Originally posted by @Rich N.:
Originally posted by @Frank Chin:
I've done rentals for 35+ years and have on several occasions offered a full years rent up front. On most of them, I declined because if you have an NOO mortgage, there is a clause that restricts me from collecting more than 3 months rent up front.
I did accept it in one case, sorta, a group of nuns from a religious order wanted the apartment. I vetted them and they explained all their expenses, food, clothes, rent is paid by the payable department of the religious order, but they cannot guaranty the payable department will process it on time and get the rent to us on the first, each and every month.
What I suggested is to have their payable department issue 12 post dated checks which they agreed. When they got the post dated checks though, they suggested we hold on to it, and remember to bring it to the bank every month, as their payable office normally handle such things, and they rather have us remember it's the 1st of the month every month, instead of them.
Follow the logic?
Now I understand the nun's issue when after getting the post dated checks, we misplaced a bunch at one time during the year, and deposited a check dated Sept 1 on Aug 1. When it was all said and done, we figured it was easier if we deposited one check in the beginning.
There are other cases where I got such requests, though unusual, but not a red flag in all cases.
I thought post dated check were illegal or is that just my lovely state of MA again ?
Glad you asked.
When we made the mistake, deposited the Sept 1 check on August 1st, called our banker, and she said it's no problem. What it means is the date is irrelevant, it could be dated a year ahead, and I am still legally allowed to deposit it. Since I still had a bunch of posted dated checks from the tenant, I recall for another six months, she said I can deposit it all and I'm OK. And the tenant is not in violation of any law either. All it means is a check written to me and signed is good on the date it's given to me, regardless of date of check, and I can legally deposit it.
At least, that's the law in NY as explained to me.
The way the nuns explain it to me, if I really want to get checks monthly, and if I believe post dated checks are illegal, then I'm welcome to call and follow up their account payable department monthly, and dun them for payment, and then late fees. They admitted their AP department is not always on the ball. They explain as members of the order, they turn all their income in and the order pays the bills, so all that happens is if I call the tenant for rent, they'll have to call the AP department, so late payments and late fees are not their headache but mine.
Of course, if I complain about late rent payments, they would tell me it's all my fault as they offered me an easy way.
I had a good W2 job at the time, work long hours, doing REI on the side, and I am not forward to following up any AP department for payment every month.
