As a University City rental property owner, the probabilities are that one day, you’ll experience a tenant inquiring if they can make a partial rent payment. While you may be convinced to accept it since something is better than nothing, the reality is that accepting even one partial rent payment can generate numerous problems later on. While there are ways to accept a partial rent payment and diminish the risks related to it, for most landlords, the appropriate strategy in most cases is to take a firm stand and insist that your tenant pay their rent in full. In this part, we’ll talk about why accepting partial rent payments can be so problematic and how to navigate this tricky situation successfully.
Late Fee Disputes
Tenants may believe they can avoid being charged late fees or other penalties specified 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 completed. No tenant likes late fees and will likely oppose or decline to pay. If your tenant decides to challenge that late fee in court, there’s a strong possibility the judge will side with your tenant without regard to what your lease says.
Fair Housing Laws
Accepting partial rent payments from one tenant but not another also poses the risk of running headlong into a discrimination lawsuit. Federal Fair Housing laws are generated 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 find out that you allowed a different tenant to do so, they could argue in court that you’ve discriminated against them. Irrespective of whether you defend yourself effectively, you’ll wind up paying for it in both legal fees and a damaged reputation.
Maintaining Boundaries
If you’ve ever heard the saying, “give them an inch, and they’ll take a mile,” you know how complicated it can be to re-establish clear boundaries with some tenants after you have made an exception to the rule. If you allow your tenant to make a late or partial payment without penalty one time, the possibility is strong that they will do it again – and push for more time or more leeway afterward. They may also start thinking that since you didn’t enforce one provision of the lease, you’ll be able to disregard other violations, as well. You can avoid boundary-testing tenants by properly clarifying your expectations in your lease documents and then adhering to them.
Eviction Delays
Should the condition become a worst-case scenario and you feel you must evict a tenant, accepting a partial rent payment can make a real mess of the eviction process. In most states, accepting even one dollar of rent payment from a tenant after you’ve started an eviction will completely void the process. You will not only need to start the whole 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 inevitably deteriorate, the entire procedure probably becomes increasingly difficult for everyone the longer it goes on.
Navigating Partial Payments
Fortunately, there are proactive things that can be done to abolish some of the well-known risks associated with partial rent payments. These include:
- Setting Clear Expectations. Include your rent payment policy in your lease documents, such as your policy on partial rent payments. This can help you properly communicate your expectations to your tenant and decrease the chances that they will attempt to make a partial payment at all.
- Get it in Writing. If you do choose 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 explicitly describes the terms of your accepting their partial payment, along with any related late charges. Make sure that you mention 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 comes up short in cash, one method that you could avoid partial payments is to permit them to make their rent payment with a credit card or another kind of payment. Various modern payment methods include instant transfers, which may provide your tenant an added level of convenience in a pinch. Just keep in mind not to accept a personal check, mainly a post-dated one. Some tenants will attempt to “float” a bad check to buy time, but if the check bounces, you will be responsible for the bank charges.
Knowing how to deal with partial rent payments is just one little portion of successfully managing rental properties. It’s a big responsibility and not one for the fearful. However, if you would want to reclaim your time and dedicate it to other activities, why not hire a Real Property Management Specialist to handle the day-to-day tasks your properties need? Our University City property managers will collaborate 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.
