Accepting Partial Rent Payments

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For many new landlords, everything goes well at first. Rent is paid in full, on time, and they really don’t hear much from their tenants. The first few months are like wedding bliss. Just a few short months into a 12 month lease the landlord starts getting calls from the tenants with excuses as to why they are going to have problems meeting their rent obligation. All of a sudden rent is not received on time and the problems begin.

Once the rent payment was late the landlord served the tenants with a legal Notice of Nonpayment of Rent. The tenants asked the landlord to accept their rent on a weekly basis until they could get their financial situation in order. The owner reluctantly agreed and that seemed to be OK for a few months. The tenants are falling behind again and currently owe the landlord more than one month’s rent. To make things worse, the landlord is having trouble reaching the tenants and thinks they are avoiding him so they won’t be able to serve the required legal notice. The landlord thinks they are being duped and wonders if they ever should have accepted partial payments in the first place.

This is an example of a problem that many landlords face every month. Occasionally, you’ll encounter a tenant who won’t be able to pay the full rent on time. The tenant may offer to pay a portion of the rent that is due with a promise to catch up as the month proceeds. Your written rental collection policy should not allow partial payments of rent, and deviating from this policy is generally not a good idea. However, in some instances, allowing for partial rent payments may make sense. If your tenant has had an excellent rental payment history and you can verify that this will be a one-time situation, then you are probably safe in accepting a partial rent payment. Of course, you need to be careful and watch for the tenant who is delaying the inevitable and stalling you from pursuing your legal options.

If you do accept a partial payment, prepare the proper legal rent demand Notice of Nonpayment of Rent or draw up a written notice outlining the terms of your one-time acceptance of the partial rent payment, including late charges. Then give the legal rent-demand notice or written agreement when the tenant gives you the partial payment. This way, you can be sure that the tenant understands your terms. The best policy is to put everything in writing so that it is clearly understood by both parties.

In most areas, the acceptance of a partial payment will void any prior legal notices for nonpayment of rent. If your tenant is causing trouble besides the delinquent rent, do not accept any partial payments or you will have to begin the eviction proceedings from scratch — and you can be sure that they will be difficult to serve again.

When a tenant is behind in rent, any rental payments made by the tenant should always be applied to the oldest outstanding past-due rent amount even if the tenant tries to indicate the payment is for a different time period. Be sure to apply your rent-collection policies, including your late charges, partial payment and returned check policies, consistently with all tenants. If you are a landlord and dealing with this issue or any other issue is more than you can handle, please consult with your local property management company.

Kent Forsythe Licensed California Broker
Member of California Assoc. of Realtors,
National Assoc. of Realtors, Owner of
Superior Property Management. Contact Kent
@ kforsythe@superiorpropmgmt.com
(877) 308-7368

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