As a Stone Oak rental property owner, the probabilities are that eventually, you’ll have a tenant request if they can make a partial rent payment. While you may be tempted to accept it, believing that something is better than nothing, the fact is that accepting even one partial rent payment can provoke a few different issues in the future. Although there are options to accept a partial rent payment and eliminate the risks that come with it, for most landlords, the most effective solution in many situations is to take a firm stand and insist that your tenant pay their rent in full. In what follows, we’ll evaluate why accepting partial rent payments can be so problematic and how to deal with it easily if this arises.
Late Fee Disputes
Tenants may suppose they can avoid being charged late fees or other penalties listed in their lease by paying a partial rent payment. However, anything less than a full payment should still be subject to the same penalties that would arise if no payment was made. Few tenants want late fees and may object or be hesitant to pay. If your tenant attempt to challenge that late fee in court, there’s a solid chance that the judge will side with your tenant regardless of what your lease says.
Fair Housing Laws
Accepting partial rent payments from one tenant but not another also poses the possibility of a discrimination lawsuit. Federal Fair Housing laws are created to protect tenants in some protected classes from being treated unfairly by landlords. If you deny a tenant’s request to make a partial rent payment, and they later see that you allowed a different tenant to do so, they could argue in court that you’ve discriminated against them. Regardless of whether you effectively 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 understand how demanding it can be to re-establish clear boundaries with some tenants once you’ve made an exception to the rule. If you authorize your tenant to make a late or partial payment without penalty one time, the odds are high that they’ll do it again – and demand for more time or more leeway later on. They may also start expecting that since you didn’t enforce one provision of the lease, you’ll probably ignore other violations as well. You can avoid boundary-testing tenants by clearly defining your expectations in your lease documents and then sticking to them.
Should the situation become a worst-case scenario and you find you must evict a tenant, accepting a partial rent payment can make a real mess of the eviction process. In many 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 surely deteriorate, the whole scenario is likely to become increasingly difficult for everyone over time.
Navigating Partial Payments
By good fortune, there are some proactive things you can do to abolish some of the most prevalent risks associated with partial rent payments. These include:
- Setting Clear Expectations. Include your rent payment policy in your lease documents, as well as your policy on partial rent payments. This can help you clearly communicate your expectations to your tenant and reduce the possibility that they will attempt to make a partial payment at all.
- Get it in Writing. If you do opt 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 essentially describes the terms of your accepting their partial payment, as well as any associated late charges. Remember to explain the consequences of any additional requests or failure to pay the rest of the past-due rent as agreed.
- Accept Multiple Forms of Payment. If your tenant has no cash available, one solution to avoid partial payments is to permit them to make their rent payment with a credit card or another method of payment. Various modern payment methods provide instant transfers and can give your tenant an additional degree of convenience if necessary. Just remember not to accept a personal check, particularly a post-dated one. A few tenants will try to “float” a bad check to buy time, but if the check bounces, you will be the one who slapped with bank charges.
Understanding how to cope with partial rent payments is just one tiny portion of successfully managing rental properties. It’s a big job and not one for the faint-hearted. But if you like to reclaim your time and spend it doing other things, why not hire Real Property Management Campanas to handle the day-to-day tasks your properties need? Our Stone Oak property managers will engage directly with your tenants to ensure that things are done professionally, legally, and efficiently, giving you time and total 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.