Non-Sufficient Funds Payments from Tenants
Here’s a scenario in which the Tenant has bounced payments more than once and you no longer want to allow this to continue. What are the Property Manager’s options?
To start, it is important to consider that most property managers prefer that payments are made electronically. This saves time and virtually eliminates the possibility of “human error” in comparison to payments being delivered to the office. One problem with electronic payments (e-checks, credit cards or debit cards) is the length of time it takes to learn that a payment is being returned. In that interim, the system may “think” that funds are available allowing bills and distributions to be paid. Then if the payment “bounces” after the fact, Owner funds will probably be negative which puts the property manager in a commingling situation…NEVER a good thing.
Did you know that Tenants can make electronic payments with cash – no bank account required! Give the Tenant a PaySlip containing a QR code. This code is unique to each tenant, not just the property. The same code can be used month after month, as long as the Tenant is in the same property. This option is available to ALL tenants, not just the ones who’ve had payment challenges in the past. The Tenant pays with cash at any 7-Eleven, CVS Pharmacy or Ace Check Cash Express with the code. The payment will post to their ledger within minutes. Funds usually take a couple of days to post to your bank account. Note: PaySlips do not restrict partial payments, but they do have maximum payment restrictions in any 24 hour period.
The property manager can also disable the ability for a tenant to make online payments without restricting the other features available (i.e. submitting work orders, document review, etc.) through their portal. To do this, uncheck the “Allow Online Payments” option on the tenant page. This way you’ll know that once funds are available in your bank account, they’re not going to bounce.
Some property management companies’ will keep the tenant in an “Evict Status” and have them pay with certified funds for the duration of their remaining lease. Keeping them in evict status ensures no partial payments are made online.
What about you? Do you have experience with NSF payments from tenants? Do you have another method that you use to resolve these types of issues? We’d love to hear from you!
In the meantime, please keep in mind that APM Help is always here for the Property Management community. We care about property managers and want everyone to have clean books. Take advantage of our free 30-minute consultation TODAY. We’re in your corner and want you to be WINNERS when it comes to accounting.
If you have any questions, you are welcome to reach out to us by phone at (281) 949-8755 or email at info@APMHelp.com. Visit us on any of our social media platforms using messenger or comments.