As a Keller rental property owner, the probabilities are that someday, you’ll encounter a tenant asking if they can make a partial rent payment. While you may be eager to accept it since something is better than nothing, the reality is that accepting even one partial rent payment can trigger numerous difficulties soon after. While there are approaches to accept a partial rent payment and prevent the risks associated with it, for many landlords, the proper course of action in several instances is to take a firm stand and insist that your tenant pay their rent in full. In this segment, we’ll analyze why accepting partial rent payments can be so problematic and how to effectively control this tough issue.
Late Fee Disputes
Tenants may think they can avoid being charged late fees or other penalties outlined in their lease by making 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. Many tenants don’t like late fees and may oppose or refuse to pay. If your tenant should decide to challenge that late fee in court, there’s a good chance the judge will side with your tenant no matter what your lease says.
Fair Housing Laws
Accepting partial rent payments from one tenant but not another also carries the risk of running headlong into 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 catch on that you allowed a different tenant to do so, they could argue in court that you’ve discriminated against them. Even if you defend yourself successfully, 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 know how challenging it can be to re-establish strong boundaries with some tenants after you have made an exception to the rule. If you agree to your tenant to make a late or partial payment without penalty one time, the odds are high that they will do it again – and push for more time or more leeway later on. They may also tend to realize that since you didn’t enforce one provision of the lease that you’ll be willing to overlook other violations, as well. You can avoid boundary-testing tenants by properly explaining your expectations in your lease documents and then sticking to them.
If the issue becomes a worst-case scenario and you think you need to evict a tenant, accepting a partial rent payment can cause serious chaos in the eviction process. In some states, accepting even one dollar of rent payment from a tenant after you’ve started an eviction will fully void the process. You will not only have to start the actual 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 process is going to become increasingly difficult for everyone the longer it goes on.
Navigating Partial Payments
Mercifully, there are proactive things that can be done to eliminate some of the widely known risks incorporated with partial rent payments. Among them are:
- Setting Clear Expectations. Specify your rent payment policy in your lease documents, such as your policy on partial rent payments. This can help you clearly communicate your expectations to your tenant and reduce the possibilities that they will try to make a partial payment whatsoever.
- 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 exactly describes the terms of your accepting their partial payment, along with any appropriate late charges. Bear in mind to mention the consequences of any extra requests or failure to pay the rest of the past-due rent as agreed.
- Accept Multiple Forms of Payment. If your tenant comes up low on cash, one technique that you could avoid partial payments is to permit them to make their rent payment with a credit card or another payment procedure. Many modern payment methods deliver instant transfers and might give your tenant an added level of convenience in a pinch. Just keep in mind not to accept a personal check, specifically 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 shoulders the bank charges.
Knowing how to control partial rent payments is just one modest part of successfully managing rental properties. It’s a serious responsibility and not one for the faint-hearted. However, if you would want to reclaim your time and devote it to doing other pursuits, why not hire Real Property Management Meridian to handle the day-to-day tasks your properties need? Our Keller property managers will work directly with your tenants to ensure that things are done professionally, legally, and efficiently, providing you time and overall 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.