So I'm a brand new landlord; I've had tenants in my townhouse since 1-Feb. For their 1-Mar rent payment they paid with a personal check a few days before it was due, and I just happened to hold the check and deposit it on 1-Mar.
Just yesterday (30-Mar) they gave me a check dated 1-Apr for April's rent. We never agreed that I would hold it until 1-Apr, so I immediately deposited it around 10pm on 30-Mar. I guess since we use the same bank it came out of their account the next day, before their pay checks were deposited and they were hit with overdraft charges claimed to be roughly $105. This is because multiple small transactions hit the account after it first overdrafted and the bank wants to charge for each overdrafted transaction.
So they are asking for a credit on the next months rent to cover some or potentially all of the overdraft charges. I don't believe I'm liable for any of this as it was their responsibility when they wrote the check...but I do want to be a somewhat compassionate landlord so I'm considering paying half of a single overdraft ($35 so my half would be $17.50). I believe they should be able to work it out with the bank to remove those other overdraft charges.
So what would you do?
-Give them nothing?
-Give them $17.50?
-Give them $35?
-Or give them $105?
My banks won't "cash" or deposit a check that is post dated. When I inadvertently give them such a check, the teller gives it back to me and points out the postdated date on the check. I think that's a rule for all banks. I would say it's the bank's fault and they should correct the charges. The bank never should have deducted the money from the tenant's account in the first place.
These days, there are electronic copies of all checks online, so the bank should have no trouble verifying their mistake.
Pay the $105 this time and never accept another personal check from them.
Did you realize it was post-dated? If you did, then you should pay the charges, in my opinion. And you should promise them you'll never cash a check from them before the first again.
If you didn't know, split the fee with them, and tell them sorry for the mix-up and you won't cash any checks from them until the first from now on.
Otherwise, they will hold the checks until the 1st or maybe even their full grace period. It's wonderful to get checks before the first. I always promised tenants they could pay me early, but I wouldn't cash their checks until the 6th every month (I managed 25 units and they had through the 5th grace period). If they know they can trust you not to cash them, they'll be comfortable to give you the checks early.
Be happy your tenants hand you the check before the first. Don't penalize them for doing so. At least, that's my take on it.
My bank recently told me that there's supposedly some law now (maybe only in CA?) where a bank doesn't have to honor a post-date, that they can cash them when they're tendered.
When someone presents a check to you, it should be ready to be cashed. Post dated checks usually aren't honored and they should pass through. I will "hold" a check if a tenant requests for a few days but I don't look at every single date and wonder when I should cash it. That being said, I don't feel the need to give anything to the tenant. But, I may consider refunding $20 just to be nice and keep a smooth relationship.
Thanks for the advice; I was somewhat surprised to see such a disparity in opinions on this.
After reading this I was prepared to cover at least half $52.50, or maybe even the whole $105, but I was able to get the tenant, myself, and our bank on a conference call today where they dropped all the overdraft fees.
I won't let that one happen again; electronic payments from here on out.
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