Should my tenant pay my overdraft charges?

Question

I have a great long term tenant since 2002, who has never been late paying.

Last week he went out of town and forgot to make his payment. We texted and he said he would deposit his rent on an agreed upon day, the day of his return. But he forgot again, and I bounced two checks and was charged $75 in fees.

We have a verbal month-to-month lease and have never discussed late payment penalties because we have never had to.

It's my bad because I shouldn't have written checks assuming I had his funds. But he also didn't make the deposit on the day we (re-)negotiated.

If money weren't tight for me at the moment, I wouldn't worry about it. Should I ask for all or part of these fees?

Jolene Adam · Answer

Thanks for the feedback!  I won't charge him anything, but I will move toward a written lease. Not because of this incident, but because another tenant is becoming complicated, and so I think it makes sense across the board.

Steven Hamilton II · Answer

Not his fault you don't have a reserve. You didn't check the balance or have the funds there at the time. It is also not his fault your budget is tight right now.  It should always be in writing. That is your fault and your mistake not his.  The only thing I would consider asking in this situation is for him to cover a late fee on your mortgage. But don't push it. Consider it reasonable especially as I'm sure you'd like to keep the tenant for the winter.

Scott Carder · Answer

I would strongly suggest you beef up your reserves. You owe it to your tenants to maintain the properties they live in, and this could mean making expensive repairs at a moments notice.

Jeff Rabinowitz · Answer

As @Mindy Jensen says, it is very possible that your bank will reduce or waive the fees if this is a rare event for you. Just ask them. As far as the tenant goes...you should broach the subject of a lease (tell them how much you appreciate them but  your accountant or lawyer told you there should be a lease). However, I hope you realize you are very fortunate to have a 13 yr. tenant, especially one who has never before paid late. Don't push too hard and screw it up.

Mindy Jensen · Answer

If your lease does not address this, then I don't think you legally can charge him the late fees.

If this isn't a pattern for him, I wouldn't charge him just out of courtesy. He's been with you for 13 years and this is his first time? I'd chalk it up to lesson learned.

I'd also think about asking him to sign a new lease. Verbal is only worth the paper it's written on.

You shouldn't have written the check without confirmation of funds, but if this isn't a pattern for you, perhaps your bank will waive the fees. I'd ask them.

Ryan Dossey · Answer

This is the reason why accounts (even ones that I rarely use) have some sort of reserve in them.

Mike Wood · Answer

I second what @Steven Hamilton II said.  Those fee's are on you.

If you dont have a formal lease where any late fee is addressed, I would let this one go, but let them know there will be a late fee of ?? in the future.  Given that you have had them as a tenant since 2002, I would just let this one go.

Matt Motil · Answer

You should charge him a late fee if you have it in an agreement, but it sounds like you don't have anything formal. The fact that you bounced checks isn't your tenants fault, that's on you. Your tenant is late, and that's on them.

Since you have a very loose arrangement with your tenant you could always ask them to help you out with the fees since they are late on their payment, but forcing them to seems like a crappy move.

Ann Bellamy · Answer

well you can try.  But spending money you didn't know was in your account, and assuming that a tenant would do what they said and nothing would go wrong, was, well, short sighted at best

Should my tenant pay my overdraft charges?

Most Popular Reply