Pay or Quit Notice – Here’s How it Works

Eviction notice iconA Pay or Quit Notice is a form of eviction notice a landlord gives their tenant when the rent is late.  Late rent makes both the tenant and the landlord uncomfortable. There may be a perfectly valid reason for rent to be late – illness or loss of a job. Alternatively, your tenant may simply be irresponsible. Whatever the reason, it is important to take action before the amount of late rent accrues to the point where your tenant will be unable to correct the situation and you will be left with no recourse to collect except for a lawsuit. This comprehensive article provides you everything you need to know to write and serve your notice correctly.

A pay or quit notice is a form used to demand the rent payment that is overdue and payable. Your tenant has broken their signed lease or rental agreement that set the time at which rent is due. The pay or quit notice legally informs the tenant that you are about to begin eviction proceedings against him if the default is not corrected within a set number of days.

Usually receiving a pay or quit notice, also be called a “Notice to Pay Rent or Quit,” is enough to convince a late tenant into paying the rent if he is able to or quit the premises. Your tenant may call you immediately and promise to make payment arrangements to bring their rent current. Although it is great getting such a call, make sure they sign a Promise to Pay form agreeing to any terms you allow until the rent is paid up to date. Make sure they understand that if they default on the Promise to Pay, eviction will start immediately.

When to Use a Pay or Quit Notice

The best way to handle a delinquent tenant is to contact the tenant and to get them to pay their back rent. However, a non-compliant tenant often does not answer their door or phone, nor will they respond to text or phone messages. In this case, the pay or quit notice provides the landlord recourse to obtain the amount in arrears.

In order to help you understand when to use a pay or quit notice, we present two scenarios for your consideration.

Scenario #1 – Notice prompts tenant get current

A young couple was excited to move into their first home – a modest apartment in a family-friendly complex. Within a year, they had a child. A year later, the husband lost his job, one for which he had trained specifically. The area where they lived had few jobs in his field. However, both of them had family locally and wanted to remain where they were. The husband took temp jobs and did everything he could to continue providing for his family, which now included two young children. When Christmas came, he did not want to skimp on presents and overspent. Then his wife became ill and was hospitalized for three days. With no health insurance, large medical bills became a source of worry. The couple did not want their credit to be ruined, so they concentrated on paying their credit card and medical bills. Additionally, they kept the utilities paid. However, there just wasn’t enough for rent. It was late one month, then the next it was even later.

The property owner knew the tenants had fallen on hard time. They were responsive when he contacted them, explained why they were late, and assured him things were getting better and they would be caught up soon. The property owner decided he would wait and give them some time to catch up, but after three months when they missed rent completely, he issued a pay or quit notice. The couple borrowed from family, sold out-grown children clothes, and scraped up the money to become current on their rent. Shortly after, the husband got a permanent job and got back on track with timely payment.

Scenario #2 – Notice prompts tenant to vacate

A landlord had a tenant in one of his rental properties who was not paying rent. When contacted, the tenant at first made excuses, then became angry and defensive, and finally stopped responding at all. The landlord delayed taking action, but after the tenant was four months in arrears, he issued a pay or quit notice. Unfortunately, the tenant decided to quit is residence and the landlord lost four months of rent. Additionally, the tenant left the property with severe damage and moved out of state to avoid further contact with the landlord.

Scenario #3 – Notice prevent future defaults

An experienced property owner required his managers always to contact renters late or delinquent on their rent. As a result, seldom did a tenant actually miss a month’s rent. When they did, they immediately received a visit or phone call to set up how the rent would be brought current. Additionally, if the tenant was non-cooperative or the manager felt that payment was not forthcoming, the tenant received a pay or quit notice. As time went on, the need to do so decreased as tenants knew timely payment was expected.

Most often, tenants will pay when they receive a pay or quit notice. However, if they don’t your notice becomes the first step in a court action. Therefore, it is important your notice is legally correct. Judges often scrutinize the notice carefully. Errors can mean the loss of an eviction lawsuit and the landlord may end up paying the tenant’s attorney and court fees. Since you never know the response of a tenant and what action may follow, always make sure all notices are prepared and served correctly.

