PHOENIX, AZ. – Do you own a Phoenix Rental Property and are wondering if you should accept a partial rent payment? More importantly, what are the ramifications of accepting partial payments?
It sounds pretty basic that if a Tenant told you they could give you half the rent today and the other half next week, it would seem like an easy decision. After all, many Landlords would rather take some money than no money. But Landlord-Tenant laws add a few wrinkles that you may want to consider before allowing partial payment.
Make Sure Everything Is In writing
Like anything you do in your business, you should always make sure that when arranging a partial rent payment, it should be in writing. State the amount of the first payment, and the amount of the remaining balance as well as specifically when that amount is due. Your written arrangement should also include any late fees associated with partial payment. Be 100% clear with your tenant on the amount of money they are expected to pay to catch up on their rent.
Always Fall Back On Your Lease
Partial payment can be a conundrum for many Landlords, but if you simply follow the language in your lease agreement, the terms and penalties are quite clear. By not accepting a partial payment, you have the right to charge fees and penalties as well as eviction. But if you accept partial payment, the terms of your lease for payment can be voided for certain situations.
Some of the consequences can include:
- Loss of late fee or a daily late fee.
- Forfeit the right to carry out an eviction.
- Forfeiture of the ability to collect the remaining balance of rent.
Why Accepting a Partial Payment Is Not a Good Idea
Owning rental property is a business and like any business, if you fail to stick with your lease it’s possible that your tenant will take advantage of your kindness, never get caught up on paying their rent, and always be behind on their payments each month.
Often times the court will not allow you to evict a Tenant in the same month that ANY payment for rent was collected. The courts consider this partial payment and require a Landlord to wait until the next scheduled rent due date to begin the eviction process. This can sometimes be mitigated with a partial payment addendum, but not always.
In addition, many Tenants who are forced into a partial payment situation never recover. Once they start paying late or in a partial payment situation, they can’t get off that cycle, simply because the next month’s rental payment is that much closer.
To learn more about partial rent payments and if you should accept them at your Phoenix Rental Property, or to speak with us about our property management service, contact Goldenwest Management today by calling us at (602) 765-4750 or click here to connect with us online.