Landlords know that headaches and hassles are simply part of the job description when it comes to managing rental properties. Usually, number-one among those headaches and hassles are problem tenants or tenants that always pay late or are difficult to communicate with. Eviction is always an option for landlords when dealing with problem tenants, but that can be a lengthy and expensive process, so it’s good to explore other ways to deal with bad tenants. Below, you’ll find 5 ways to deal with bad tenants in Alabama in order to avoid having to have recourse to eviction.
1. Problem Tenants Who Won’t Pay
A common category of bad tenants in Alabama are those who just won’t pay their rent. This puts the landlord in a difficult situation as the landlord still has a mortgage, property taxes, and property insurance to pay. When a landlord still has operating expenses to pay, but the tenants won’t pay rent, this hurts the landlords profitability and cash flow of the property.
Tenants might not pay rent for a variety of reasons, and often times they’re not being malicious or trying to stiff you. Real estate experts have noted that tenants can withhold rent from landlords for a number of reasons, from cash flow shortages or temporary unemployment, to repair and maintenance disputes. Communication is critical when confronting the issue of a tenant non-payment, and it’s important to understand the tenant and the nature of the issue and try to negotiate, if possible.
As a landlord, you have a couple of options to solve this problem of tenants that don’t pay. The first and most effective is setting up a payment plan that makes paying more manageable for the tenants. Here are a couple things you can do when tenants are struggling financially:
- Implement a policy of accepting a partial payment from a resident once per year. Most landlords will never accept partial payments.
- Prorate late fees and delinquent rent over the remainder of the tenant’s lease
- Charge rent weekly instead of monthly to keep the payment smaller
- Apply the security deposit to the delinquent rent payments especially if the tenant is near the end of their lease
- Forgive late fee incurred on the tenant’s account
Another option is to change the tenants’ living arrangements. Essentially, this is when you rent rooms in a house instead of the house as a whole. It may be that the tenants can afford renting part of the house but not the full house.
2. Tenants Disturbing the Neighborhood
And then there are those who are bad tenants in Alabama because they are too loud or just obnoxious and disturb the neighborhood and community. It could be that you bought the property with tenants already in place or the tenants managed to slip past your screening efforts.
The first step in dealing with this kind of problem tenant is to encourage and allow the tenants to resolve the problem themselves. It is also a good idea to include a clause in your rental agreement that states tenants must behave in a way that doesn’t disturbed others in the neighborhood or community.
Despite having language in your rental agreement that requires tenants to be respectful of the residents in the neighborhood, you may still have to step in and be a mediator for disputes. Just be sure to explain the consequences for not adhering to the lease agreement in a calm manner to aid in resolution.
3. Tenants Who Pay Late
Some tenants do pay, but they always pay late and it feels like their account is always delinquent. When dealing with these bad tenants in Alabama, it’s important to keep in mind that the reason for late rent payments may be due to financial hardships, forgetfulness, or other not so common reasons.
You could meet with tenants that consistently pay late to discuss their situation and develop a plan to get things back on track. You could also do things like waive late fees and other penalties if they promise to pay any late rent in full. Another effective tactic is to send out payment reminders. There are several good property management software services that will automatically send tenants e-mails and text messages when payments are due. These can serve as friendly reminders to tenants and help fix the problem of a tenant that always pays rent late.
4. Don’t Renew the Lease
When the methods outlined above for dealing with bad tenants in Alabama don’t produce results, there still is a possibility you can avoid going through an eviction.
An option you have at this point is simply to refuse to renew the lease. Just be aware that this typically isn’t an immediate solution and that you need to understand your local laws related to tenant protections before you do this. In the state of Alabama it is required to let the tenants know of a non-renewal option to their lease at least 30 calendar days in advance.
5. Consider a “Cash for Keys” Agreement
Another option for dealing with bad tenants in Alabama is the “cash for keys” agreement. This option will cost the landlord money, but usually it’s much less expensive than an eviction and also much faster than an eviction. The cash for keys method has proved to be a great way to get a bad tenant out of your hair and solve the problem. A cash for keys agreement is a legally binding contract, whereby you pay a tenant a lump sum of money, and their lease is canceled, and they have to move out of your property by an agreed upon date.
Cash for keys doesn’t always make financial sense, but in many cases it can be the most cost effective and fastest way to get a tenant to move out of a rental house.
In Alabama, it can easily cost a couple thousand dollars to evict a tenant and take months to do so. If you can just pay $1,000 and have a bad tenant move out within a week, you’ll be able to save a bunch of money – and start renting your property to a more qualified tenant right away.
Dealing with Bad Tenants In Alabama
Whatever method you choose to deploy in dealing with bad tenants, make sure you’re aware of all the legal ramifications and implications. Tenant-protection laws are far broader than they were just a few years ago. Your best bet is to consult an experienced investor in Alabama to get help understanding exactly what you can and can’t do as a landlord. If you need help dealing with bad tenants in Alabama, our company at North Alabama House Buyer would be glad to assist you. Contact us today at (256) 824-9181.