Tenant can pay rent but not deposit
Hi, I'm new to landlording but thanks to BP I think I have a pretty good handle on the basics. What this situation is though, is somewhat unique. Here's the story:
So I purchased this property with 3 tenants already in place and one unit vacant which was great because it's an FHA loan so I am occupying one unit. The property overall is in pretty bad shape with lots of deferred maintenance and very aged and damaged interior. Two of the current tenants are okay and pay their rent on time and have fully paid deposits but the last tenant is a first time renting couple who moved in July and has a one year lease in place. The catch is that the old landlords allowed them to make payments on their deposit which I only found out at closing when there was no deposit for that unit. Turns out the old landlord had never bothered to collect any of the payments on the deposit since the place was under contract and it was up to me to collect back payments and future payments on that deposit. The term was 5 months at $200 a month to cover the $1000 deposit. So far no payments have been made and I told them clearly up front when I took over that the whole deposit would be due on the first of December.
This month they informed me that not only would they not be able to make this month's rent they also would not have the deposit. They have since scratched up enough money for rent but not enough to cover the deposit that is currently due in it's entirety. As with most tenants there is no way they will be able to pay the deposit and still make their next month's rent.
So the question is do I accept this month's rent and simply forget about the deposit or possibly file an extension for their deposit payment? Since the units are pretty trashed I am renovating all of them so even if they trash the place I will be doing repairs anyway. I would prefer not to have to go through with evicting them since I am already in the middle of renovating the unit I'm living in and having a turnover right now and a second renovation to do is far from ideal for my timeline and would eat into my reserves heavily.
Thanks in advance for your advise!