L/O tenant paid in two checks - Posted by edwin

import · November 9, 2009, 9:38am

Posted by Ken on November 10, 2009 at 06:42:55:

It will help convince the tenant to send 1 check,which is the goal

import · November 9, 2009, 9:38am

Posted by edwin on November 09, 2009 at 10:38:04:

I recently entered into a lease-option contract with a tenant. Rent is $1,000 monthly, with a $100 credit if they exercise option to buy.

Tenant just sent me $1000 in two checks: One for $900 labeled “rent,” and one for $100 labeled “credit.”

I can see a potential for a problem if this continues and they don’t exercise the option, but later want a refund for their “credits” paid.

I think I should refuse the $100 check and have them issue a correctly described one. Agree or not? Thanks.

import · December 5, 2009, 2:45pm

Re: L/O tenant paid in two checks - Posted by -Steve-

Posted by -Steve- on December 05, 2009 at 15:45:47:

Edwin-

Your option agreement should state that rent credits are nonrefundable for any reason. It sounds like the tenant thinks you are saving the $100. per month until they buy. I don’t think this is what you are doing. Make sure your tenant understands what the rent credits are. I wouldn’t take checks that state “credit”.

import · November 9, 2009, 9:56pm

Re: L/O tenant paid in two checks - Posted by Chi Ming

Posted by Chi Ming on November 09, 2009 at 22:56:53:

They are setting you up to get the “credit” portion back when they bail and file in small claims to get the “credit” refunded because the did not buy. Return the checks and ask for a single check since they get NO credit UNLESS they can close escrow on buying the house.

import · November 9, 2009, 2:03pm

Re: L/O tenant paid in two checks - Posted by Ken

Posted by Ken on November 09, 2009 at 15:03:24:

I would tell them to send a new $1000 check because when they go to a bank the way they did it will confuse the bank,they are used to seeing one check paid as rent

import · November 9, 2009, 2:33pm

Re: L/O tenant paid in two checks - Posted by edwin

Posted by edwin on November 09, 2009 at 15:33:31:

Thanks, but I disagree. The bank doesn’t care what a check is for. All they care about is if the numbers match up.

import · November 21, 2009, 6:08am

Re: L/O tenant paid in two checks - Posted by River City

Posted by River City on November 21, 2009 at 07:08:27:

I agree with Edwin. Landlords should make no excuses, just state things as they have to be. You need to let the tenant know who is in charge of this deal, and it should not be the tenant. No need to pretend that it is the bank that is in control.

You might should also review the terms of the agreement with the tenant to make sure s/he really understands how it works.