lastest dead beat tenant tricks

General Landlording & Rental Properties
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lastest dead beat tenant tricks

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

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.

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Tim Hackett
Professional · Ashtabula, OH · Member since 2015 · 22 posts · 9 votes
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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.
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  • Bob B.
    Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
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    I have all my rentals on separate accounts and the tenants have deposit slips.

    If I have an issue like this I go on line and set up the account to not allow deposits.

    For those of you who worry about giving an account number out, which isn't a real problem, Wellsfargo will issue a debit card tied to that account that will only allow deposits.

    1Reply
  • Missy H.Pro Member
    Investor · Bloomfield, NJ · Member since 2015 · 207 posts · 121 votes
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    My tenants typically pay on time and they make a deposit directly to my account.  However, once the deposit is made, I transfer the money out into two separate accounts....one that goes to pay the mortgage and the balance in my emergency fund.  In this way, there is never more than $10 in the deposit account.  Although the banks say that my account is safe from unauthorized withdrawals, why take the chance.

    Besides..... when I transfer the money into my emergency fund, it is neat seeing the balance increase. 

    1Reply
  • Che Chiu Wong
    Jersey City, NJ · Member since 2015 · 280 posts · 98 votes
    11y
    Originally posted by @Nicole Jones:

    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.

     Here is a tip.  The account number that I give out is essential a "wash account".  Once I receive the money, I then move the same amount of money to the account that I normally do business with.  That way my tenants does not need to know anything about my regular account.

    Does it accept anything substantial? Probably not. But just to be on the same side...

    1Reply
  • Che Chiu Wong
    Jersey City, NJ · Member since 2015 · 280 posts · 98 votes
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    Originally posted by @Jay Hinrichs:

    @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.

     Pretty interesting on this. Anyone know about their own state? It is coincidental that I asked my attorney on this exact issue.  He mentions in NJ a partial payment is treated the same a non-payment of rent.  Ie. Say thE monthly amount is $1000 but the tenant only pays $999, you can still file for eviction.  Of course, in this case, the tenant only needs to pay $1 to satisfy the debt...

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  • Reed Starkey
    Investor · Belleville, MI · Member since 2015 · 131 posts · 40 votes
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    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.

     You give your account number to everybody you give a check to.  Your account number is anything but private information anyway.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
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    Originally posted by @Steve Babiak:
    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 ...

    So, for any deadbeat tenants reading this thread:  Your landlord's bank account is on the back of any previous checks you wrote and they deposited or cashed.  Use that number to deposit a small partial payment each month you are past due and/or when you are given a quit or pay notice.  When served an unlawful detainer, answer the complaint and take proof of the deposits to the hearing. Score!

    Seriously, I'm with Steve on this.  The least of your worries is a tenant's knowledge of your bank account number. Every check you write or deposit gives out that information to perfect strangers.  The landlord in question didn't see the deposit, which says something about the day to day running of his rental operation. A deposit from a tenant served an unlawful detainer?  C'mon, how do you miss that?

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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
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    @Account Closed

      good point but for me I would have missed it as well for sure.. I think he lumps all his rentals into one account ... Also I don't want him fixated on rentals I want him to keep bringing me the smoking deals he brings me every 30 days or so... that's were we make big money and this is just an irritant.. but for a new landlord with maybe thin resources or reserves this could cost them in our market 3 to 5k in missed rent and legal fee's.. so its one to look out for... I have made every boo boo known to man with rentals.. and as such I am down to 9 and can't wait for the day that that number is zero and all my investments are short term or NOTES>  as stated in other threads... :)

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Che Chiu Wong:
    Originally posted by @Jay Hinrichs:

    @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.

     Pretty interesting on this. Anyone know about their own state? It is coincidental that I asked my attorney on this exact issue.  He mentions in NJ a partial payment is treated the same a non-payment of rent.  Ie. Say thE monthly amount is $1000 but the tenant only pays $999, you can still file for eviction.  Of course, in this case, the tenant only needs to pay $1 to satisfy the debt...

    The challenge, IMO, would be that your unlawful detainer/eviction complaint wouldn't have the correct past due amount if the tenant made the payment after the filing.  No judge here would overlook a complaint where the plaintiff says they owe $1000 and the defendant has proof that they owe only $500 because they made a partial payment.....that was accepted. The judge would want to know why the landlord accepted the partial and why the complaint is for more than the tenant owes.  It's a technicality, but accepting that payment is a mistake if you want the tenant out for non-payment.

