Charge for paying rent in multiple payments?

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Charge for paying rent in multiple payments?

Alyssa K.
Member since 2018 · 156 posts · 106 votes

The lease states tenant is required to pay rent in one payment. Made one small payment ($400), ignored email stating that partial payments are not allowed per lease and to please cancel the payment (Cozy doesn’t give landlord option to do it on my end), and made remainder of payment ($1350) 2 days later. The processing fee is only an additional $3, however as these tenants have been a royal PITA thus far, and it’s increasingly apparent they will need to be continuously trained, I’d like to charge a fee for them breaking this rule in the lease; however the lease doesn’t state a consequence or fee for paying in multiple payments. TAR Lease, page 2, section 5 D. Would it be reasonable, and allowable, to charge a $50 administration fee to ensure the lesson sticks and remediate my wasted time?

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Jason D.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y

@Alyssa K. I dont care how many payments are made, but if it's not paid in full by the 5th, I charge a $50 late fee.

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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    7y

    I'd consider myself lucky to have received payment in full in a short time frame.

    If you really want to charge a fee, I would charge them the $3.   Given the lease does not stipulate a charge, I don't think a judge would get upset with you for passing on the costs they incurred by not complying with the payment provision.   If you want charge $50, I'd check with an attorney to make sure you aren't going to get yourself in trouble.

    2Reply
  • Jason D.
    Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
    7y

    @Alyssa K. I dont care how many payments are made, but if it's not paid in full by the 5th, I charge a $50 late fee.

    7Reply
  • Alyssa K.
    OP
    Member since 2018 · 156 posts · 106 votes
    7y

    @Greg Scott Definitely glad they paid in full at least. Unfortunately they are “give an inch take a mile” kind of tenants, so I’m having to do everything to the exact letter of the lease with them. I’ve thankfully never had to be so strict with past tenants, but I’m still relatively new to this. Didn’t know if there was a standard rate other landlords charge for their time. For example, during move out, if you were to have to clean/do yard maintenance yourself, would you charge an hourly rate for your time, or only charge for materials/parts?

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  • Alyssa K.
    OP
    Member since 2018 · 156 posts · 106 votes
    7y

    @Jason D. I have the $50 late fee in place as well, and I wouldn’t normally care about the multiple payments, except for the additional processing charge. It’s only $3, but still comes off my bottom line, so I don’t want it to become a habit. They’ve also shown I’ll need to follow the lease to the letter, always seem to be looking for a loophole, so I’m nervous to let the “rent must be made in one payment” stipulation slide, since it’s expressly stated in the lease.

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  • Jason D.
    Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
    7y

    @Alyssa K. My apologies, I somehow missed the FIRST sentence where it is required in one payment. It's a lease violation, send an eviction notice, stating the violation.

    0Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    7y

    Tell them there is an additional processing charge and they need to pay it.

    0Reply
  • Chase Gochnauer
    Investor · Des Moines, IA · Member since 2015 · 380 posts · 201 votes
    7y

    @Alyssa K. I was not aware Cozy charged a processing fee? I believe there's a $3/mo/unit fee if you want the pay out a little quicker is all.

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  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    7y

    @Alyssa K.

    I charge a 5% penalty if not paid by the 5th.  I charge another 5% if not paid by the 20th.  I state this all in the lease.  It sucks, but this is how some tenants are.  I currently have a tenant that pays one week apart.  They are hit with the 5% penalty.  They always pay, it was frustrating at first, but I look at it, it’s additional revenue to me.  

    I thought cozy didn’t charge the landlord and the tenant paid the fees.  That was the benefit of using there service.

    2Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    If it's in your lease, you should enforce it. If you are not going to enforce it, get it out of the lease.

    Every time you allow the tenant to violate the terms of your lease, it's an indication that you really don't care and it's motivation for them to push farther.

    If they are PITA tenants, I would give them written notice of this violation and let them know your next step will be (fine, eviction notice, etc.)

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    1Reply
  • Leigh Sietsema
    New to Real Estate · Asheville, NC · Member since 2018 · 6 posts · 5 votes
    7y

    @Alyssa K. Thank you for sharing this question. I appreciate being able to learn about potential challenges and have learned a lot with this one question and the responses Joyce received. As a tenant myself (we are renting now), I now see both sides and appreciate this challenge. Good to know you have it in your contracts. Thanks again and best of luck.

    0Reply
  • Alyssa K.
    OP
    Member since 2018 · 156 posts · 106 votes
    7y

    @Chase Gochnauer $3 additional for each payment when you have express pay.

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  • Account Closed
    Rental Property Investor · Central, FL · Member since 2016 · 950 posts · 821 votes
    7y

    So besides the 3 dollars is there any other cost to you, specifically time wise?   I’d send a written notice stating they are in violation and continued violations will mean up to and including eviction or some wording like that. 

    For fines or administrative fees it would be hard since it isn’t in the lease.  You could throw it in the letter and state any further payments made in more then one payment will result in a 50 dollar administration fee.  That will get their attention.  

    As for late fees I charge 5% if not paid by the 3rd and 5 dollars a day until paid.  My tenants are trained and know to communicate when they are going to be late and they all without complaint pay the late fee.  I won’t waive it under any circumstance, or at least not one that has come up yet.  

    0Reply
  • Alyssa K.
    OP
    Member since 2018 · 156 posts · 106 votes
    7y

    @Kenneth Garrett That’s a good way of looking at it, and why I’m wondering what I can reasonably charge for the inconvenience. However how I value my time vs how a tenant values my time vs a judge; it’s all relative. I was disappointed to find my lease states a rule without a consequence, I’ll certainly change that moving forward.

