Trouble with money oder for rent.

[Peter Crabtree]

Hi BP, I need a little guidance. I have my tenants mail their rent to a PO box. My rule is that as long as it is post marked by the 5th it isn't charged a late fee. I have a tenant who has lived in one of my units for 4 months now and has always been prompt on his payments. He pays via money orders (I assume he doesn't want or have a checking account). I have not yet received his rent for September. He said he mailed it on the 1st and has a receipt for the money order. Obviously if it got lost in the mail, that money is gone. My question is this: how do I handle the situation in a way that is fair, but also guides him toward a more responsible way of paying rent. I am trying to run a business, but I never want to put my profits above ethics. It would hurt for me to just eat the loss but I know it would be much more devastating for him to have to come up with another month's rent. Also, if it went as far as eviction, he can prove that he purchased the money order (which can then be made out to anyone) but I cannot prove that I didn't get and cash it. Sorry this is so long-winded. Thanks in advance for any wisdom you guys have to offer. -Peter

[Jon Holdman]

For one, your requirement should be that you receive it by the due date, not that its postmarked.  That eliminates the ambiguity in this situation.  You didn't get it, its late, tenant pays late fees.  Your mortgage company, credit card companies, utilities and pretty much everyone except the IRS have long ago moved away from postmark dates.

Second, get away from mailing rent at all.  Sign up for one of the various electronic collection processes.  Some of these allow money to be "sent" at local stores.  Some, like "Chase quick pay" work with bank accounts.

If he really has the money order receipt, he can use that to find out what happened.  Hopefully, he gets his money returned.  In any case, you should not just eat the lost rent.  You didn't get your rent.