Everything Landlords Should Know About Partial Rent Payment

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Partial rent payment is exactly what it sounds like – it’s whenever a tenant makes a payment that is lower than the full rent amount. If rent is $1,000, a payment of $800 would be considered a partial rent payment.

This concept may appear simple at first glance, but it can get pretty complicated when it comes to dealing with your renters.

Due to the implications that we will cover, the way you deal with partial payments will set the tone for your overall property management style and leniency.

If you are dealing with partial payments for the first time, you probably have some questions such as: is rent considered late if it was only partially paid? Should I even accept partial payments? When is it advisable not to accept partial rent payments altogether?

Let’s take a look at the main considerations you should take into account when forming your partial rent payment policy.

Is Partial Rent Payment Considered Late?

The ultimate say on whether a partial payment is late comes down to the language in your rental lease agreement. However, in almost all cases if rent is not paid in full by the due date, it is considered late.

This means that even a rent payment of $990 out $1,000 was paid on the due date, leaving a balance of $10, you can still tack on a late fee, which you can automatically with the right software.

Partial payments don’t always result in late rent – if the $990 was paid a few days before the due date, and the remaining $10 paid on the due date, rent would be considered paid in full and no late fee can be applied.

When Should I Accept Partial Rent Payment?

This is when you start to formulate your partial payment strategy. A rental operation is a business, and as in any good business your goal is to get paid on time, and in full.

An ideal tenant is one that pays the full rent amount by the due date, helping you maintain a healthy cash flow cycle. But that doesn’t necessarily mean that you should deny partial payment – sometimes life happens and your renters truly need a one-time break.

Other times, however, you might find that your tenants are simply fiscally irresponsible and are consistently late on paying the full rent amount. Tenants who simply aren’t capable of making the full rent payment should be avoided, and bad tenants are one reason to consider disallowing partial payment.

The Risk of Accepting Partial Rent Payment

The risk of accepting partial payment is enabling your renters to make it into a habit, which might not be what you want.

If you are comfortable with collecting partial payments and trust that your renters will eventually pay rent in full, accepting partial payments could be a useful strategy for maximizing revenue by collecting late rent fees along the way.

However, assuming you don’t want to regularly deal with partial payments, you should speak with your renters to understand their reason for making a partial rent payment the first time it happens.

Assuming their reason is valid and you choose to accept the partial payment, you should make it very clear that you are making an exception and that consistent partial payments should not become the norm. You should also consider putting this in writing.

Whatever your strategy is, be clear and upfront with your tenants about it. A late fee is fine to collect as long as it is fair and your renters are well aware of it.

When should you NOT accept partial rent payments

If you are dealing with a problematic renter that you have solid reason to want to evict, you might need to prevent them from being able to make any kind of payment in order to do so.

This is because, depending on your property’s county laws, accepting partial payment could nullify the eviction process.

We recommend consulting with an eviction specialist before you accept partial payments during a possible eviction.

Accepting and Blocking Partial Payments Online

If you already collect rent online, you are well aware of the benefits that come with solid property management software.

Using Zuby, landlords can collect partial payments for free and automatically charge a late fee should rent not be paid in full by the end of your grace period.

Landlords using Zuby can also block partial payment with the tap of a button. This is done on a property by property basis in Zuby, so you can decide which properties to allow or block from making partial rent payment.

In addition, you never to share your bank account information with renters, so if you are going through an eviction process you can simply remove them from your property and never have to worry about them making further partial payments.