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HOW TO HELP YOUR MOBILE HOME PARK TENANTS
AND KEEP YOUR CASH FLOW
By Frank Rolfe
It is impossible to be a landlord and
not receive frequent requests to “help” your tenants. These requests normally
revolve around payment of the rent – either to pay late or to pay a reduced
amount. And the way you handle these requests has a huge impact on your
business, and the life of your tenant.
First, let’s look at the request to pay
rent late. Normally, the tenant has an excuse for paying rent late, such as a
delayed check from an employer or social security. And sometimes the reasons are
legitimate. However, you must never allow someone to pay rent late
without consequences. The tenant who is paying late must pay a late fee,
as should be standard with all of your customers. If you allow the tenant to pay
rent late and not pay a late fee, you have set a dangerous precedent that will
be spread by word of mouth throughout the park. Additionally, you must explain
to the tenant that you will begin the eviction process as scheduled if the rent
has not been received during the grace period, but sill stop the process as soon
as the rent is received. For example, if the park sends out ten day demand
letters on the 7th of the month, then you should go forward with
sending the letter, regardless of any advance request by the tenant. You can
always call off the eviction process if the rent is received. However, you
cannot afford to delay beginning the process as scheduled. That way, if the
tenant is lying and is not going to pay the rent, you can kick him out in line
with any other tenant who failed to pay the rent. Bear in mind that a lot of
times the condition that forces the tenant to request to pay late is a
structural change in the tenant’s finances that will eventually force him to
leave the park. For example, the delay in receiving disability payments from the
government may be the result of being kicked out of that program. Similarly, a
tenant who claims he is getting paid late by his employer may actually have lost
his job, or has been laid off due to lack of work. This problem is not going to
go away in the near future – only get worse.
Requests to pay less than the required
rent require the same proactive approach. If you agree to let a tenant pay less
than the required amount, you will create a deadly precedent in your park.
Nothing will put you out of business faster than receiving partial rent every
month – none of your bills can be paid with partial payments. But the
truth about letting a tenant pay less than they owe, including no rent at all,
and not evicting them is that you are really setting them up for losing their
home and putting them out on the street. You have become an accessory to the
crime. The fact is, if you let the tenant get more than one month behind on
their rent, they will never be able to catch up. It is very hard for the average
tenant to manage their finances well enough to pay the existing month’s rent,
much less an even greater amount. If you force the tenant to pay the rent or be
evicted, then you force them to take immediate action to solve their financial
problem. Maybe they need to get a second job, or change their payment
priorities, or get a bridge loan from a relative. The sooner they focus on their
finances, the faster they will get back out of trouble. By letting them pass on
their rent, you are basically loaning the tenant money – a loan they will never
be able to pay. Think sub-prime predatory lending, because that’s what it is.
And the result will work for them as well as it has for the mortgage industry.
When you don’t force the issue that very month, you are actually doing a
disservice to your tenant. And their family and any other person living with
them, who is soon to be homeless. In a mobile home park, the rent is relatively
low – maybe $200 per month – and well within the reach of any person even
earning minimum wage. It’s not a money issue when a tenant can’t pay – it’s a
prioritization issue. They are testing you to see if you are one of the bills
that can be rolled when that big screen T.V. is on sale, or there is an
Aerosmith concert to buy tickets for.
So how do you respond to a rent request
from a tenant. First, tell them that you have systems in place that do not allow
for customization. Explain that you have to continue with the eviction process
no matter what, but you will call it off once the rent has been paid in full,
plus the appropriate late fee. It also helps to tell the tenant that you are not
the owner (even if you are) and that your boss (even if you are the boss)
doesn’t allow any rent deals. This is the type of response that the tenant is
used to hearing from the more important bills he has (car payment, charge card,
utility company) so he will immediately group you with the “have to pay” bills.
Nobody likes to be the “tough guy” with
their tenants. However, when it comes to the rent, “tough love” is imperative.
So do your tenant and yourself a favor, and don’t give in when tenants call you
about rent.
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