Pre-paid rent with post-dated check. When can I deposit it?

24 Replies

HI there,

I have a tenant who unexpectedly sent me the next three rent payments with post dated checks. Apparently she will be traveling a lot and didn't want to forget to pay.

I have asked her to clarify her intent, but I was wondering if I'm obligated not to deposit them right away. It would be easier to do that so I can't lose them, but I could see how that might not be legal.

Thanks for any advice,

Dan

yes, you can deposit them but chances are they won't clear. It is not because the bank won't cash them , they will and I have done this with no problem with the bank. The issue is if she post-dated them there is probably no money behind them until the date they are dated. So she probably gets money into her account periodically and these checks would be drawn against say an SSI payment that is made monthly. You really shouldn't post-date a check.

Your bank should Not cash/accept them til after the date on the check. It's sort of a silly question, as her intent could not possibly be more clear.....the checks are good upon the date of the check.

@Wayne Brooks , you make a good point. I could call my bank and ask whether they would even accept them as a deposit. If they say no, then that's that.

@Colleen F. , I have reason to believe there is enough money to cover them, but I could be wrong.

Thanks for the replies so far.

Originally posted by @Dan N. :

I have reason to believe there is enough money to cover them, but I could be wrong.

Not sure why this is relevant - she sent you post dated checks which means she does not want you to cash/deposit them all at once. Your bank should not let you deposit them until after the date. Even if they do allow it, if she wanted to pay you all of that money at once she would have written one check.

Why not just store them somewhere safe until after the date on the check?

United States[edit]

In the United States, national banks are permitted to pay checks even though payment occurs prior to the date of the check. According to the Comptroller of the Currency: "A check is a negotiable instrument—the payee, the person to whom the check is written, may negotiate it through the banking system at any time" and check writers seeking redress must restrict themselves to pursuing the payee.[16]

Nonetheless, if "the customer has given notice to the bank of the postdating describing the check with reasonable certainty" the Uniform Commercial Code requires that the notice to be honored.[17] In practice, whether the check writer has any redress against the financial institution where the payee deposited the check may depend on whether it can be shown that the check was accepted over the counter without examination.[

Dan, your tenant was being responsible by sending you the three postdated checks ahead of time. From looking into the situation, I infer that she doesn't want you to cash them all at once. She was responsible, now be responsible and don't lose the checks. Put them in your underwear drawer.

Just saying that the bank will cash them ,they are negotiable. Depending on state law to post date a check may not be legal. Some states have laws which address the issue , some may not. However if you present a check for deposit dated the 1st and it is 29th it is negotiable. I have many times deposited this type of check(from quirky family). Usually not months in advance. I would assume the money isn't there months in advance.

I would advise depositing them on the dates as written. If it doesn't work for you in the future you can advise her that electronic payment by check can be set up to arrive to you on time and she can do that several months in advance.

@Dan N.

Many banks here provide a deposit service for postdated cheques: you take all the post-dated cheques into the bank and they will hold them, depositing each one as it comes to date.

You could check with your bank to see if they provide such a service.

It is annoying. If you go to the teller they won't accept it. If you go to the ATM it will. But like people mentioned the reason they are post dated is so you won't cash them before that posted date.

If you like you could send them back and simply tell her you don't accept post dated checks, or you could do what I have done and just hold them until the 1st.

I would be happy to hold the check. Sounds like you have a good tenant who is responsible. This is not like getting the check on the 1st post dated to the 5th or 10th when their check comes in.

As usual, solutions come before I post. But do not get those checks near a bank to hold for you, they won't take that responsibility if some employee sees them and shoots them off to the proof department. Hold them or send them back.

Mathew is correct. A draft may be presented for demand regardless of the date.

Clearly, your tenant dated the checks with the intent of paying on those dates, otherwise she would have written one check for all the rents.

I doubt you're that concerned with safekeeping of the checks as much as having an opportunity to grab all the money today, I mean really!

If you cause her to have overdrafts by depositing all the checks I'm betting you'll be paying here what could be a ton of overdraft charges on all other checks written. If she is traveling and you cause other damages, like not being able to pay a motel bill, she ought to come after you with guns blazing, IMO. You'll be responsible.

Clearly the intent has been demonstrated. While you can deposit all the checks, accepting the checks implies that you agreed with the arrangement.

If you don't agree, return the checks and ask her to mail them. Tell her you don't accept post/pre dated checks due to liability......that is if you can't do a small favor for an obviously trusting tenant.

Mathew's post caught my eye with the link, I didn't read others so this might be duplicating what others have said.

Really, you're afraid you'll lose them, I'm not that naïve. You don't have a cash box, a safe, a hiding spot in your home, a locked drawer, no place you could put them for safekeeping? That's really hard to believe!

