lastest dead beat tenant tricks

43 Replies

Was having lunch with one of my business partners and he was telling me that on his rentals he gives his tenants his Bank account number and makes them direct deposit it when due.

However ( and that's here in Oregon) he had to do an eviction and he got to court.. and when in front of the judge the dead beat tenant shows the judge a receipt for 150 dollars for a deposit he put into the landlords account... even though it was a partial payment it starts the eviction process all over.. as the landlord accepted a partial even though he had no intention of doing it.. but the tenant had the account number of course and new what they were doing.. buying another 45 days or so for 150 bucks. 

I know there are better ways to collect rent... but I thought I would share this one.

Thank you for sharing.  

PayPal is an option as it allows rejection of payments.

If you catch the deposit into your account you can send the tenant a check for the same amount as the deposit via certified letter along with a letter stating you are not accepting his deposit. That will be sufficient.

@Tim Hackett

  yes the issue is he did not catch the deposit and got caught flat footed in front of the judge  LOL.... He has a lot of rentals here in Oregon and probably does not analysis his checking account that closely or in this case he for sure did not.

amazing the lengths people go to be dishonest. 

@Tim Hackett

  there is a reason you have so many burned out landlords !!!!

Thanks for sharing Jay. I personally would not feel comfortable giving a tenant my bank account number. There are so many other options to collect rent .. Paypal (as mentioned previously), Chase Quickpay, etc. where you have control over what you accept as payment and your personal account information is not shared publicly.

Originally posted by @David Stefanovic :

Thanks for sharing Jay. I personally would not feel comfortable giving a tenant my bank account number. There are so many other options to collect rent .. Paypal (as mentioned previously), Chase Quickpay, etc. where you have control over what you accept as payment and your personal account information is not shared publicly.

If you accept checks from a tenant and then deposit those checks, the endorsement on the reverse of the check will have your account number. Tenant would just have to look at the check image to see your account, so it's just like giving them your account number. Another reason to eliminate suspect tenants ...

I honestly don't understand what your friend set up.

Almost all of my tenants are  on autopay.  But it's set up as a regular ACH processing through my bank. If a tenant's rent is $1000, it drafts $1000, no partial pays, no opportunities for fraudulent receipts, etc. It's a "pull" method from their account, as opposed to what it seems like your friend set up, which is a "push" method from their account to his.

I love not having to chase checks. But the way your friend did it seems a little odd.

@Michael Hayworth

  well here in Oregon were everyone believes everyone.. and vacancies are less than 1% it was probably just easiest to give the account number so they just drop them in instead of waiting on the mail etc.. and maybe they don't have checking accounts.. but it was a concevieved Idea to just put the 150 in and then go to court tenant knew what he was doing

@Michael Hayworth

What service do you use for auto-ACH pull? I used a bank of america service for auto-ach push from my tenants for $10 a month, but never an auto-pull.

Just a little...aside....on this, for members in different areas. This is state specific as to whether or not a partial payment can stop the eviction process. In FL accepting a partial payment does not "reset" the eviction clock. You are free to accept any monies throughout the process yet continue forward with the eviction. 

There are some "stipulations" on what the LL must do to continue the process, but it does have the advantage of allowing me to recover as much as possible when I can. And if I were inclined to try to work things out with the tenant I can, without losing time in the eviction process if the tenant doesn't come through with the full rent payment before the court date. 

@Jay Hinrichs. Thank you for sharing this.  I have been doing what your friend did for years.  Have been repeatedly assured by my bank that there is no risk to giving this number out and businesses do it all the time.  Of course, during these conversations, both the bank and I were focused on security of the monies in the account.  Never crossed my mind about this scenario.  Luckily, I have never had to evict but just "dodged a bullet" on a tenant I inherited with a purchase.  Could have so easily found myself slogging through the eviction process.   Really made me take another hard look at my "systems" Because it was clear I was dealing with a tenant who was extremely knowledgeable about the system and not in the "I don't want to be taken advantage of by my landlord" kind of way but more in the "I want to take advantage of my landlord" kind of way.  Still, I didn't forsee the scenario you describe.

Guess I will have to find a better way going forward...

So, is anyone aware of a low/no fee service that would allow for direct payments but avoid the aggravating scenario @Jay Hinrichs described?  

@Matt Devincenzo

  what about Georgia.. I have a minor issue there with one of mine few rentals and dealing with tenants... if they paid a partial can I still continue on ?

Looks like Virginia law is ok with partial payment as long as you accept with reservation in writing.  

A. Provided the landlord has given written notice to the tenant that the rent will be accepted with reservation, the landlord may accept full or partial payment of all rent and receive an order of possession from a court of competent jurisdiction pursuant to an unlawful detainer action filed under Chapter 13 (§ 8.01-374 et seq.) of Title 8.01 and proceed with eviction under § 55-248.38:2. Such notice shall be included in a written termination notice given by the landlord to the tenant in accordance with § 55-248.31 or in a separate written notice given by the landlord to the tenant within five business days of receipt of the rent. Unless the landlord has given such notice in a termination notice in accordance with § 55-248.31, the landlord shall continue to give a separate written notice to the tenant within five business days of receipt of the rent that the landlord continues to accept the rent with reservation in accordance with this section until such time as the violation alleged in the termination notice has been remedied or the matter has been adjudicated in a court of competent jurisdiction. If the dwelling unit is a public housing unit or other housing unit subject to regulation by the Department of Housing and Urban Development, the landlord shall be deemed to have accepted rent with reservation pursuant to this subsection if the landlord gives the tenant the written notice required herein for the portion of the rent paid by the tenant.

@Joel Owens

  are you going to make actually read up on this... LOL... I have a cluster going .. so hopefully I can ease out of it...

Great to know. I also give account number. Any direct deposit alternatives that people find helpful? Where it is necessary to accept payment before payment is processed?

Great to know. I also give account number. Any direct deposit alternatives that people find helpful? Where it is necessary to accept payment before payment is processed?

Edit: just caught up with all the posts. Thanks for the other options.

Originally posted by @Matt Devincenzo :

Just a little...aside....on this, for members in different areas. This is state specific as to whether or not a partial payment can stop the eviction process. In FL accepting a partial payment does not "reset" the eviction clock. You are free to accept any monies throughout the process yet continue forward with the eviction. 

There are some "stipulations" on what the LL must do to continue the process, but it does have the advantage of allowing me to recover as much as possible when I can. And if I were inclined to try to work things out with the tenant I can, without losing time in the eviction process if the tenant doesn't come through with the full rent payment before the court date. 

Matt is correct. Been there, done that in FL. My lease states as much, not that any tenant has ever looked at it again after signing it ;) We go over it on the phone before they sign as well. 

As far as giving a tenant my business account number at the bank - every time I write a check to anyone, business or personal, the check number is on there. I've had some tenants paying for years with a direct deposit at the bank, although most are using auto-debit through erentpayment.com. I get access to the money faster if they deposit at the bank, so I like to have a few tenants paying that way every month.

Originally posted by Account Closed:

PayPal is an option as it allows rejection of payments.

 Intuit has a service too.  They charge $1 per transaction.  So in theory it should cost about $12 a year to collect rent and you don't have to give out your account info. 

Originally posted by @Shawn Davis :

So, is anyone aware of a low/no fee service that would allow for direct payments but avoid the aggravating scenario @Jay Hinrichs described?  

 Check this one out by intuit   i haven't used it but it looks promising.  Links up with QuickBooks so it should make things simple if you use both programs. 

Linking to quickbooks will be great for some people.  There are so many options available.  

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