What to do when a tenant offers partial payment

Question

What do I do if my tenant offers partial rent payment? The say they will be able to pay the remaining balance on their next payday? Do I accept it? I've heard that accepting partial payment makes it harder to win an eviction case. How do others handle this situation? I'm investing in Upstate New York.

John Warren · Answer

@Joseph W Lennon the answer to this question is a little more nuanced than some. How long have you had the tenant in place for? What is your relationship like with the tenant? Did the tenant communicate in a timely fashion that there would be an issue, or were you chasing the tenant for information?

I self manage 13 units locally in Berwyn and Lyons, IL. I have two tenants who occasionally have contacted me that they are a little short on the rent. They have consistently followed through with catching up, so I am willing to work with them. In addition, they have always paid my $50 late fee, which compensates me for allowing this behavior temporarily. You should always charge a late fee ( I give all tenants one "free pass" and then charge late fees). This is part of the tenant good behavior training process.

If your tenant pays late every month, and you are getting more than 30 days behind then you may have a problem. I also have a tenant in one of my lower end rentals that consistently pays almost one month late. She is behind now more than one month, and I am having to watch my property manager on this one to make sure it doesn't get worse.

Joe Villeneuve · Answer

Simple.  Let them live there part of the month.

Actually, I don't accept it.  Once you do, you have established it is OK to do it...and you will see it happening more often.  They will see something else they would rather do with the money, do that, and figure it's OK since you accept partial payment.

Patti Robertson · Answer

Depends on your state I guess.  In VA we take every penny we can get as soon as we can get it.  We have one small requirement to notify the tenant that if they are in default, any payment we receive will be “received with reservation.”  Our laws just changed to say that we just have to do that in our 5 day letter, and not with every payment.  We can accept funds right up to the actual eviction and the Sherriff will still evict, because we won the right to evict because the tenant violated their lease, not because they owe us money.

Thankful to be landlording in the state of VA! I feel for you guys in more tenant friendly states.

Robert Gilstrap · Answer

The answer really depends on your states landlord tenant laws and how that affects your ability to evict after acceptance of a partial payment. Many states do not allow filing in the month that you accept a partial payment because the law basically sees that as accord and satisfaction for that rental period. Your lease language also plays a big role here and should explicitly spell out how/if that can be accepted.

Forgetting about what the law says it's the mark of an inexperienced landlord to accept less than the agreed amount and it's sets a terrible precedent.  Did you or did you not agree to an amount in the lease? The tenant certainly expects you to hold up your end of the agreement, why in the world would you even consider not requiring them to do the same? Certainly not knocking  what the RE agent Sam said here from California about people having hardships and maybe their car broke down but are you kidding me?!  Why is any of that your problem? Can you stop making repairs to the property if your car breaks down or you have reduced working hours? Of course not. This is a business and unless you want to learn some REALLY expensive and painful lessons you better start treating it like one (no judgement just tough love).

Sam Shueh · Answer

You should consider taking all you can get. There is hardship, pay day next week, reduced working hours, some one is sick, car broke down. Many renters live on pay check to pay check.  That includes many American home owners as well.

NEW YORK STATE IS BROKE

Randi Plevy · Answer

It only becomes more difficult to evict if you are in the middle of an eviction proceeding and then you accept a partial payment.

What to do when a tenant offers partial payment

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