Q: I have two rental properties in Plymouth. All my past tenants have been great, however, I now have a woman and her daughters in one of my apartments who have started a pattern of paying rent late. After signing a one-year lease with her two 26-year-old daughters in October, she has paid her rent late for the past few months. Their rent is due on the first of the month, but she has been paying it in the middle of the month and sometimes later. Can I go to small claims court to have their wages garnished?
A: There are several issues here. It is very frustrating when tenants are late paying their rent, as landlords have expenses that rent is intended to cover. Most landlords have a late-fee provision in their lease, which states that if the tenant pays rent after a certain date, such as the fifth of the month, then a late fee applies. Your lease or agreement must specify when the late fee will be imposed, and the late fee cannot exceed 8 percent of the overdue rent payment. For example, if your renters are late on their rent of $1,000, then you cannot charge a late fee greater than $80. You can choose any day of the month for your tenants’ rent to be paid without it being considered late, but typically the fifth day of the month is what landlords use. If your lease has a late-fee provision, you need to start enforcing it, and you should refuse to accept any future rent that is late without the appropriate late fee.
As to prior late payments, you may or may not have waived late fees by accepting late rent without requiring the fee. If your lease has a nonwaiver clause (stating that accepting rent does not constitute a waiver of rights), then you are probably OK. If your lease does not have a nonwaiver clause, then accepting rent without demanding that the late fee be paid at the same time probably constitutes a waiver, and you are likely out those past late fees.
If you have a nonwaiver clause, you can bring your tenants to court to collect the late fees, but you should first make a demand for payment of those fees and refuse to accept rent until the tenants are current on all late fees and rent. If the tenants do not become current, then you can bring an eviction action against the tenants, in which you can also demand payment of outstanding rent and late fees. Please remember, though, that if you accept a partial payment, like half of the late fees and all of the rent, then you cannot bring an eviction action in the same month that you accepted a partial payment.
If the court finds that the tenants owe you money, they have the right to pay all outstanding amounts and continue to live in the unit until the lease is terminated, so long as they abide by the lease terms, including paying rent on time. If the tenants do not pay the money, then the court likely will award you a judgment. After you have the judgment, you can pursue collection remedies, which ultimately may allow you to garnish the tenants’ wages. If you do not have a nonwaiver clause in your lease and/or don’t have a late-fee clause, you should talk to an attorney about updating your lease for the future.
Raising the rent
Q: I own and manage a duplex in St. Paul. The 12-month lease on one of the units ends at 11:59 p.m. June 30. The terms of the annual lease continue month-to-month if the lease has not been renewed or replaced. I plan to raise the rent and change provisions in the annual lease that begins in July. The current lease does not require a 60- or 90-day notification period prior to the date a tenant must vacate. I can see that, without a notice to vacate, tenants might think that I’m giving permission for the old lease to continue past June 30, if they don’t agree to sign the new lease. Do I need to provide the tenants with a notice to vacate on June 30, as part of sending them an updated lease, or can I wait to post the notice to vacate until the last day of May, if my tenants and I fail to sign a new lease by that time?
A: You should send your tenants a letter outlining the new lease terms, including the higher rent provision that starts in July. In that letter, request that the tenants meet with you well in advance of June 1 in order to discuss signing a new lease. If they fail to sign a new lease at that meeting, or tell you they won’t be signing a new lease, then give them a notice to vacate before June 1, stating that their lease terminates on June 30. Remember, if your tenants aren’t signing a new lease, their notice to vacate by June 30 needs to be given to them before June 1. So if you are mailing the notice, you have to mail it before May 27. However, if you are delivering it to them personally, then the last day of May would suffice.
Kelly Klein is a Minneapolis attorney. Participation in this column does not create an attorney/client relationship with Klein. Do not rely on advice in this column for legal opinions. Consult an attorney regarding your particular issues. E-mail renting questions to firstname.lastname@example.org, or write to Kelly Klein c/o Star Tribune, 650 3rd Av. S., Minneapolis, MN 55488. Information provided by readers is not confidential.