I suggest you have a "Come To Jesus" meeting with yourself addressing your greed in even thinking of cashing all the checks at once. :(

Had a CD mature from a credit union and went to collect on a Saturday. They gave me a cashier's check dated for the following Monday which I did not notice. Went to BA and tried to deposit it into my checking and they refused it. It was too large to put into the ATM.

Originally posted by @Jeff S.:
Had a CD mature from a credit union and went to collect on a Saturday. They gave me a cashier's check dated for the following Monday which I did not notice. Went to BA and tried to deposit it into my checking and they refused it. It was too large to put into the ATM.

And you think certified funds on a bank's account is the same thing as a DDA? Try an insurance company. LOL

Originally posted by @Bill Gulley :
As usual, solutions come before I post. But do not get those checks near a bank to hold for you, they won't take that responsibility if some employee sees them and shoots them off to the proof department. Hold them or send them back.

Bill:

Normally, I too hold a similarly low opinion of banks, but the post-dated deposit service offered by our bank has been superb.

On one occasion we did have a tenants cheque prematurely forwarded for clearing. The bank very quickly took ownership of the error and made both the tenant and ourselves whole.

Dan it sounds like you have a good tenant. If she has sent her rents, post dated, why would you even consider depositing them before each due date? Why would it even be a question to potentially harm and overdraw a good tenant?

I don't understand the logic. You'd get the rents on time if she wasn't travelling, and she's arraigned for you to get paid, on time while traveling as she wants to enjoy life, but still fulfill her obligations and not worry she has done the wrong thing....and then BAM! Would you want somebody to due this to you?

Originally posted by @Todd Trader :
Dan it sounds like you have a good tenant. If she has sent her rents, post dated, why would you even consider depositing them before each due date? Why would it even be a question to potentially harm and overdraw a good tenant?

I don't understand the logic. You'd get the rents on time if she wasn't travelling, and she's arraigned for you to get paid, on time while traveling as she wants to enjoy life, but still fulfill her obligations and not worry she has done the wrong thing....and then BAM! Would you want somebody to due this to you?

Todd, really guessing that this thread was started out of a sense of urgency to post something and the OP couldn't or didn't give much thought to the negative reflection on his integrity or intelligence, I can't help thinking he knows better but just wanted to post about getting the rent checks. A 14 year old would realize what the tenant's intent was and would know they were pulling a sneaky stunt by depositing all of the checks.

Many get excited about posting and don't engage common sense. I'm sure he knows better, at least I hope so. :)

Dan, Just wanted to add another idea. I do not accept post-dated checks, but I would tell the tenant that if she is traveling, she can give me separate checks all dated today, and she could trust that I will only deposit one each month. We used to run a family business, and my dad would actually say, "What if you die tomorrow? The bank might not pay it. Write it with today's date, and I'll hold it until ..." Most people had no problem with that. With today's online banking and with recurring payments so easy to set up these days, it shouldn't really be an issue anymore, anyway.

@Todd Trader , honestly my first thought was that the three separate checks were dated to indicate which month the rents were intended to cover, not necessarily when they were intended to be deposited. Of course, on reflection, it makes sense that the intention was likely intended date of deposit and as I indicated above, that is how I plan to proceed at this point. The tenant has since explicitly confirmed her intent to me as well and I intend to honor that.

As @Bill Gulley indicated, I perhaps did not think my question through carefully enough before posting.

As a relatively new landlord, I was posting to gain perspective and to bounce my ideas off of a more experienced community for a situation I hadn't run into.

In fact, this tenant pre-paid me the first six months of rent, deposit, and fees in a single check. I did not mention this in my initial post but it did perhaps color my thinking.

Todd, your reminder for us all to treat others as we would like to be treated is a good one.

Thanks for your advice,

Dan

Hi @Dan N. ,

When I receive post dated rent checks I do not cash them until they are "earned". By earned I mean until the date they are due. So, today for instance, if I receive a rent check for 6/1/2014 I will not cash it until 6/1.

Originally posted by @Gregory Rice :
Hi @Dan N. ,

When I receive post dated rent checks I do not cash them until they are "earned". By earned I mean until the date they are due. So, today for instance, if I receive a rent check for 6/1/2014 I will not cash it until 6/1.

And after all of the long philosophical back and forth about the intent of the tenant and landlord, etc, etc, isn't this really the essence of it?

To get a bit philosophical this is a great example of how government, regulators, big banks etc. make thing difficult just for the sake of making things complicated.

If you could not cash a check that was posted dated, or the bank had to hold a deposited check until the date, there would be no issue here.

Also what an eloquently simple solution to making sure you get a payment to someone on time without having to worry about the funds being available when you send the check. Now people have to worry if someone gets a check on the 27th for a bill dated the 1st and they don't get paid until the 30th that it could bounce. Of course most people will assume that by postdating it they won't have an issue since common sense says you should not be able to cash it.

Luckily most people will honor that intent, just apparently not the jackholes that make up the rules.

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