Unjustified NSF Remark, and now I can't get an apartment

General Landlording & Rental Properties
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Unjustified NSF Remark, and now I can't get an apartment

Dovid Staples
Rental Property Investor · Chandler, AZ · Member since 2011 · 145 posts · 79 votes

Hello BP!

I have been renting and apartment in a complex. I had been signed up for automatic payments for the rent to be taken directly out of my bank account every month. It says specifically in the leasing agreement that if the payment can't be processed two times then the auto payments are canceled. 

Well lo-and-behold during my lease I had gotten laid off and twice didn't have sufficient funds so the service was canceled. I own that. 

On the last month of my lease I got an email saying "thank you for your payment". I thought that was odd, I wasn't on auto payments anymore. I had the money for rent, but in a different account. I saw no changes in my bank and thought nothing of it - until I applied to another place. Turns out they went ahead and tried to run my account and generated a third NSF remark on my rental history! What can I do about this? The clock is ticking!

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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    9y

    @Dovid Staples - I would ask for a statement from your landlord.  If the NSF was on the 3rd, but you paid in cash on the 6th then you can at least show the new landlord that you did pay your rent, it was just late.  That along with proof of new employment would help.

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  • Marcia Maynard
    Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    9y

    @Dovid Staples - I agree with @Brie Schmidt, I too would ask for a written statement from your landlord. Approach this in a calm, humble and friendly manner.

    Their records may show all of your on-time payments, all of your late payments, and how many times payments came back as NSF. After the first two NSF events, did your landlord confirm with you that they were indeed removing the auto-pay option? Did you clarify with your landlord a different payment arrangement for rent from that point onward? 

    The key here is, when you make a mistake, it's important to communicate promptly with all interested parties about what happened and about what you plan to do moving forward. If it's a big apartment complex, with many automated systems, you can't assume the auto-pay cancellation happened in time for your next rent payment, or at all. To do so would require a person in the office to intentionally take action to contact their bank to cancel it. 

    Look at the wording of your rental agreement... does it say if NSF happens two times, then auto-payments WILL be canceled or MAY be canceled? That's an important distinction. In our rental agreements we often use the term MAY, so we have some room for flexibility and for cases where there are extenuating circumstances.

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  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    9y

    Nothing in technology is "instant", Especially with autopay systems.  Frequently I've see responses, "it will take 8-10 business days for your request to complete".

    The second NSF was also automation retry in an effort to honor your request "Pay to the order of" - - that's called a DEMAND in banking and they are following your instructions.

    Sorry to hear the job problem so imo, it's no ones fault, just circumstances.  When things like these happen, as you now know, you have to take action immediately to suspend or cancel ALL such autopay banking arrangements.

    I'm sure you will get satisfaction with a simple letter to the LL.

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  • Dovid Staples
    OP
    Rental Property Investor · Chandler, AZ · Member since 2011 · 145 posts · 79 votes
    9y

    @Marcia Maynard The lease agreement says "will be" as opposed to "may be"

    @Jeff B. actually this occurred two months after the payments were cancelled.

    Hopefully I'll have my current complex send confirmation of payments over to the new LL, but it does say pretty clearly in the leasing agreement what's supposed to happen regarding the automatic payments

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  • Dovid Staples
    OP
    Rental Property Investor · Chandler, AZ · Member since 2011 · 145 posts · 79 votes
    9y

    Also yes, I have since become employed (by the same company that did my rental history report. Oh the irony) and the new place has proof of my income

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  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    9y
    Originally posted by :

    @Jeff B. actually this occurred two months after the payments were cancelled.

     Like I said, automation is not instant especially in banking.

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  • Dovid Staples
    OP
    Rental Property Investor · Chandler, AZ · Member since 2011 · 145 posts · 79 votes
    9y

    I understand, but in the following month it did NOT run, so I know it took affect. It was only in the last month, without any statement in the lease or notifying me

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