The US real estate rental market is huge. – Around 36.6% of households are renting their houses. This goes with a lot of paperwork for housing providers that need to regulate the relationships with tenants and make sure everyone pays rent in time. They deliver invoice letters, payment reminders, and a lot of other documents and mail pieces for smooth and legally compliant communication.
When tenants don’t send the due payment in time, landlords need to provide them with a failure of payment notice. Although filling out one of the past due letter templates isn’t the most pleasant experience, it’s a mandatory step. The collection letter template (final notice) helps lenders to receive the due amount as soon as possible and may save tenants from possible legal action.
Read on to learn the rules of sending failure of payment notice and get some past due letter templates:
- What is the failure of payment notice?
- When to use a failure of payment notice and other past due letter templates?
- How to create and send failure of payment notices?
- Collection letter template (final notice and initial reminders)
What is a Failure of Payment Notice?
A failure of payment notice is a written letter or a personally provided notification from the real estate lender to the tenant that reminds the latter about the due rent payment. The past due letter template doesn’t have the legal force and serves an informative purpose. Nevertheless, it may be the last resort taken by the housing provider before a late fee or eviction. The landlord or their representative sends failure of payment notices to warn the tenant, and if this doesn’t help, may start the lawsuit or automatically terminate the contract.

How does it work?
When a real estate lender or agency signs a lease or rental agreement with a tenant, they agree upon specific dates and terms of payment. The tenant usually mails a rent check to the landlord’s address or office several days before the due date. This helps to ensure that the mail piece reaches the destination in time. If the tenant fails to pay the rent, the lender provides them an initial failure of payment notice. Later, it may be followed with a collection letter template final notice that demands to pay rent or quit.
When to Use a Failure of Payment Notice and Other Past Due Letter Templates?
Generally, the collection letter template (final notice) is delivered three days before the contract termination. Still, a lender may use preliminary notifications to inform tenants about the due invoice. Let’s take a closer look at their main types.
INITIAL NOTICE OF FAILURE TO PAY RENT
This rent notice reminds the tenant that their rent payment is overdue. It’s usually delivered from 6th to 10th of the month once it becomes clear that the individual missed the payment. This failure of payment notice is just a reminder letter that helps to minimize the overdue fee. It has no legal impact. The housing provider only informs the tenant about their concerns and the failure to receive the payment by the specified day of the month (usually by 5th, but the date may vary depending on the contract).

FINAL NOTICE COLLECTION LETTER BEFORE LEGAL ACTION
The debt collection letter template (final notice) is delivered if the initial failure of payment notice doesn’t work. It informs the tenant that unless they process the payment, the housing provider may pursue legal action. Although this communication still doesn’t have legal force, it’s already more formal than the initial notice.
THREE-DAY NOTICE TO PAY RENT OR QUIT
It’s the last reminder delivered to the tenant with a delinquent payment three days before the contract termination or eviction. This past due letter template includes the terms of payment, due amount, and late fee. The real estate lender or agent also informs the tenant that if they don’t pay the full rent or deliver up possession of the premises within the stated time, they will face legal proceedings. As a result, the tenant may be forced to leave the occupied premises and recover damages, including rents and court costs. Apart from that, the lender may submit a negative credit report to the respective credit reporting agency. This will affect the credit history of the tenant. Although the three-day collection letter is required to start a legal process, it doesn’t initiate it automatically.