As a Jerome rental property owner, possibilities are sooner or later, you’ll have a tenant inquire whether they can make a partial rent payment. While you may want to accept it, the reasoning that something is better than nothing, the reality is that accepting even one partial rent payment might lead to plenty of issues down the road. Although there are strategies to accept a partial rent payment and diminish the risks that come with it, for many landlords, the best solution in most situations is to take a firm stand and insist that your tenant pay their rent in full. In this article, we will talk about why accepting partial rent payments can be so problematic and how to properly handle this complex issue.
Late Fee Disputes
Tenants may believe they can escape being charged late fees or other penalties mentioned in their lease by making a partial rent payment. Yet, anything less than a full payment should still be subject to the same penalties that would arise if no payment was made. Few tenants like late fees and may object or refuse to pay. If your tenant decides to challenge that late fee in court, there’s a strong possibility that the judge will side with your tenant irrespective of what your lease indicates.
Fair Housing Laws
Accepting partial rent payments from one tenant but not another also contains the possibility of running headlong into a discrimination lawsuit. Federal Fair Housing laws are aimed to protect tenants in certain protected classes from being handled unfairly by landlords. If you deny a tenant’s request to make a partial rent payment, and they notice that you allowed a different tenant to do so, they could argue in court that you’ve discriminated against them. Even if you successfully defend yourself, you’ll end up paying for it in both legal fees and a damaged reputation.
If you’ve ever heard the saying, “give them an inch, and they’ll take a mile,” you realize how tough it can be to re-establish strict boundaries with some tenants once you’ve made an exception to the rule. If you permit your tenant to pay a late or partial payment without penalty one time, there is a strong chance that they will do it again – and demand for more time or more leeway afterward. They may also begin to assume that since you didn’t enforce one provision of the lease, you’ll be ready to ignore other violations, as well. You can avoid boundary-testing tenants by carefully stating your expectations in your lease documents and then sticking to them.
In case the state becomes a worst-case scenario, and you think you should evict a tenant, accepting a partial rent payment might cause a serious problem about the eviction process. In other states, accepting even one dollar of rent payment from a tenant after you’ve started an eviction will void the process completely. Not only will you have to start the full eviction process over again from the very beginning, but you will be stuck, unable to collect back rent payments while the eviction process takes its course. As relations with your tenant will eventually deteriorate, the whole issue becomes increasingly difficult for everyone the longer it goes on.
Navigating Partial Payments
Providentially, there are proactive things you can do to prevent some of the most prevalent risks involved with partial rent payments. These include:
- Setting Clear Expectations. Discuss your rent payment policy in your lease documents, especially your policy on partial rent payments. This can help you clearly communicate your expectations to your tenant and minimize the possibilities that they will try to make a partial payment at all.
- Get it in Writing. If you do prefer to accept a one-time partial payment, put it in writing. Prepare and serve your tenant with a Notice of Nonpayment of Rent or other notice that exactly describes the terms of your accepting their partial payment, along with any necessary late charges. Remember to explain the consequences of any new requests or failure to pay the rest of the past-due rent as agreed.
- Accept Multiple Forms of Payment. If your tenant comes up short on cash, one option to avoid partial payments is to permit them to make their rent payment with a credit card or another type of payment. Several modern payment methods offer instant transfers and can provide your tenant some added convenience in a pinch. Just make sure not to accept a personal check, especially a post-dated one. Some tenants will attempt to “float” a bad check to buy time, but if the check bounces, you’ll be punished by bank charges.
Recognizing how to manage partial rent payments is only a minor aspect of successfully managing rental properties. It’s a large task and not one for the fearful. However, if you want to reclaim your time and use it for anything else, why not hire Real Property Management Magic Valley to handle the day-to-day tasks your properties need? Our Jerome property managers will interact directly with your tenants to ensure that things are done professionally, legally, and efficiently, saving your time and complete peace of mind. Contact us online today to learn more.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.