When is Your Tenant’s Rent Really Due?
It seems like an easy enough question: when is the rent due? Is it the 1st of the month, but your tenants know you’ll accept it on the 3rd? Do you routinely offer a 5-day grace period? Is the rent due in full or will you accept half when your tenant gets paid on the 1st and the other half when she gets paid on the 15th? Or is rent due for some tenants on the 1 1st and others on the 10th of the month?
If you have more than one tenant, any of the above scenarios could become a nightmare to manage. Life doesn’t have to be complicated—nor does your rental property business. When it comes to collecting rent, applying the K.I.S.S. principle (Keep It Simple, Silly) is a good idea!
While a landlord and tenant can agree to any sort of rent schedule, most experienced landlords recommend having the full amount of rent due on the 1st of the month. Accepting half or partial payments can be a problem. Not only does the practice create more work, paperwork, banking, and hassle for you, it could come back to bite you.
How? If a tenant stops paying rent on time and you start eviction proceedings, accepting subsequent partial payments can throw the case out of court. A history of accepting a tenant’s rent in smaller chunks rather than in full could create a confusing situation for everyone. Your tenant could claim they were planning on paying the rest of the rent later, just like they always do.
And what about grace periods? Sure, most landlords allow a little wiggle room—usually a few days. But most would agree it’s best to not wiggle to your own detriment. Giving tenants the ability to pay after the due date encourages late payments. If there is no consequence, why pay on time? To combat this behavior, consider adding a late fee for rent paid after the 3rd of the month.
(Note that some states have laws requiring grace periods; check your local and state guidelines thoroughly.)
Finally, make sure your lease agreement contains specific language regarding rent due dates and that you have the right to refuse rent payments after any legal demand notices expire. This will allow you to move toward eviction when the need arises.