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  • David K.
    San Diego, CA · Member since 2014 · 4 posts · 0 votes
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    I have my tenants direct deposit into separate accounts as well.  So I have asked a few banks regarding a scenario where the tenants or anyone you give a check to (as stated earlier it has your routing number and account number on it) would be able to use your information to pay their bills or transfer money online. 

    I.e. tenant (or anyone you give a check to) has your account and routing number and now uses it to pay their electric, phone bill, other rent, etc.

    This has not happened to me personally, but I have seen it happen in my day job.

    And the banks never have a good answer.

    0Reply
  • Che Chiu Wong
    Jersey City, NJ · Member since 2015 · 280 posts · 98 votes
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    Originally posted by @David K.:

    I have my tenants direct deposit into separate accounts as well.  So I have asked a few banks regarding a scenario where the tenants or anyone you give a check to (as stated earlier it has your routing number and account number on it) would be able to use your information to pay their bills or transfer money online. 

    I.e. tenant (or anyone you give a check to) has your account and routing number and now uses it to pay their electric, phone bill, other rent, etc.

    This has not happened to me personally, but I have seen it happen in my day job.

    And the banks never have a good answer.

     Like everyone says bank account number is public information with little point of hiding. That said, personally I still avoid to give this info to my tenant wherever possible. (how often do we write checks to tenants...) 

    0Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    11y
    Originally posted by @Che Chiu Wong:
    Originally posted by @David K.:

    I have my tenants direct deposit into separate accounts as well.  So I have asked a few banks regarding a scenario where the tenants or anyone you give a check to (as stated earlier it has your routing number and account number on it) would be able to use your information to pay their bills or transfer money online. 

    I.e. tenant (or anyone you give a check to) has your account and routing number and now uses it to pay their electric, phone bill, other rent, etc.

    This has not happened to me personally, but I have seen it happen in my day job.

    And the banks never have a good answer.

     Like everyone says bank account number is public information with little point of hiding. That said, personally I still avoid to give this info to my tenant wherever possible. (how often do we write checks to tenants...) 

    It's not just when you give a tenant your check; it's also given to the tenant when you deposit a check the tenant gave you. Read my earlier post in this thread. 

    So unless you refuse to accept payment by check from a tenant ...

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  • Che Chiu Wong
    Jersey City, NJ · Member since 2015 · 280 posts · 98 votes
    11y

    Nice to know. Thanks Steve. You can always (which I do) use a "wash" account for the sole purpose of accepting payments, and then you distribute the money back to yourself.  That way, you are good.

    0Reply
  • Bob Couture
    West Springfield, MA · Member since 2013 · 188 posts · 52 votes
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    Thanks for sharing. That is a dirty trick!

    0Reply
  • Charles Brumfiel
    Homeowner · Aurora, CO · Member since 2015 · 11 posts · 4 votes
    11y

     I have recently come across this site https://cozy.co/for-landlords/collect-rent-online

    Its called Cozy and all of their landlord services are free including direct deposit. They make their money on renters when they pay Cozy for credit checks to be sent to you. I have not used it yet but it looks pretty cool. Anyone else use Cozy?

    1Reply
  • Dan Marriggi
    Rental Property Investor · Scranton, Boston · Member since 2013 · 100 posts · 40 votes
    11y

    I do the same as Che.  ( You can always (which I do) use a "wash" account for the sole purpose of accepting payments, and then you distribute the money back to yourself.)

    One could always close the account and demand rent in cash. That way there is no way to make a partial payment.

    0Reply
  • Shera Gregory
    Investor · Richmond, VA · Member since 2013 · 347 posts · 191 votes
    11y

    We use the intuit payment network. The fee is $0.50 per deposit. I use that to collect the application fee so the tenant is already set up there when they need to start paying rent. They have to set up their payments so it is a push method but I can send a request for payment from within IPN too. They can set up for recurring or do this monthly. Another one I use is erentpayment.com. The fee is $3 per month but they will accept debit cards which is great if your tenant doesn't have a checking account but does get their paycheck on a debit card.

    1Reply
  • Troy H.
    Greensboro, NC · Member since 2015 · 129 posts · 30 votes
    11y
    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. 

     Thanks for the tip.

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  • Mark Boegemann
    Investor, trucker · sugar hill, GA · Member since 2014 · 25 posts · 5 votes
    11y

    wow I think here in Ga that would work to.  Never thought about it many thanks.

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