Receiving late rent payments.

[Mike Kostner]

I have a situation, and wonder if anyone here can help me.

I have a tenant three months behind, due to Covid-19. She has been paying for the last three months, but still owe for April-June.

My question is, should I apply any rent payments to the current month, or should I apply it to the oldest past due month (or does it even matter?

I wondering, because I filed for eviction when they first fell behind, but since courts in NJ are closed, I haven't had a hearing.

Since they're paying again, I doubt it will come to it, but I'm wondering if something like this could affect anything if it does end up it court.

To be clear, if I get a payment today, should I consider it a payment for September, or April?

Any opinions?

Thanks in advance!

[James Mc Ree]

Check your lease as it should specify this. My leases say payments are applied in the order charges are incurred and that tenants may not payments are only for a certain charge or type of charge, such as "for rent only." A clause like this keeps the tenant from avoiding late fees and other charges simply by paying the current rent.

If unspecified, I would specify it in an amendment to the lease and either ask the tenant's preference or default to whatever is most favorable to the tenant. That would probably be paying off the oldest rent first depending on your late fee policy.

It's only mattered in my situations for late charges or other tenant-responsible expenses. I can't evict for non-payment of late charges, but I can for non-payment of rent. I had a tenant who thought she wasn't going to pay late charges, so she would write on her check "for rent only". I pointed to this term and showed her that $200 of her payment went to late fees, $800 went to rent and she still owed $200 rent, which was now late. She was not amused, but got the message that she wasn't more clever than me, at least on that day.