Tenants Shorted Rent Check $75..And I DON'T Back Down...

39 Replies

I have new tenants in a SFR. They had repairs done without my knowledge or consent. Had I consented, I would have the repair company send me the bill. I will NOT allow tenants to have repairs done and then deduct that from the rent. I am afraid I would be setting a precedent. Next thing you know, they could have a swimming pool installed and I would be on the hook:)....so....I order repairs, I pay for repairs, and tenants are expected to mail in the full rental amount due each month.

These people shorted the check by $75. I don't know how others handle this, but I sent back their cashier check by certified mail and posted a 3 day notice to pay or vacate. 3 days later I received the cashiers check back along with an additional check to cover the shortage plus $25 for the certified letter. I regard this as "training" a tenant. I was a bit skeptical that I might end up in court but in the end this one worked out.

No company avatar mediumJohn Thedford, John Thedford | 239‑200‑5600 | http://www.capehomebuyers.com

@john 

i believe that was a wise thing to do to train, and reemphasize your standards for them to live in your properties. I would have done the same thing. 

Very good John, I agree 100% with what you did. And you got exactly the results needed.

@John Thedford  

  and for that reason I am the worst landlord in the world I would have just let it go.. my time is far to valuable to worry about 75.00 dollars... Only 11 more properties to sell off and then I am truly free of this landlord life.. I just hate it  with a capital H... but that's just me :)

Medium ksqoekox 400x400Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222

@John Thedford  Exactly what I would have done.  And added the late fee.

please explain the "pay or quit" notice vs. eviction for non payment of rent. are these the same thing? when someone decides not to pay, does the "pay or quit" result in a quicker procedure to remove a tenant?

I have seen these go to court before.

The judge at least in my jurisdiction asks the tenant if they informed the landlord IN WRITING of the repairs needed and do they have a copy of such a document?

99% of the time the answer is they do not have the document, or they verbally told the landlord, or they did not want to bother the landlord so they did it themselves or had Uncle Bubba do it and of course the repair bill is inflated for work done (if it was ever done... : ) to offset the rent being paid.

Now if the tenant does give notice in writing and can prove it was delivered to landlord and the landlord refused or did not make the repair then the tenant might have a leg to stand on.

Otherwise the judge throws out the tenants argument.

No legal advice.

Medium allworldrealtyJoel Owens, All World Realty | [email protected] | 678‑779‑2798 | http://www.AWcommercial.com | Podcast Guest on Show #47

I would have done it a bit differently.  1. Cash the original cashier's check  2. Notify the tenant of $75 rent still due with a phone call.  3. Review with the tenant the terms of the rental agreement and what I need them to do now and in the future about repairs and rent  4. If they did not pay the remaining $75 within our 5 day grace period, then I would hand or mail a late rent letter and charge our standard $50 late fee. 5. If they did not pay soon after, then I would serve the "Pay Rent or Quit" notice.  6. The legal notice comes with a $20 posting fee that would also then be due.

Marcia Maynard, Fischer Properties | Podcast Guest on Show #83

#6 Rule of Landlording - when a tenant gives you money, never give it back.

You should have a clause in your lease pertaining to partial payments and how they do not void your ability to pursue necessary action to collect the full amount due.

@Joel Owens  

the tenant did not submit anything in writing.  Also, this repair was a drywall repair in the garage. The tenants are quite elderly and have nothing to do but complain complain complain and look for problems. Any repair that affects the usefulness of the property, health, safety, welfare, etc gets same day attention. I was aware of the complaints about the drywall and my tenant explained I "did not fix it fast enough". 

No company avatar mediumJohn Thedford, John Thedford | 239‑200‑5600 | http://www.capehomebuyers.com

@John Thedford  

Especially in that case with those type of tenants you did the right thing! Personally I tell my tenants no! I repair not improve :)

Marcia Maynard has it right,

exactly right.

...and remember Aaron's Mazrillo's rule of Landlording.

Originally posted by @Seth Sherman:

please explain the "pay or quit" notice vs. eviction for non payment of rent. are these the same thing? when someone decides not to pay, does the "pay or quit" result in a quicker procedure to remove a tenant?

In our state, the "Pay Rent or Quit" notice is a legal notice that can result in either the tenant quickly paying the rent or quickly vacating the property. It is also the first step in the legal eviction process. If the tenant doesn't respond to this notice, then you either proceed with  the eviction process or don't. If you don't, the tenant knows you lack follow-through. If you do proceed, it will cost you more time and money.  We try to use other means to bring tenants into compliance with the terms of the rental agreement before resorting to legal notices. We find it makes for a better landlord-tenant relationship in the long run.

Marcia Maynard, Fischer Properties | Podcast Guest on Show #83

@John Thedford   - Firm and consistent has always been the best policy with my tenants. Set the expectations and don't waiver. 

That said, Account Closed 's rule #6 is also one of my policies. 

This is a great example for any current or future landlords and/or property manager.

Originally posted by @Seth Sherman:

please explain the "pay or quit" notice vs. eviction for non payment of rent. are these the same thing? when someone decides not to pay, does the "pay or quit" result in a quicker procedure to remove a tenant?

 Luckily this isn't something we have to do. Some states require you to post a "pay or quit" notice before you can start court proceedings. Lucky for us we can just file non-payment of rent immediately.

@John Thedford  I am totally with @Marcia Maynard  and Account Closed on the best course of action here.  NEVER give the money back when you are collecting from someone.

I would recommend a collection course if you find any in your area.  That's where I learned a long time ago, never give any partial payment back.  Even if they try to be slick and write "payment in full" on their check or money order.  All it takes to counter that is three words "endorsed under protest" when you endorse the check/money order.  That's what works in LA.  Seek out and take a collection course - you need to know the legal answer to these type questions for the state you do business in.

I'm all for training tenants by immediately enforcing rules I have on the lease or rental agreement; a "maintenance notification" clause, a "how funds are applied" clause, etc. are all good clauses to have in the contract. In my state I can just serve a notice for the unpaid portion of the rent. Your second post is more troubling to me as these tenants may not be a fit for your property, another way to "train" tenants might be to send a 30 day notice increasing the rent.

I guess I'm in the minority here.  To be fair though I don't mange my own properties, I get enough practice being the bad guy at work!  Unless I want to get rid of the tenant I would have handled it differently.  I would have either discussed it with the tenant and followed up with a certified letter, or just send a certified letter explaining that it was excepted this time but will not be accepted in the future and reminding them of terms.  I do think there are times to get rid of a tenant, and if this is the case I would start raising the rent as mentioned above. 

Long ago I heard a great saying pertaining to the landlording business -

"When somebody puts money in your hand, close it."

Just browsing through recent posts and want to thank you for sharing the experience and the responders.  This validates what needs to be done in this situation and will use it for myself one day as well.

Thanks, 

don't know how to hash tag names yet, but thanks John, Marcia and Aaron

This post has been removed.

Originally posted by @Aaron Mazzrillo:

#6 Rule of Landlording - when a tenant gives you money, never give it back.

You should have a clause in your lease pertaining to partial payments and how they do not void your ability to pursue necessary action to collect the full amount due.

 Coincidentally, the Ferengi First Rule of Acquisition.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you