate the property as early as the day after rent is due; though it’s more common to give the tenant more time.
As a landlord, you’ll have the option to demand the tenant vacate no matter what, or give them the opportunity to pay the rent they owe within three days. This three-day period begins once the notice is officially given. If they decide to pay the rent they owe, you can recall the notice. If they refuse to pay, they must move out—and if they don’t move out, you’ll have to follow future eviction proceedings.
Serving an Eviction Notice
Your method of communicating the eviction notice matters. All eviction notices must include several pieces of information, including:
- The date the notice was initially served to the tenant.
- The full name of the tenant and the address of the rental unit.
- The reason for the eviction (in this case, late or missed rent payments).
- (If desired) an option for repaying the missed or late rent.
- A full statement that the tenant must move out within three days, along with a final date and time by which the move must occur.
- A statement that if the tenant does not move out, the landlord has the option to take legal action in the form of an eviction lawsuit.
- A statement of how the notice was delivered.
Also, there are a few rules regarding how the eviction notice must be served. A landlord or agent of the landlord (like a property management firm) can personally give the notice to the tenant or other occupant of the rental property who is at least 16 years old. The notice may also be posted on the inside of the front door of the property (assuming you have a way to legally enter the property), and in cases that prohibit you from entering, the outside of the front door. You can also mail the notice with a return receipt.
Filing an Eviction Lawsuit
If the tenant moves out on their own, your work is done. However, if the tenant refuses to pay and refuses to move, you’ll need to file (and win) an eviction lawsuit. This process can get messy, taking a long time while your tenant continues to occupy the property. However, if you win the proceedings, the tenant will be forcibly removed from the property by a law enforcement officer.
Hire a Property Management Firm
Collecting rent and staying on top of tenants can be both tiring and aggravating. That’s why you should hire a property management company to do the work for you. For a small fee each month, a property management firm will collect rent on your behalf, take care of property- and tenant-related issues, and even help you fill new vacancies when they’re created. If you’re interested in learning more, contact Green Residential for a free quote today!