Thankfully, bounced checks are relatively rare, but we do see on average about one bounced rent check every month out of the 260+ properties that we manage. Knowing how to deal with bounced checks is an important part of making sure that a tenant doesn’t feel that they can get away with not paying rent.
All of our leases include a provision that charges the tenant a $75 bounced check fee, which is in addition to the usual 10% late fee that is automatically charged after a check bounces. This serves as a deterrent, and also covers the charge that we incur from our bank so that you as the owner don’t have to pay any bank charges.
Our leases also say that if a payment bounces, we have the right to refuse any further payment from the tenant in the form of a personal check. Again, this is a deterrent, but it also protects you from having to deal with a tenant who regularly bounces checks.
We also report to future landlords if a tenant bounces a check. Most property managers and apartment complexes do a tenant verification check and talk to prior landlords, so it gives us an opportunity to warn a future landlord of a bad tenant. Of course, this also serves as a deterrent to the tenant.
Obviously, with all of these deterrents, most tenants know better than to bounce a check, which is why it’s so rare. But it is important to handle all of this properly to minimize the risk of receiving a bad check. Give us a call so that you can get a professional to start managing your property and taking care of these sorts of things.