Is it ever a good idea to return pre-paid last month's rent?

[Karli F.]

Hey guys, I'm in Minnesota and my renters did not meet the credit score requirement so they agreed to pre-pay the last month's rent as assurance. They are coming up on a year of timely rent and have been great tenants and with COVID and everything, I have been thinking about refunding the last month's rent. I'm looking for recommendations or advice on whether to do so or not. Thanks in advance!

[Julie Hartman]

I would not do it. You will lose your leverage if they should default somehow. Paying rent on time is the expectation for all tenants. They can look forward to that much more as a refund when they move and leave you an undamaged, clean property.