In a perfect world, rent is collected on-time every month. In full.
Landlords know first-hand this world is far from perfect. Collecting rent is the most important task but today we address whether you should allow partial rent payments.
In this guide, we answer questions on partial payment and provide best practices for landlords. Every state has its own laws regarding leasing. As always, it is best to confirm with your state law.
What is a partial rent payment?
Partial rent payments are what it sounds like: portion of the month rent and not the full amount. Regardless if the tenant paid $1, or they paid $1 short, everything less than full rent is considered partial payment.
Can you get a partial rent payment?
Renters will often try to pay what they can afford. If they do not have enough money for rent, they will offer a partial payment. Typically, with a promise to pay the rest from their next pay check.
Landlords can receive partial payments. Especially when renters pay by cash, check or other offline payment methods. Online payments are better at preventing partial payments.
Can a landlord refuse to take a portion of rent payment?
Lease Agreements and State laws will determine this. Landlords that want to refuse partial rent will need to include a clause in their lease. This should state ‘rent must be paid in full’.
If your state forbids refusal, you must accept all payments. Including a ‘full rent payment’ clause in your lease will not supersede state law.
Are partial rent payments considered late rent?
Yes. Rent is deemed late if is it not received in full by the due date.
When evicting a tenant, do you have to accept payment?
This is state-by-state. Most likely, no. But it is important to check your state’s law.
By accepting a partial payment, you risk stopping the eviction process and having to start over. This requires sending all Pay or Quit notices, again. This can delay your process by 2 weeks.
Why landlords should accept payments?
Renters are human. Everybody falls on hard times at some point in their life. This could be one of those points for your tenant.
Communicate with your tenants and learn about their situation. It is best to assess the situation on a case-by-case approach. Understand why they are short in funds. Was it a one-time issue? For example, car repair. Or is this a sign of ongoing issues? For example, laid off work or purchase a new car they cannot afford.
Do you feel comfortable with the situation? If so, allow the tenants a one-time extension to show you are a good landlord. Make sure to:
- Set a ‘next payment’ amount and date
- Put it in writing
- Proceed with eviction if they do not pay on-time for the 2nd date
Landlords can always start the eviction filing and decide not to follow through. For example, you can provide a 14-day extension by providing them a Pay or Quit Notice. Even if your state law is less than 14-days, landlords can legally go above. Said differently, landlords can give a 14-day notice when the state requires a 3-day notice. Landlords cannot give a 3-day notice when the state law is 14-days.
This indicates to the tenant you will not allow them to drag out the full rent past the agreed terms. You gave them an inch, but not allowing them to take full advantage of you.
Why landlords should not accept partial payments?
There are two primary consequences when you accept partial rent. Legal ramifications. Psychological tolerance.
Legal Reasons: If you already filed an eviction, accepting payment waives your right to evict. It will cease the eviction process you already filed.
Landlords provide a Pay or Quite Notice when rent is late. A 3-14 day period that allows the tenant to get back into good standing on the lease. Every time you accept a portion of rent, you extend the entire eviction process to having the tenants vacant.
Psychological Reasons: By accepting partial payments, landlords display a habit of allowing the tenant to disobey and/or breach the lease agreement. This partial payment may be a one-time issue or becomes a normal habit. Landlords will never know.
How to reject a partial rent payment?
This must start with your lease agreement. Confirm there is a clause indicating you only accept full rent payments. It is important to highlight this to your tenants during the leasing process. Set the expectations early.
If your tenant insists paying you in cash or check, which are bad ideas, then notify them in writing you are rejecting. State the clause in your lease and return the money. Do not deposit any funds into your bank! Very important.
On your rejection letter, confirm again you expect rent to be paid in the full amount and by a set date. If you already filed a Pay or Quit notice, reference that.
Online rent collection with no partial payments
The best way to protect yourself is an online rent collection software that prevents partial payments. With Burbz, tenants can only pay rent in full.
This provides protection to landlords legally. Also, it is an easy scapegoat when your tenants ask. Your response is simple: sorry, Burbz will not allow.
Burbz management software is free for landlords. Tenants can pay with direct deposit (ACH) or by credit card. Our software emails your tenants when rent is late.
In addition, our software acts as a rent roll so you can easily see which rentals have paid or behind rent.