Rent checks from someone other than the tenant

5 Replies

BP,

Today was a first - I received a rent check with the name and address of someone I've never heard of. In the memo line, the name of my tenant was written along with the address of the rental property, and it was made out for the correct amount.

Do I need to know who this person is? Are there any tax or legal implications to cashing a check from someone I don't know, or that is not listed in the lease as a tenant?

Thanks,

Lance

I would cash it, then follow up. Rent is the most important thing so at least you got it and on time. I have had something similar happen - and just added the additional person to the lease at renewal which was coming up (after they pass your application process). At the end of the day as long as the tenants are happy, paying and taking good care of the place that is the most important thing.

I am not an attorney and Texas law may be contrary to what follows, but my gut is telling me that since the tenant's name and address is shown on the check, the strong implication is that it is solely being paid on behalf of and for the benefit of the tenant.

Subject to TX law, I'm guessing that if you want to be reasonably certain that no problem or claim arises down the road, I'd credit the tenant with on-time payment (subject to the check clearing) but hold the check and send a letter to the remitter thanking them for the check and telling them you can accept it if they sign the attached document.  This assumes you are not required by law to accept the payment from a third party.  The document could have language specifying something along the lines of the following:

Date:

To: Your company

From: Name(s) on the check

RE: Checks paid for the benefit of __________________ (tenant names)

I/We represent to you the following:

1. The July 2015 payment and all future payments from me/us are on behalf of and solely for the benefit of ____________, Tenant.

2. The acceptance of the July 2015 payment and all future payments, if any, for the benefit of _________________ by _________________, LLC does not now and will not in the future create in the remitter any tenancy or any other rights to the property (or unit) commonly known as _________.

Signed,

Have them sign it and supply them with a self-addressed, stamped envelope to return it to you.  If there is more than one name on the check, I'd have all sign something along the lines of what I've got above.  All of this is provided as ideas to run by a good Texas landlord-tenant attorney.

I had that happen recently...I took the check straight to the bank and cashed it instead of depositing it....and it turned out to be "mom" who was willing to pay the rent for the kids so they did not move back in with her ! Still would have been nice if they had informed me first 

Hi Lance,

To ensure your bases are covered, I would contact the tenants in writing prior to cashing the check, inquiring if their contacts are covering their rent. It sounds like they have a surprise guarantor. I would also find out if this mystery person is making a one-time payment on behalf of the tenants, or if you should expect the tenants to pay the rent in the future. 

Best,

Barry

I would be careful because there might be an issue with your tenants NOT having the rent-- also if another person starts paying the rent, on a consistent basis I would  make sure  the tenants have not sub-leased your property .   

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