    Perhaps I need to check how I have mine set up, but Cozy charged me $3 per payment (express pay). The $3 for rent is passed along to the renter (built in), however if they make multiple payments then I’m being charge an additional $3 for each payment they make that isn’t built in to the rent price.

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  • Alyssa K.
    OP
    Member since 2018 · 156 posts · 106 votes
    7y

    @Nathan G. This is the route I decided to go, gave a written warning, and stated next time would result in a $50 fine. This will be written into the lease in the future as well.

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  • Mike McCarthy
    Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    7y

    For what it’s worth, I’d probably disable the express pay for this unit and just leave it as-is as long as they are paying the full amount by the 5th (or whatever day is in your lease).

    Some things are worth fighting... others just aren’t worth the time or effort. Save your fight for something that really matters.

    3Reply
  • Alyssa K.
    OP
    Member since 2018 · 156 posts · 106 votes
    7y

    @Eric C. No additional cost other than the waste of my time. However as I’m new to this, 1 year in 3 properties thus far, and am self managing, I was curious if other landlords charge a standard rate for their time; for example if during move out you have to mow the lawn, and do so yourself rather than hire a company, do you keep a fee from the security deposit reflective of what your time is worth, the job itself typically pays, or only charge for materials/parts/gas?

    For this situation I sent written notice of the lease violation and warned that in the future a $50 fee would incur.

    1Reply
  • Alyssa K.
    OP
    Member since 2018 · 156 posts · 106 votes
    7y

    @Mike McCarthy not a bad idea, and true, thanks! Normally I wouldn’t worry about something so trivial, but I’m still in my first year (3 properties) and establishing my systems, so when an issue comes up I take it as an opportunity to build it into my systems, and want to make sure I’m always doing so ethically and responsibly.

    1Reply
  • Account Closed
    Rental Property Investor · Central, FL · Member since 2016 · 950 posts · 821 votes
    7y
    Originally posted by @Alyssa K.:

    @Eric C. No additional cost other than the waste of my time. However as I’m new to this, 1 year in 3 properties thus far, and am self managing, I was curious if other landlords charge a standard rate for their time; for example if during move out you have to mow the lawn, and do so yourself rather than hire a company, do you keep a fee from the security deposit reflective of what your time is worth, the job itself typically pays, or only charge for materials/parts/gas?

    For this situation I sent written notice of the lease violation and warned that in the future a $50 fee would incur.

    I believe You are allowed to charge what it would cost to hire it out. My time is more important to me then to do stuff myself, and if you are trying to scale I’ve found the best way is to learn to delegate as much of the labor out as possible.   

    Each state is different of course. 

    0Reply
  • Anthony Rosa
    Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
    7y

    During an eviction case I had a NYC judge tell me  "The bank holding your mortgage doesn't charge you a late fee until the 15th day and you are you charging your tenant a late fee for being 10 days late....You will receive judgement for rent but you can forget these fees". 

    1Reply
  • Jody Nichols
    Rental Property Investor · North Richland Hills, TX · Member since 2014 · 17 posts · 27 votes
    7y

    @Alyssa K. One of the Podcasts somebody mentioned their tenant making payments every 2 weeks when they received their paycheck. By letting them go this route you will have received 1 full extra rent payment at the end of the year. 

    3Reply
  • Mike S.
    Investor · Colonial Heights, VA · Member since 2014 · 115 posts · 68 votes
    7y

    I have one tenant that pays on the 1st and 15th. Works out better for the folks that cant manage money. I'm ok with it.

    0Reply
  • Allan Szlafrok
    Rental Property Investor · Long Island, NY · Member since 2015 · 490 posts · 301 votes
    7y

    @Alyssa K. I’m not sure what the laws are where you live but we generally don’t accept partial payments because it complicates a potential eviction. We ask for full payment or the tenant is in default and late fees are applied. Sometimes we waive the late fees if there are extenuating circumstances for the late payment such as a hospital stay or being out of the country. Sometimes. But as a rule we don’t accept partial payment and that’s probably a good policy.

    1Reply
  • Alyssa K.
    OP
    Member since 2018 · 156 posts · 106 votes
    7y

    @Allan Szlafrok that was exactly my concern, my understanding is that partial payments would complicate an eviction here in Texas as well. It’s in the lease that one payment is required, however lease doesn’t state a consequence for not adhering to this rule (now amended), so I was curious if others charged a fee to make the lesson stick. They thankfully paid both partial payments on time, so I didn’t have to charge a late fee, but I’m establishing my systems and want to make sure I’m setting up policy that is consistent and enforceable.

    0Reply
  • Allan Szlafrok
    Rental Property Investor · Long Island, NY · Member since 2015 · 490 posts · 301 votes
    7y

    @Alyssa K. So i would just say no to partials and tack on late fees when they are late. Whether you choose to collect them is simply a business decision based on your relationship with the tenant and how understanding you are for the reason for the late payment. Unless they have a great excuse or you risk losing them you should probably collect the fees. Don't want to be seen as a pushover because that snowballs quickly with tenants.

    0Reply
  • Alyssa K.
    OP
    Member since 2018 · 156 posts · 106 votes
    7y

    @Eric C. That makes sense, thank you! 6 months ago my time wasn’t more valuable to me than the money I’d spend hiring out a job that I’m capable of completing, however thankfully now that’s no longer the case. I haven’t yet had a move out however, first year in, so I expect small items will come up during make ready for the next tenant that will make more sense to do myself than hire out.

    1Reply
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