Contents of a Pay-or-Quit Notice

Although you should contact your local housing authority to obtain details about required contents of the pay or quit notice, as well as the procedures required to deliver the notice, the following general guidelines will help you get started:

  • Write the title for your pay or quit notice across the top of the letter. In some states, the number of days you are giving is part of the title. For example, you may need to title the document “Three-Day Notice to Pay Rent or Quit.”
  • If not included in the title, the number of days for the notice must be specified. This can be three days (most common) or more, depending on your decision and your state’s laws.
  • Include the names of each of the tenants.
  • Specify the address of the rental property.
  • State the amount of rent the tenant owes you listed by due date and rent amount for each missed payment with the total amount owed at the end of the list.
  • State clearly that if the tenant does not pay, he must move out of the rental property and forfeit his lease.
  • Include a written demand that the tenant pay the full stated amount within a certain number of days as determined by your state’s laws.
  • Include payment details: the mailing address if you are allowing payment by check, the address to which the tenant can deliver the money, or the need for a certified check or money order.
  • Include a signature and date your pay-or-quit notice.

You cannot include other owed amounts, such as late charges, unpaid utilities, and reimbursement for damages. Additionally, you may not be able to include all the rent owed if some is older than one year ago.

Some Perceived Problems with Pay or Quit Notices

You may wish to avoid handing out pay or quit notices. However, the landlord who does so when necessary often finds a reputation of not putting up with late rent payments is desirable. If your tenants know you will take action when rent gets behind, they are much more likely to prioritize making their rent payment before paying other bills or spending their money foolishly.

Many landlords conclude that a pay or quit notice will lead to a court battle for eviction. However, the notice is a tool to get the tenant’s rent, not to evict them. Remember that your tenant probably wants to avoid the expense and inconvenience of a move. The fact is, the majority of tenants who receive a pay or quit notice do pay up within the number of days allowed.

How to Deliver the Pay or Quit Notice

Now that you understand the worst thing a landlord can do is not take immediate action, the question may arise, “How do I deliver the pay or quit notice?”

At the bottom of your Pay or Quit Notice, there is usually a space for Proof of Service information. Sign and date the notice and have it ready, leaving blank the method used. The reason for doing so is to allow you to use whatever method is most appropriate.

There are a number of methods for serving a notice to quit or pay rent.

Mail the Notice

Probably the simplest method, send the notice to your tenant by registered mail with a return receipt so that you have proof your tenant received the notice.

Personally Serve the Tenant

The landlord can deliver the notice or have the property manager, if there is one, do so. If the notice has led to tension with the tenant, this method may not be desirable.

Substitute Service and Mailing

Sometimes the tenant is not available for personal service. In this case, you may serve anyone of “suitable age” at the property. To be safe, make sure the person you serve is at least 18 years of age. After you have served the notice, follow up by mailing a copy to the tenant(s).

Post and Mail

If you cannot find the tenant or a substitute to serve the notice to, you may use “service by posting.” You affix the notice to the front door of the residence and mail a copy to the tenant’s residence.

Hire a Professional Server

If you choose to hire a server, find one with a record of timely serving notices and providing proofs of service.

Now that you know the methods of serving the pay or quit notice, which one should you use? The method you choose to use is dependent upon the situation and your personal preference. If your relationship with your tenant has become antagonistic, personally serving the notice may not be advisable. However, if you decide to serve the notice in person, the tenant is not available, but an adult “friend” of the tenant answers the door, substitute service and mailing will work. Property owners with multiple complexes or stand-alone rental units may find the services of a professional well worth the expense. Additionally, many property owners and managers prefer posting and mailing as they find it scares and embarrasses tenants into paying what is owed. Remember, to have your pay or quit notice signed and ready for you to specify the method of service used when you decide which method is best or actually deliver or post the notice.

The purpose of a pay or quit notice is to compel a tenant to pay back rent. The notice gives the tenant a certain number of days to either pay the rent he owes you or to move out. Once you have presented the notice, if your tenant does not pay you, you can begin the eviction process.

Remember, the worst decision you can make is to ignore late or unpaid rent. Timely communication about the problem and how it can be resolved is imperative and will frequently prevent the need for a pay or quit notice. If you do it correctly, a pay or quit notice is not that difficult.

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