As a Plymouth rental property owner, you may expect a tenant to inquire if they can make a partial rent payment sooner or later. While you may be tempted to accept it, considering that something is better than nothing, the actuality is that accepting even one partial rent payment can give rise to several issues in the end. While there are strategies to accept a partial rent payment and reducing the risks that come with it, for many landlords, the better method in most cases is to take a firm stand and insist that your tenant pay their rent in full. In this article, we’ll analyze why accepting partial rent payments can be so problematic and how to deal with this challenging situation successfully.
Late Fee Disputes
Tenants may imagine that they can avoid being charged late fees or other penalties specified in their lease by making a partial rent payment. Nonetheless, anything less than a full payment should still be subject to the same penalties that would transpire if no payment was completed. Several tenants don’t like late fees and may protest or refuse to pay. If your tenant must decide to challenge that late fee in court, there’s a strong possibility the judge will side with your tenant regardless of what your lease is listed.
Fair Housing Laws
Accepting partial rent payments from one tenant but not another also raises the risk of a discrimination lawsuit. Federal Fair Housing laws are intended 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 figure out that you allowed a different tenant to do so, they could argue in court that you’ve discriminated against them. Regardless of whether you excellently 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 difficult it can be to re-establish clear boundaries with certain 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 high possibility that they will do it again – and push for more time or more leeway in the future. They may also begin to assume that since you didn’t enforce one provision of the lease that you’ll be willing to skip other violations, as well. You can prevent boundary-testing tenants by thoroughly stating your expectations in your lease documents and then obeying them.
If the condition becomes a worst-case scenario and you need to evict a tenant, accepting a partial rent payment can make the eviction process a headache. 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 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 inevitably deteriorate, the whole situation will probably become increasingly difficult for everyone the more it proceeds.
Navigating Partial Payments
Happily, there are proactive things you may do to mitigate some of the most prevalent risks related to partial rent payments. These contain:
- Setting Clear Expectations. Indicate your rent payment policy in your lease documents, particularly your policy on partial rent payments. This can help you clearly communicate your expectations to your tenant and diminish the probability that they will attempt to make a partial payment at all.
- Get it in Writing. If you do select 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 particularly describes the terms of your accepting their partial payment, along with any applicable late charges. Don’t forget to state 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 runs out of cash, one way to avoid partial payments is to permit them to settle their rent payment with a credit card or another means of payment. Several new payment methods propose instant transfers and can provide your tenant some extra convenience if essential. Just keep in mind not to accept a personal check, exclusively a post-dated one. Other tenants will try to “float” a bad check to buy time; you’ll end up being the one who gets hit with bank charges.
Figuring out how to control partial rent payments is just one little part of successfully managing rental properties. It’s a big task and not one for the faint-hearted. However, if you would like to reclaim your time and commit to doing other things, why not hire Real Property Management Viking to handle the day-to-day tasks your properties need? Our Plymouth property managers will work 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.