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I recently took over management of my daughter's SFH, which previously had been managed by the property management from hell. Both my daughter and I, as well as tenants agree that they were definitely from hell.
However, the tenants really missed being able to pay their rent online. So, I looked into the Paypal option. Was confused by their info online, so I called them.
Turns out, if the tenant pays with Paypal and chooses the "send money to friends and family" option as opposed to "goods and services" option, there are no fees for my daughter. The Paypal representative said that this was okay to do for rent payments, that nobody will come after us or anything. Also, their limit is $10,000, so that wasn't a problem.
If they pay using their Paypal balance or their linked bank account, there is no fee for the tenant either. If they want to use a debit card or credit card, there will be a fee. In that case, my lease amendment says that they have to choose the option to pay the fee themselves, as opposed to choosing that the "recipient - my daughter" would have to pay.
I even wrote up a lease amendment for them that they (roommates) could pay their rent separately, which specifies that they could still be evicted if their roommate doesn't pay on time, but if there is an eviction for non-payment, the paying roommate will not be named in the eviction, as long as they vacate the apartment withing the 3 day period.
The tenants had no problem with this, and love that they can get separate landlord references and not have to deal with collecting from each other.
Worked last month like a charm. Thought I'd pass it on.
Turns out, if the tenant pays with Paypal and chooses the "send money to friends and family" option as opposed to "goods and services" option, there are no fees... The Paypal representative said that this was okay to do for rent payments, that nobody will come after us or anything.
Worked last month like a charm. Thought I'd pass it on.
Quote:
...they (roommates) could pay their rent separately, which specifies that they could still be evicted if their roommate doesn't pay on time, but if there is an eviction for non-payment, the paying roommate will not be named in the eviction, as long as they vacate the apartment within the 3 day period.
Odds are that neither of these will ever be an issue.
I still don't like either one and suspect it puts you into a corner w/r/t law.
The second definitely puts you in a corner w/r/t management.
In general... regardless of how many people share or what their relationship to each other is...
it is never a good idea to deal with them individually. If they're all on the same lease they are
one legal entity with J&S liability.
PayPal is an evil company, and sooner or later, you *will* have problems with them. Just google some paypal horror stories.
All that it takes, is for one tenant to dispute a charge, and not only will they get their rent payment back, they will also freeze your account and any other money that you have tied up to it. Sometimes it can take up to six months for them to sort it all out.
Taking payments via paypal would be a last resort for me, I'd rather they pay in pennies, including having to count all of them.
PayPal is an evil company, and sooner or later, you *will* have problems with them. Just google some paypal horror stories.
All that it takes, is for one tenant to dispute a charge, and not only will they get their rent payment back, they will also freeze your account and any other money that you have tied up to it. Sometimes it can take up to six months for them to sort it all out.
Taking payments via paypal would be a last resort for me, I'd rather they pay in pennies, including having to count all of them.
I've never had and never will have a Paypal account and the above post is why. I've know too many ppl who have gotten screwed over by Paypal and it's not worth it to me. Doesn't matter if I'm the one sending money or receiving it...it's not worth the hassle.
I'd love to pay my rent online, I pay all my other bills online, but there is a charge to use your debit card/credit card.
I've been using PayPal (not for rent either way) for a long, long, long time now (so long I can't remember how long - since a short while after it came into existence, anyway). So far (knock on wood) there have been no issues with it. Just to share another side of the story.
I've just always felt it was a bum rap for a paying roommate to get an eviction on their record. And this way, if I do have to evict them, I've got at least one who will hurry to vacate so they won't be named on the eviction. My agreement says they understand I can still go after either of them for the money. It just says that the landlord "may" choose not to name them on the eviction. The tenants were actually quite fine with it.
I know it's controversial, but thought I'd give it a go.
As far as PayPal being evil, I guess time will tell. I've been using PayPal since the inception, and have never had any major issues. I used to sell on Ebay, so there would be the occasional contested purchase, but everything was always sorted fairly and in a timely manner.
I think controversy is a good thing. I enjoy your comments and input :-)
I'll add my two cents in for PayPal as well. I not only use it on a personal basis, but on a business level. I devote part of my working time to freelancing, and almost all of my clients pay me through PayPal. I've been using it for the better part of 5 years without an issue. I also use the PP debit card without a problem. I have had them put a hold on it for verification (I went on vacation and used my card in a different state, so they contacted me to verify it was in fact me and not stolen), but it was lifted immediately.
I don't see the problem with tenants paying with Paypal, unless it's their last month's rent and they're trying to get out of paying it, which they could do without paypal anyway. If they contest the charge, then you start the eviction process for nonpayment, just like always. A deadbeat is a deadbeat no matter how they pay.
I've just always felt it was a bum rap for a paying roommate to get an eviction on their record. And this way, if I do have to evict them, I've got at least one who will hurry to vacate so they won't be named on the eviction. My agreement says they understand I can still go after either of them for the money. It just says that the landlord "may" choose not to name them on the eviction. The tenants were actually quite fine with it.
I know it's controversial, but thought I'd give it a go.
I agree with MrRational, you probably are in violation of state law. If one does not pay, and you move to evict, you would only be able to get a judgment so you can "go after" for the person named on the court papers. If you don’t file an eviction against both, you can only collect from the one that was named. If you don’t name both, but try to collect from both, you may end on the losing end of the money.
You will also want to check to see if state Law established some form of separate tenancy if you are collecting individual payments from both and treating each payment as a payment credited to a specific person. If it was written so that you will accept whatever each pays so long as it totals the monthly rent, you have not created a separate payment for each. This is one of those sticky issues where it may be best to treat them as either a single unit or create separate leases for both. Trying to muddy things by being a friend instead of a business person is sure to end up in nasty court claims.
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