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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