Tip of the Month - October 2007
The Brass Tacks of Managing Rentals
Source: Property Management for Dummies
Wiley Publishing - Robert Griswold
Providing a Grace Period
Many rent collection policies allow for a grace period that
provides the Tenants with a few extra days to make the monthly rent
payment in full before incurring late charges. And most Tenants
incorrectly believe that if they pay rent within the grace period,
their payment is legally on time. However, the rent is due on or
before the rent due date and is delinquent from a legal perspective
regardless of the terms of the grace period.
Make sure that the Lease or Rental Agreement and the Tenant Information
Letter are very clear and unambiguous about the fact that the rent is
due on or before the first of the month and is technically late even if
paid during the grace period.
Grace periods are optional and can be any number of days in
length. A few states have mandatory grace periods, so be sure to
check you local and state laws. I recommend that your grace
period expire on the third of the month regardless of whether the third
falls on a weekend, but some states have laws that require you to give
the Tenant an additional day if the third of the month falls on a
weekend or holiday.
You do not have to wait until the grace period expires to begin your
collection efforts. Contact Tenants who show a pattern of being
late. You can even serve legal notices demanding the rent
payment. Your Lease or Rental Agreement should contain a specific
provision that you have the right to refuse payment after the
expiration of your legal demand notice, so that you are not obligated
to accept an offer of rent from the Tenant and can move forward with
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page was updated on 10/01/2007.