Rent payment grace period

[Wesley W.]

Hello folks,

Okay, here's an issue I would love people to provide input on.  In our rental agreements we give a 5 day grace period before late fees and pay or quit notices are generated.  We only accept payment through a dedicated sweep account so tenants can either walk cash in to the branch, pay by check at the branch, or execute a BTB transfer.  We do not accept any form of payment made directly to us.

Our regional bank was just bought by a much larger bank, and our accounts were ported over to this new nationwide bank.  Previously, tenants who paid on the 5th at a local branch had their payment posted to our account immediately so that (a) we could see that they paid, and (b) we were given provisional credit on that money that we could use to pay for debt service, etc.

This new bank now processes payments much more slowly, and this has created the following concern illustrated in this example:

Tenant pays rent the morning of the 5th (a Saturday), but the money wasn't available to us until the 8th.  This is not as favorable as our previous bank, as we must wait this cooling off period which further extends the period where that rent money is not usable by us.

So, to those of you that have grace periods, when do you consider the rent "paid?"  The date their check is deposited (regardless of when those funds show up in your account), or when the funds are available (e.g. "if you are paying after the 3rd, payment must be in cash.")

I'm curious as how people handle this, as well as any unforeseen consequences of this new financial arrangement we have yet to experience.

Thank you in advance!

[Thomas S.]

Date check is deposited. Tenant has no knowledge of bank processing and there for is only responsible for deposition when due. That is all you care about.

Are you aware through contacting the bank as to whether the tenant deposits on the 5th or must you wait till the 8th to find out.

If you must wait then you are forced to allow a grace period of 8 days instead of 5. Must you allow a grace period or can you give notice on the 2nd of the month when payment is not received on the 1st.

I personally do not allow a grace period for those providing payment each month, as opposed to post dated checks for the year, and will give them notice on the 2nd if I have not received payment.

Unfortunately NSF checks do not show for a week so those tenants do not get notice till I am made aware of NSF.