Tenant paid most, not all rent

[Stephanie Preasha]

I have a situation where a long-term tenant paid all but $275 in the rent (total rent is $1775).  My lease states he will be charged $25 each day not paid but does not specify anything about partial payments.  I did let him know he has at least one day of late fees and he states he will get to me ASAP.  I wouldn't have accepted, however, my tenants pay through Venmo app so I received it whether or not, I accept partial payments.

The last time I spoke to him, he stated he was incapacitated but we did not get into details.  Now his phone goes straight to voicemail.  

What is your procedure for partial payments? I do not want to change utilizing Venmo app as way I received rents because of this.  I will need to add a new clause in lease for this scenario.

[Randall Alan]

@Stephanie Preasha

This is often a paycheck to paycheck issue.  The hard facts of life are that people have to also be able to buy food, etc, and if something upsets the budget, they will short rent first.   Think blew a tire, had to go to the ER, etc.  Rent is high on most people’s list, but there are things that supersede.  

We limit our late fee to 10 daily fees.  In all reality this will probably resolve within 2 weeks when the person gets paid again.  

There is what the lease says, then there is trying to work with the tenant.  Like, if this has never happened before and it is truly a one off situation we would probably cut the tenant some slack.  If they paid the vast majority of the rent on time, we would usually prorate our late fees to show an effort to work with the tenant.  We obviously don’t have to, but it is just sort of the kind thing to do to a tenant that has otherwise always paid on time.  We don’t see late fees as a profit center for our business.  They are there for punishment / threat purposes to create a penalty for being late.  

On the other hand, we have tenants that are late EVERY single month.  They have not earned that grace / respect and we stick to what our contract states…. Plus threaten 3 day late notices much much sooner than we ever would on a one off situation.

What you want to avoid is having the situation start to stack up.  We got caught being too nice once, and it was a slippery slope of, “didn’t pay $275 the first month, then that rolled into the next month then they were $600 behind.  Next thing you know it’s a month an a half of rent owed in arrears.  So be sure to consider that situation and establish some boundaries to the ‘working with your tenant’ approach if you decide to go that way.

Hope it helps!

Randy