Accept Prepay of Rent in NJ?

Question

I'm working with a couple of folks that have had credit issues. They suggested that they would prepay a certain amount of the rent.

Is this a good idea?

NJ statues state that no more than 1 and 1/2 month of security deposit is acceptable.

Thoughts?

Taylor McClung · Answer

@Peter Bemko, pre-paying rent also means if they are on a month-to-month rental agreement, however many months of rent you accepted from them usually means that is how long you have given them to stay. I wouldn't personally do this because I like having the option of keeping my tenants month-to-month should something go wrong. It is easier to end the contract with proper notice.

Bill S. · Answer

@Peter Bemko I don't know about New Jersey law but taking prepaid rent removes the easiest means of eviction (non-payment of rent). Be extra careful as the pre-paid rent crowd are often the ones that have lousy behavior after moving in. Drug dealing, property damage, and an overall disregard for the rules are a few of the things that the prepaid rent crowd are known for.

Mark Langdon · Answer

Just be careful. People who want to prepay the rent sometimes do that for a quick acceptance before you do your due diligence and you find out later they have previous tenant issues. There is nothing wrong with pre-paying rent as it is not called a security deposit. I have done that in the past for the same situation but as I mentioned be careful to really scrutinize their ability to pay after that meaning good W-2 type/paystubs income etc. Take it slow and vet them out properly with proper tenant screening.