Direct deposit: is the rent late or on time?

[Ed S.]

Hello BP,

I'm thankful for such a place where I can get experienced advice.

Here's my situation. Rent is due on the first and my grace period is 3 days, so on the fourth its late. I haven't had a problem with any of my tenants direct depositing till now.

On the fourth we texted our tenant to see if everything was ok because we haven't seen a deposit. His answer was bank issues ( of course it's the banks fault) and he sent us a picture of it withdrawing from his account on the 3rd.

Shortly after contacting I noticed a pending transaction to be paid on the 8th (due to the long weekend and Labor Day). I called both banks and they basically said he initiated it on the 3rd.

The way I see it he essentially put the check in the mail on the 3rd and he's trying to say he paid within my grace period.

If it hasn't actually deposited (not pending) into my account by the 3rd but withdrew from his account on the 3rd is it late?

Thanks in advance for any help advice.

A little background, the first 2-3 payments were late as well because of direct deposit issues and I was gracious because he is military and I took his word for it figuring he was good either way.

[Steve Vaughan]

No way. Trying to charge a tenant a late fee and saying it was late because the draft was initiated on the 3rd is splitting hairs and cause for discontent.  

As a renter or consumer, I would assume a bank draft to be faster and more definite than the mail and not consider it the same.  I may inform him there are delays in the ACH system and ask him to initiate a day or 2 sooner, but I wouldn't accuse him of being late.   

As one grows in the LL business in size and experience we better learn how to choose our battles.   

For perspective, view a current posting of someone dealing with an eviction: http://www.biggerpockets.com/forums/52/topics/2273...