What should you do if a Section 8 Tenant fails to pay their rent?
As a landlord, a failure by a tenant to pay their rent is not quite as devastating as in other situations. You’ll still receive your monthly payment through the Section 8 program whether or not your tenant has paid their share. But, what should you do if your tenant fails to pay their rent? As a landlord, you have rights when it comes to approaching eviction. But, with years of working with Section 8 tenants as a busy landlord, I’ve come up with some best practices that will help you, and your tenant, to pay their rent as soon as possible.
Below, I’ve outlined a few different different approaches you can take as a landlord if your tenant fails to pay their rent. In my experience, these approaches bring about the best outcome for you, and for your tenants in the long run.
What to do if your tenant fails to pay their portion of the rent
There are many reasons that a Section 8 tenant may be unable to pay their rent one month, and the approach you take as a landlord should depend on why the tenant is facing difficulties. It is important to remember that Section 8 tenants tend to not have a lot of additional income. The inability to pay the rent may cause them extreme stress and worry, and when you provide constructive solutions as a landlord, you can both quickly arrive at a solution.
If your tenant has lost their job: If a tenant has lost their job and is unable to pay rent, the good news is that reporting this change in status under Section 8 can help them to reduce their required monthly rent payments. Once their loss of income is reported, your payments through the rental program will increase, leaving you financially sound, and leaving your tenant in a better position. Providing your tenant with this information, and working with them in a calm and supportive manner can help this change in status to be approved quickly, helping both tenant and landlord.
For example. Let’s say that your tenant, John, has an apartment that you receive $1,200 per month in rent on. Under John’s Section 8 Voucher, he is responsible for paying $300 per month in rent, while you receive $900 per month directly through a Section 8 voucher. When John reports the loss of income through Section 8, they will adjust this ratio on their voucher. So, instead of paying $300 per month, John may receive a reduced payment of $100, meaning you’ll then receive monthly payments from Section 8 for $1,100, ensuring your total is at $1,200.
If the tenant is facing a financial emergency: From time to time, we all face financial burdens, and these burdens can hit Section 8 tenants particularly hard. If a tenant misses a month of rent because of difficult circumstances, but will be able to pay their rent as normal the following month, I recommend that you come up with a fair payment agreement to allow the tenant to make up the difference in payment. If a tenant is facing a short term financial emergency, you may also want to refer them to the local family service agencies. Many of these organizations, like John F. Long Family Services, can help families in times of need.
Let’s use the example of John again. Let’s say John has faced a dental emergency, and cannot pay his $300 rent for one month, but knows he will be able to pay again the next month. In this scenario, you’d continue to receive $900 per month in Section 8 payments, and may ask John to pay $400 per month in rent for three months, to make up for his missed payment.
If a tenant fails to pay their portion of the rent, obviously this impacts your income as a landlord. But, with the guaranteed payments made through Section 8, many landlords can afford to find constructive ways to work with their tenants in a flexible way. With a little work and patience, landlords are actually making a huge impact on the lives of their tenants.
Your rights as a landlord
As a landlord, I understand how difficult it can be when tenants fall behind on their rental payments. In fact, one of the reasons that I enjoy renting to Section 8 families is the fact that much of my income is guaranteed each month. If a tenant fails to pay their rent within five days of the agreed date, you are within your rights as a landlord to serve a tenant with a Notice of 5 days to pay rent. If, after this notice has passed, you are also within your rights to file for an eviction notice, and to report the tenant through Section 8.
But as a landlord, I’d like to provide some insight and perspective on how this may impact your tenants. For many Section 8 tenants, the most valuable thing they own in their lives is a Section 8 voucher. Many of these families live in a financially precarious situation. When you file an eviction notice, this notice will be sent to the Section 8 Housing Authority, who may chose to revoke your tenant’s voucher - something that they may have had to wait ten or fifteen years to obtain.
A compassionate and sensible approach
It can be tempting for landlords to move for an eviction notice if their tenants have not paid the rent. Luckily, Section 8 provides a number of opportunities for landlords to assist their tenants, assuring they receive their full payment without devastating the lives of their tenants. With a little compassion, and a common-sense approach to handling these situations, landlords can help tenants to overcome a financial hardship without compromising their housing, and financial future.
Renting out an empty apartment is a time-intensive situation. If you have a tenant that in general has been good, taken care of your property, and usually pays their rent on time, I encourage you to use one of the approaches above to resolve problems with rental payments. In the end, you’ll receive the money that you are owed - and may help a financially insecure family to stay afloat.