Do you accept personal checks for payment of rent? If yes, what is your personal check policy?

If your tenant(s) visit your bank and make direct deposits, will the bank teller accept personal checks drawn on another bank? If that personal check bounces AFTER being credited to your account, what happens next?

This happened to me 2 weeks ago.

No.

Direct deposit only.

Cash or from their account to mine.

Can this be avoided 100%, no.

I accept money order at lease signing. After that, all payments are ACH. I don't pick up rent, tenants don't mail rent, it is all ACH done online.

If a check, or ACH payment, bounced, the tenant is charged an NSF fee and daily late fees back to when the bounced payment was due. They get a day or two to make a new payment or eviction starts. If the second payment bounces, eviction starts. With ACH, I know if the payment has bounced within a few days at the most.

PattyK,

Yes, we have never hesitated to do this. A few times over the years a check has bounced, in which case late fee and returned check fee apply. This is addressed in the lease.

Having had over 1000 tenants over the last 38 years I had to follow the law in my jurisdiction. As most have said above, on the initial move in funds, first month's rent and deposit, I requested a cashier's check drawn on a local bank. Until I cashed the check, no tenant would receive the keys.

Money paid after that could be paid either by personal check, money order, cashier's check. No second party checks. Once a tenant bounced a check for the first time, I only requested a late fee. If the tenant paid the late fee, I would accept personal checks again. After the second bounced check, I demanded money orders or cashier's checks.

With Chase Bank, they refused to tell me why the tenants check bounced. Some credit unions would only say "refer to maker" also giving no reason.

Yes. They get 1 "freebie", where they pay the NSF fee and the late fee. Another bounce within 12 months and its 24 months of guaranteed funds. (Everybody bounces a check now and then, even me.)

Now, of course this won't stop them from trying to deposit another NSF check into the account. But I make it clear they are on thin ice of that is what they choose to do.

Roy,

"If your tenant(s) visit your bank and make direct deposits, will the bank teller accept personal checks drawn on another bank? If that personal check bounces AFTER being credited to your account, what happens next?"

I don't quite understand your question. It is normal for a check being deposited to be drawn on another bank.

If the check bounces, then the amount is debited from your account and you get hit with a fee.

As was summarized by others above, SD or Move In Fee and 1st month's rent are in cash, cashier's check or MO. Afterward, cash or a personal check is accepted. A one day grace period is allowed. If a check bounces, a late charge, calculated as a percentage of the rent amount, is charged along with a $50 NSF fee. After first returned check, all future rent payments must be paid by certified funds (cash, MO or cashier's check) and no personal checks for 12 months.

I do accept personal checks. I also have a very strict policy that they are charged a $35 fee if I deposit said check and it's returned by ANY bank for ANY reason. I also then charge a late fee (whatever their amount is) since it will then be considered late as now they have not really given me rent. All of this is considered "added rent" per my lease.

I then get to choose (I choose, not them) that I MAY require all future rent payments to be made via certified funds.

I've only had a few actually return in the past 10 years ... and only once per tenant (so it wasn't the same person that did it more than once). The last time it was a sister of the tenant that made the deposit into our account (he gave his sister the money - cash but she opted to write a check to deposit instead ... problem was she didn't have the money in her account). I still charged everything as above to him - but he always pays in cash anyway and it was the only time that it happened. He doesn't give his rent money to his sister anymore to deposit either :).

I also accept personal checks. If it bounces, it bounces. Same as any other check that bounces. Contact the maker and have them make it right, along with your fees. For rent, a late probably would kick in. I would continue to accept checks from a tenant who bounced one ... but not after the second time.

Roy,

My ACH processor is integrated with my online property management software. My tenants log in, enter their bank account information, and submit their rent payment. The money comes out of their account and goes into mine over the next few days. They can log in each time they pay rent, or set up automatic payments.

I have accepted personal checks in the past. Never a problem.

My current tenant direct deposits into my account at Wells Fargo Bank (WF). WF claims they will only accept cash for deposit if the person making the deposit is not on the account.

