Sunday, February 10, 2013
Cash is King... Except for When Paying Rent... Yo!
Hello All.... Happy 2013 to all of my loyal.. and soon to be loyal subscribers. I have received a few calls this month about paying in cash, and I thought that I would pop in to say hello and to send you a few good tips from the real estate lawyer trenches on the subject of "greenbacks." Sure it is convenient to just fork over your rent payment after you've been to the Currency Exchange to cash your paycheck. It is definitely nice to have your landlord just pop on by for a cash payment on the 1st when he wants some money. However, as I am known to do from time to time, I have some strong feelings on this topic that I'd like to share with you. So here it is: news you can use on cash-ola!
For Tenants: NEVER NEVER NEVER Pay Your Rent in Cash, UNLESS You Get a Receipt!
Time after time I get calls from people who ask me to assist them in defending against an eviction. They promise me and swear up and down they have paid the rent. However, when I ask for proof of those payments, the response is usually something like "uh... I paid cash... I ain't got nothin' to show about it... but I paid!!" Well, yes, you probably did pay something. However, if you can't prove that to your Granny, then you can't prove in a court of law! I don't care how loud you yell... if you don't have a receipt, then sorry buddy, but you ain't got nothin'!! Rent and mortgage are the most important payments you make all month. Be sure to track and retain receipts. If your landlady doesn't give you a receipt, then make one! It's easy. Just do it. I said so.
For Landlords: Be Wary of People Who Pay Rent in Cash
If you were a landlord... would it matter to you if your tenant had a bank account? NO? Well, it should. Why? Because people who have bank accounts, usually do not bounce checks. Good old Bank of America or Chase will close the account of anyone who writes too many NSF checks, so if a person has a bank account, then chances are they have a job (or had one) and they probably can prove that they have decent credit. On the other hand, if someone does not have a bank account and pays only in cash, then while they might be wonderful God-Fearing people with an 800 credit score, more likely than not, they have some issues that might prevent them from being a good tenant. It is best to consider, as a rule, that people who do not have a bank account or only pay rent in cash or money orders, have some issues that might need to be explored. Just saying...... paper trails are good and when people do not want one, you may wonder.
As a note on the eviction process.... a court will consider examining receipts for money orders or hand-written receipts. HOwever, since those can easily be forged, the best policy to protect both landlords and tenants is for the landlord to require and the tenant to write, a check every month for the rent. Why? Just do it! I said so. It's good for you. When I conduct landlord-tenant seminars for NTN-Chicago (check my website for dates), I always tell landlords who attend that they should make it a policy to require that their tenants pay them with an established checking account. Why? It's good for them. I said so. When people balk at this and ask me why any landlord would not want cash... I simply remind them that yes, cash is king. However, when dealing with people who choose not to be on the "radar" then one must wonder why. What you might find would likely surprise you.
So, rather than look under the radar... best to just make a few simple rules about renting and paying - that everyone can live with.
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Posted by Alisa M. Levin, Esq.