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Our Thoughts on Partial Rent Payments

Overdue Rental Payment Notice with KeysAs a St. George rental property owner, you’re bound to have a tenant ask if they can make a partial rent payment. While you may be enticed to accept it, assuming that something is better than nothing, the certainty is that accepting even one partial rent payment can lead to several other issues down the road. While there are options to accept a partial rent payment and prevent the risks involved with it, for most landlords, the best option in many cases is to take a firm stand and insist that your tenant pay their rent in full. In what follows, we’ll review why accepting partial rent payments can be so problematic and how to efficiently handle this tough issue.

Late Fee Disputes

Tenants may assume they can evade being charged late fees or other penalties listed in their lease by paying a partial rent payment. Nevertheless, anything less than a full payment should still be subject to the same penalties that would transpire if no payment was made. Some tenants prefer late fees and may object or be reluctant to pay. If your tenant intends to challenge that late fee in court, there’s a strong possibility 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 exposes you to the possibility of a discrimination lawsuit. Federal Fair Housing laws are made 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 discover 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.

Maintaining Boundaries

If you’ve ever heard the saying, “give them an inch, and they’ll take a mile,” you realize how stressful it can be to re-establish strong boundaries with some tenants after making an exception to the rule. If you let your tenant make a late or partial payment without penalty one time, there is a good chance that they’ll do it again – and demand for more time or more leeway after that time. They may also begin assuming that since you didn’t enforce one provision of the lease that you’ll be likely to disregard other violations, as well. You can avoid boundary-testing tenants by explicitly stating your expectations in your lease documents and then following them.

Eviction Delays

If the problem becomes a worst-case scenario and you need to evict a tenant, accepting a partial rent payment can make a serious headache of the eviction process. In certain states, accepting even one dollar of rent payment from a tenant after you’ve started an eviction will void the process entirely. Not only will you have to start the entire 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 certainly deteriorate, the overall situation is expected to become increasingly difficult for everyone as time passes.

Navigating Partial Payments

Thank goodness there are proactive things you can do to eliminate some of the most common risks connected with partial rent payments. These are some examples:

  • Setting Clear Expectations. Indicate your rent payment policy in your lease documents, incorporating your policy on partial rent payments. This can help you clearly communicate your expectations to your tenant and lower the likelihood that they will attempt to make a partial payment at all.
  • Get it in Writing. If you agree 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 primarily describes the terms of your accepting their partial payment, as well as any relevant late charges. Keep in mind to spell out the consequences of any supplementary 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 that you could avoid partial payments is to allow them to make their rent payment with a credit card or another means of payment. Numerous latest payment methods provide instant transfers and can give your tenant an extra level of convenience in a pinch. Just keep in mind not to accept a personal check, particularly a post-dated one. Other tenants will try to “float” a bad check to buy time, but if the check bounces, you’ll end up being the one who gets hit with bank charges.

 

Knowing how to deal with partial rent payments is just one feature of successfully managing rental properties. It’s a huge undertaking and not for those that are hesitant. But if you prefer to reclaim your time and spend it doing other interests, why not hire Real Property Management Southern Utah to handle the day-to-day tasks your properties need? Our St. George property managers will engage directly with your tenants to ensure that things are done professionally, legally, and efficiently, lending 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.