I do accept personal checks for rent. I'd given a previous tenant the option of depositing the rent into a free account with a local credit union. Tenant deposited bad checks into that account a couple of times when he knew that his lease was ending. I had to waive the late fee and immediately issue a 3-day notice, or the late-paying tenant would make excuses about paying me the rent, nsf, and the late fee to string me along to wait for his payment that would never arrive. Tenant did pay the nsf both times.

I absolutely accept personal checks

Bounce a check it only going to cost you $20....plus my $10 a day late fee, and it its going to take me about a week to know you screwed up so its about a $100 mistake.

Mistakes happen - and I get it.

A mistake only becomes an error after you refuse to correct the issue. Bounce a check on me and not correct the issue - you will have to convince the DJ that bad checks is a good idea.

As a general rule, I do not accept personal checks for rent or anything else. However, when tenants make direct deposit in my Wells Fargo account, I have no control over what form of 'paper or plastic' they use to make the deposit. It really does not matter as long as the bank does not have to put a 7-Day Hold on the deposited check.

In this scenario, when my tenant's personal check bounced, it created a train wreck inside my Tenant Account. Have you ever used your online banking and noticed a Negative number in your deposit only accounts?

This tenant's check did clear after the 7 day hold expired.

I don't think a bank would let a stranger deposit a check into my account. I let 2 of my tenants deposit cash. As far as personal checks, I prefer them over money orders but they must be drawn on a local bank. If a tenant says that their check must be lost in the mail, I can say "no problem, I'll pick up another and when/if the original comes I'll keep it for next month. With a money order, they give you the routine that they will have to put a tracer on it, and that will take at least a week. They buy themselves some time and maybe you will forget!

RathdrumGal, Ya gotta change that immediately! WHEN (not if) you get stung it will cost you a lot. Read my post INDY's WORST RENTER. She stiffed 20+ LLs by finding a LL with your policy, giving a worthless personal check for rent plus SD at move in and squatting. Once the LL realizes they are being scammed (after tearful promises to pay) the LL is forced to spend more money on eviction and more lost rent waiting for the process. Scammers SEARCH OUT casual LLs for this scam and know they will get a few months of free rent.

Roy,

No.

Standard is autodraft (we TAKE the money out of their account, not wait and hope they pay us) and

cash or PayrollCard (factories are now putting the res' paycheck on a debit card) into our Deposit Only account by walking into the bank. Dep Only account wil not accept personal checks because they can bounce.

We have a very few odd situations were we accept money orders, such as a parent paying their offspring's rent.

3 pay via PayPal and pay the fees.

Our NSF fee is $50 plus $5/day late fees.

My job as manager is to anticipate problems and design policies to avoid risk.

Here's the problem: we can have all the fees and policies in the world but it's like putting on your seatbelt AFTER the drunk hits your car.

-locally it can take up to 22 days before a check bounces.

-people don't do checks any more. LLs keep waiting for a rent CHECK but people don't have CHECKS! When you sign up for a checking account they do not give you blanks checks anymore. My 30 something year old offspring do not write checks.

-a check puts the my bank and their bank in control of MY money. Two outsiders. We've had them bounce for no reason. The bank punches holes in the check so we have to track down the res and get another one. More work and less FREEDOM!!!

-banks hate checks. It's a piece of paper that must be handled, sorted, imaged, reported, etc.

-bounced checks are often a ploy to buy more time. "Oh sorry, I forgot to sign it."

-often the check bounces because they lost their job a month or two earlier. They have NO MONEY. NSF fees will not get me my money.

-like carpet, checks are ALWAYS a risk so eliminate that risk.

Make your life simpler and stress free - no personal checks.

While you are at Convention you won't have to worry if a check will be bouncing behind your back!

BRAD

AllyM,

Haha!

Cheap Excuse #548: check bounced because I made a math error!

Comes right behind Cheap Excuse $547: Dog ate my rent check.

Robert,

Accepting personal checks, even from 2 year residents, leaves the LL exposed.

22 days to find out it bounced. Then what?

We must protect our businesses because even the best residents can turn sour or lose a job.

Lost MO happens when the LL allows mailed payments. We no longer accept US Mail as a method to deliver the rent to totally eliminate the "lost" excuse. This resident can do what the others do.

I don't want you to get burned.

BRAD