As a Marble Falls rental property owner, at some point you’ll have a tenant ask whether they can make a partial rent payment. While you might be tempted to accept it, thinking that something is better than nothing, the truth is that accepting even one partial rent payment may prompt a lot of issues in the long run. Although there are methods to accept a partial rent payment and lessen the risks that come with it, for many landlords, the proper approach in most situations is to take a firm stand and insist that your tenant pay their rent in full. In this article, we will bring up why accepting partial rent payments can be so problematic and how to appropriately deal with this complex problem.
Late Fee Disputes
Tenants may think they can escape being charged late fees or other penalties stated 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 occur if no payment was made. Several tenants don’t like late fees and may protest or decline to pay. If your tenant agrees to challenge that late fee in court, the odds are high that the judge will side with your tenant irrespective of what your lease says.
Fair Housing Laws
Accepting partial rent payments from one tenant but not another elevates the risk of running headlong into a discrimination lawsuit. Federal Fair Housing laws are planned to protect tenants in certain protected classes from being treated unfairly by landlords. If you deny a tenant’s request to make a partial rent payment, and they discover 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 well, 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 recognize how daunting it can be to re-establish clear boundaries with some tenants after making an exception to the rule. If you allow your tenant to make a late or partial payment without penalty one time, there is a high possibility that they will do it again – and ask for more time or more leeway after that. They may also start thinking that since you didn’t enforce one provision of the lease, you will be willing to set aside other violations as well. You can avoid boundary-testing tenants by thoroughly expressing your expectations in your lease documents and then sticking to them.
In case the situation turns into a worst-case scenario, and you decide to evict a tenant, accepting a partial rent payment might result in a real mess about the eviction process. In some states, accepting even one dollar of rent payment from a tenant after you’ve started an eviction will void the process totally. Not only will you have to start the whole eviction process over again from the very beginning, but you will be trapped, unable to collect back rent payments while the eviction process takes its course. As relations with your tenant will inescapably deteriorate, the entire situation becomes increasingly difficult for everyone the longer it continues.
Navigating Partial Payments
Providentially, there are proactive things you can conduct to avoid some of the most typical risks tied with partial rent payments. As an example:
- Setting Clear Expectations. Detail your rent payment policy in your lease documents, particularly your policy on partial rent payments. This can help you properly communicate your expectations to your tenant and preventing the incidence that they will try to make a partial payment at all.
- Get it in Writing. If you 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 accurately describes the terms of your accepting their partial payment, along with any essential late charges. It is important to discuss 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 is unable to pay cash, one method to avoid partial payments is to allow them to make their rent payment with a credit card or another kind of payment. A few payment methods offer instant transfers and can give your tenant a little extra convenience in a pinch. Just ensure not to accept a personal check, even a post-dated one. Some tenants will attempt 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.
Determining how to manage partial rent payments is only a tiny portion of successfully managing rental properties. It’s a significant task and not one for the faint-hearted. But if you would like to reclaim your time and spend it doing other things, why not hire Real Property Management Highland to handle the day-to-day tasks your properties need? Our Marble Falls property managers will interact directly with your tenants to ensure that things are done professionally, legally, and efficiently, lending your 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.