Bending the rules of rent collection

Is it wise to accommodate tenant with special payment needs?

Q: At the rental property I manage, we always have the rent due on or before the first day of the month. Recently I had a prospective tenant sign a lease to move in on the 10th of the month. I told him I would need to collect a full month’s rent, and then in about 20 days (at the beginning of the next month) I would collect the prorated rent so that he would be on the proper cycle of paying rent at the first of each future month.

The tenant refused and explained that in every property he had lived previously, the move-in date was the date that rent was due each month.

He also claimed that paying on the 10th allows his paycheck from the first of the month to clear the bank.

I am not really interested in having one tenant pay rent on a different day, as I would have to make a special trip to the bank each month and remember that this tenant pays on the 10th rather than the first of the month. I have been a property manager for many years and had never heard of this before. What are your thoughts?

A: I think you have the right policy, but I am aware that some owners make the rent payable each month on the date the tenant first moved in. For example, if the tenant moves in on the 14th of the month, then the rent for that particular tenant is due on the 14th of each future month.

This policy is legal and may be acceptable to some landlords or property managers. However, I would find it confusing and laborious, as the rent collection extends literally throughout the entire month. It could work only if you have a few tenants and you are willing to keep track of each due date.

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Having all of your rents due on the first of the month makes life simpler and avoids the confusion or the chance of making an error on legal notices for nonpayment of rent.

While I understand that some tenants may prefer to pay rent at different times based on when their income is received, you don’t have to accommodate them, and I would be concerned about a tenant who is essentially telling you that his income or cash flow and savings are insufficient to pay the rent without the most recent paycheck!

In this situation, I would advise the tenant that your policy of rent collection on or before the first of each month is legal and enforceable, and that you are not willing to make an exception.

Q: I am a tenant and have just received a legal notice from my landlord indicating that my rent was late and that I now owe a late charge. I don’t think my landlord is correct, as my rent is due on the first of the month but my rental agreement provides for a four-day grace period. It actually says very clearly that I can pay without a penalty up to the close of business on the fourth of the month.

The way the days of the month fell that particular month, the fourth was a Sunday. I paid my rent on Monday and I think that Sunday is not a business day so I wasn’t really late at all. My landlord says I should have paid on or before the fourth and since the fourth was on a Sunday I had to pay by Saturday. Who is right?

If your rent due date (or the last day of the grace period) falls on a weekend day or a legal holiday, you are allowed to pay your rent by the next business day in most states. This makes sense and there are many examples of this in our day-to-day life.

In most months, that would mean you might get an extra day or two until the next business day after a weekend or maybe till a Tuesday if the legal holiday is on a Monday. That can happen often in the month of July with Independence Day.

Also, remember that grace periods are not required, but are a good idea to give tenants some flexibility in paying rent.

Most landlords and property managers have rental agreements that call for the rent to be due on the first of the month, but this policy of extending the due date for weekends and legal holidays applies regardless of the actual "rent due" date.

At most, it usually means that the tenant gets one or two extra days in certain months, but you could get a situation where even without any grace period and if the first of the month falls on Saturday, then the rent is not due until Tuesday (the fourth) if Monday is a legal holiday.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and "Property Management Kit for Dummies" and co-author of "Real Estate Investing for Dummies."

Email your questions to Rental Q&A at rgriswold.inman@retodayradio.com. Questions should be brief and cannot be answered individually.

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