Sometimes your renters will have financial struggles. Maybe they had their hours cut at work or they fell ill and need to pay medical bills. Of course, you want to be a kind and understanding landlord, which makes it tricky when they ask to make a partial rent payment.
There might be an occasion where accepting a partial rent payment on the due date could work out. If your renter has been renting from you for several years, and has never been late before, you might want to give them a chance to catch up and make a partial rent payment on the due date.
If you agree to accept a partial rent payment
If you agree to accept a partial rent payment, put the arrangement in writing.
State the amount of rent the renter is paying you (the partial amount) and the date the balance is due. It’s acceptable to allow partial rent payments before the due date.
If you charge a late fee per your lease, specify whether you’ll charge the late fee and the amount or whether you will be waiving the late fee. Sign this notice, and have your renter sign it as well.
Fall back on your lease
Your lease probably states when rent is due each month, such as on the first day of the month or the 15th of each month. Having language about when rent is due each month means you don’t need a clause that addresses partial rent payments.
But if you don’t want to accept partial rent payments, and feel as if you want some backup (maybe because you’re a big softie who can never say “no”), go ahead and include language in your lease that prohibits renters from making partial rent payments. It could be something along these lines:
In the event that any rent payment required to be paid by Tenant(s) is not paid IN FULL by [whenever rent is due each month] [insert consequence].
I usually outline all possible solutions, including:
- Hefty one-time and daily late fee
- Lease termination
- Damage to credit
When to accept partial rent payments
While it’s generally a best practice to not accept partial payments on the due date or during an eviction, it’s perfectly acceptable to allow partial payments before the due date—as long as your renters pay in full by the due date.
In roommate situations, it’s okay to accept partial payments from each of the roommates, as long as the total rent due is paid by the due date. If you accept online rent payments in Cozy, renters can make partial payments so roommates can split the rent.
But once the due date hits, you should enforce your late fee policy if the total amount due isn’t paid. This happens sometimes in roommate situations. For example, three roommates pay on time, but the fourth forgets. In that case, the whole group gets assigned a late fee, according to the lease. Encourage your renters to set up automatic payments in Cozy.
Note: Cozy has a feature that lets you stop payments in the case of an eviction. This prevents renters from paying a nominal sum, such as $1, just to delay eviction.
The downsides of accepting partial rent payments
The reason it’s not a good idea to accept a partial rent payment on the due date: if your renter can’t afford the rent this month, they might not be able to afford it next month, either. The longer you let them delay payments, the further behind they’ll get on paying you your rent.
Another reason not to allow a partial rent payment—you have multiple properties. It’s not good practice to have different rent policies. If you start letting one renter make partial payments and not your others, and your other renters somehow find out, you could be accused of discrimination.
Run a business
When renters have financial difficulties, they probably need to prioritize which payments they must make and which they can slide on a bit. If they don’t make their car payment, their car will be repossessed. If they don’t pay their credit card, they’ll hurt their credit score. So they might test the waters to see whether you’ll be the creditor they can put on the back burner. If you let renters slide on rent, then you’ll probably see partial payments and late payments pretty regularly.
You, as a landlord, likely depend on getting your full rent payment on time so that you can pay the mortgage. You can’t very well go to your bank and offer a partial mortgage payment. In fact, the mortgage company will send back the partial payment!
But if your renter makes partial payments throughout the month, that’s okay, as long as you get your full rent by the due date. Remember that you’re running a business, and doing so requires that you have rules that your renters abide by. A good motto is, “If you can’t pay, you can’t stay.”
Check the law
In some jurisdictions (check your landlord-tenant state laws), if you accept partial rent payment, you might not be able to evict your renter if they never pay the balance.
If you accept less than the full amount, you waive your right to collect full payment for that month. Again, it depends on the jurisdiction.
If you deviate from your rental agreement, and let renters slide on rent payments by allowing partial payments, you might soon be out of the landlord business.
But it’s okay to accept partial payments, with the caveat that if a renter doesn’t pay the whole thing by the due date, they’ll get a late fee and possibly a notice to pay or quit.
During an eviction, you should refuse all payments (partial or full) until the court hearing.