Partial rent - yes or no?

Question

A landlord friend told me this week he won't accept partial rent. Not a dollar short.

His reasoning: the month you take $800 of $1,200, you've told the tenant the number is negotiable. And if you ever end up in front of a judge, your own payment history says you accepted less.

I get it. I also know the tenant who pays $900 on the 1st and the rest on the 12th, every month, and has never missed the full month.

The hard line is clean. The flexible version keeps a good tenant housed through a bad month. I don't have a great answer.

What's your rule - partial rent, yes or no? And if it's yes, where's the line?

Yisroel Pollock · Answer

The alternative-universe point is fair. But your affordability line is the tell - a two-week gap every month isn't a payment problem, it's the rent being wrong for that tenant.

Alan T. · Answer

I dont do it. I think every type of exception you make, adds more complexity, risk etc. I think in a lot cases these are good residents - when folks mention the ones that have been consistent, I think the issue there is that - you dont know the alternative universe.  In reality, for the cases where the person ended up being a reliable 10+ year tenant, they likely would have been that way. Unfortunately, if they are cutting it this close, e.g. 2 week difference, you have an affordability problem, and that might be your bigger issue. One small hiccup, and you're not getting paid.

Jim Johnson · Answer

I’m not against a partial payment when it’s a good tenant dealing with a legitimate one-time issue, but I wouldn’t let it become the normal way rent gets paid. If I make an exception, I’d want the remaining balance and the date it will be paid clearly agreed to in writing. Someone paying $900 now and $300 later every single month isn’t really having an occasional rough month anymore—that’s a payment pattern I’d want to address.

Yisroel Pollock · Answer

Exactly the line: a one-time rough month in writing is a bridge, the same split every month is a smaller rent nobody admitted to.

Yisroel Pollock · Answer

Nineteen years is the whole argument in one story. The strict part did the work - two dates, in writing, no drift.

Christine Kankowski · Answer

I had a long term tenant who I made an exception for.  He paid twice a month always stayed on top of it, but if he paid all up front he had no more money until the 2nd payday of the month.

So it was a strict schedule, payable in 2 parts.  Sometimes, you need to work with people. Still a tenant, 19 years in .  He has paid on the 1st for 5 years + since the little blip.  All good.

Yisroel Pollock · Answer

Respect the clean version - one rule, nothing to defend. Ever had it cost you a tenant worth keeping?

Eric Gerakos · Answer

Never accept partial.

Richard F. · Answer

This is where so many investors/PM's absolutely FAIL. They treat this as something unique that needs to be figured out, creating a new issue to negotiate, "track", and add to their stress.

Rent is due on the first. Period. Maybe you have a "grace" period, 4 or 5 days. Wonderful. And reasonable. It is ridiculous to need to "track" different due dates, or allowed "exceptions" to your written rental agreement. Can't pay the full amount when due? No problem. The "Late" letter, with additional fee added, will be sent on the day after your grace period ends. Once that letter goes out, then you ARE required to pay the full balance in full, AND in "Good Funds"...no personal checks. On day 31 after the late notice (or otherwise per local law), an eviction will be filed. Period.

"Pretending" the first of the month does NOT work for everyone is a joke. Tighten your criteria and screen better. If they routinely cannot pay on time, they can request their other creditors to adjust their payment schedules. Utils and nearly anyone will allow one permanent shift in the regular billing date. If they can't pay the rent, they have no place to keep all their other stuff, so you need to be first in line. Similarly, if you DID perform a mediocre screening, they should have some savings. Suggest they pay half the rent out of the savings for the first month, then follow a strict budget so they will be able to pay the full amount every month when due.

Reality is, if they are that tight on funds, YOU are one car repair, one bout of flue, one minor "emergency" away from needing to evict anyway. It's cheaper to start the process today, than it will be tomorrow. If you would rather run a Charity, look into IRS 501C regs.

Yisroel Pollock · Answer

Fair hit - screening beats any payment policy, and I'd rather fix a bad match at application than manage it for a year. My only wrinkle: a full month paid on the 1st and the 12th, in writing, is a schedule, not an exception.