Tenant paying 2 months rent in advance. Should I accept it?

Question

My tenant in l sent rent payments for August and September in advance (he made the payment on July 26 and the August rent wasn't due until July 31 and September rent isn't due until August 31). Reasons he stated are not rational (something about his bank systems getting hacked and he wanted to get the payment out to me asap)

He has been a problem tenant in the past threatening to lawyer up on trivial issues. Should I be accepting this rent in advance? His lease ends in February 2022 and I don't plan on renewing it. Please advise.

Adam Martin · Answer

I’m assuming he did this on purpose or was this an accident and he wants a refund.  Assuming he is telling the truth and he did it in advance due to issues at the bank I see no issues and seems pretty reasonable to me.  He could also have just came into some money and wanted to get ahead on some bills which also sounds reasonable to me.  If he says it was an accident and wants a payment back sounds fine as well.  Let it clear and send the additional payment back to him.

Michele Fischer · Answer

It doesn't seem logical to us for people to pay in advance, but for people that don't manage money well it comes up with some frequency.  Agree with others that the upsides are more than the downsides, take the money.  Let them pay when they have the funds rather than gambling that they will still have it when due.  By accepting the funds you cannot evict for non payment, which is why many recommend not taking partial rent payments, but there seem to be other issues making this a less than ideal tenant.  Not that many ideal tenants exist.

Account Closed · Answer

Yes. There is no reason to refuse the money. We have tenants who pay 6 months and even a year in advance. I don't see any problem with taking advance rent payments with the exception that you should not take payments for months you decide to terminate the tenant's tenancy.

As for him being a 'problem tenant' that is another issue that landlords always discuss in regards to whether or not to keep the tenant. We have several fairly large apartment buildings and we have tenants who constantly send us letters that threaten to file complaints with housing authorities for stupid things like they think we are being discriminatory because my wife is Filipina and when we rent to Filipinos they think we give Filipinos special privileges like allowing the Filipinos to do maintenance work on their vehicles.

We get all sorts of threats like some tenants threaten to sue because we don't have surveillance cameras. I don't know the details about your 'problem tenant', but sometimes it is the landlords fault when the tenants allow the landlord to make the problems a 'personal conflict' meaning maybe you need to re-assess the situation and remove the 'personal' thoughts and re-assess the situation from only the philosophies that apply to running your business within the laws that apply to real estate. If the tenant is clean, quiet and pays the rent those are the most important assets and factors. If the tenant is blowing off only some steam and you have the ability to communicate with the tenant to defuse him then use diplomacy to build a better relationship.

What I am trying to say is; when the treats are only the result of tenants blowing off some steam and the threats don't apply to any situation where you are actually violating real estate laws, then take their threat with a grain of salt, send the tenants a letter stating that if they have any issues that violate any laws or rights then the tell the tenants you are willing to address any valid situation they claim.

I evicted many tenants for looking at me cross-eyed (so-to-speak) at me and there was a few times I evicted tenants I shot myself in the foot because it took me 6 months to find a new tenant and I lost about $8,000. I evicted one tenant because he lived in a studio apartment and he brought in a girlfriend and a small dog. The tenant paid his rent on-time, but he had a serious bad attitude when he spoke to my wife about the dog and his girlfriend. He got into my wife's face and she weighs only 92 pounds. After we evicted that tenant he called my wife two times and apologized for getting in her face.

I have a tenant who has been in one of our buildings since I purchase the property in 2003 and he is some sort of undercover for the Air Force. He pays his rent in advance for the entire year, every year. My wife works at the building every day watering plants and cleaning and we saw this tenant only one time back in about 2003 when we remodeled his apartment.

When you take money in advance you need to have a good accounting system where you manage the money properly so you don't get caught not having enough money to pay the mortgage.

I'm currently sending the 3rd and 4th of my children to college in other states the end of this week. What I am doing and what I always did in the past is I write their landlords post-dated checks for every month for the entire years and I send the checks to their landlords. That way, I don't have to worry every month about getting the rent payments to their landlords on-time and I never had a problem.

Joe Splitrock · Answer

I have had tenants that occasionally pay in advance a month or two. Often it is a situation where they have the money and just want to get rent paid so they don't have to worry about it. In your situation I can't see a down side or reason to think they are up to no good. I would give him notice of non renewal a couple months ahead of time when his lease ends to avoid him making advance payments past his lease.

Ian Walsh · Answer

I have never had an issue accepting rent payments in advance.

Heidi M. · Answer

@Bob Drew I have a tenant that always pays a month in advance

Joe S. · Answer

I would take it and they would be a month ahead. I’m not sure what the issue is.

Nathan Gesner · Answer

It shouldn't be a problem. It's not extending his lease in any way. As long as the money clears, there should be no problems. He's probably just trying to get ahead. If he asks for some of it back, then I would start to be concerned about a scam of some sort.

Mark Cruse · Answer

Unless there is some scam or fuzzy stuff I'm having trouble understanding why this is an issue. People get upset when they don't get paid. I have no idea what the negative aspect is of getting the money early and why anyone would reject that.

Scott M. · Answer

Yes, accept it but keep in mind it isn't yours until it is due. He paid both on July 26th so this is prepaid rent and should be kept in your escrow account until each month comes due.  He could ask for it back and you need to give it to him if it is before the due date.  And since he has been a problem this may be another way he is trying to be a problem.  July 31 August rent is yours and September is still prepaid (his money but in your possession) until Aug 31st.

Tenant paying 2 months rent in advance. Should I accept it?

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