Partial Payments

Prime

How does everyone handle the partial payment situation with tenants, we do not make money on promises. If a payment like that is made and nothing else is paid wouldn't you have to resend a cert letter, or re lien them ??

skinman

I will only accept partial payments on my terms when it comes to being in lien status... If it is the first time they are in auction status, I will allow them to pay 60% of their total balance due to be removed from the auction list. If there is a second time it's 75%. If the third time actually becomes the charm, they have to pay 100% to be removed moving forward. I have known managers that are owed $1000 and let folks pay $100 to be removed from the list... Then keep following the same process over and over. Auction notice...$100 payment...2 months later it's groundhog day again and it never ends.

skinman

That being said I have a couple of customers who never pay until there is an auction... but they pay their balance off. They have the money, but I guess if they don't mind all the late fees and never having access to their unit.... neither do I.

ThriftyStorage

I agree with Skinman! I tell many tenants ," they are responsible for what happens to their unit." I am not here to baby sit and hold grown folks hand. People will pay for what is important to them!!!

sonyawiprud

We have a policy where you can pay %75 of the amount due but you have to vacate within two days and never rent from us again, we have a form called Settlement and Release. If they do not follow through then the unit becomes the property of All Storage to dispose of as we see fit. At that point you are not required to re-send certifieds, they have already agreed to relinquish the unit if not paid as promised. Alternately if you have made a verbal agreement to allow them to pay the rest later, then I tell them the unit stays locked and will go into the next auction, then you would re enter them into the next months auction and send a certified with the correct auction date, we are not allowed to add any additional fees for sending and processing auction events, just the rent if it assesses again before the new auction date.

Orkocean

I read "Verbal agreement" and cringed... Our leases specifically state there will be no verbal/oral agreements made, any agreements must be in writing and signed by both parties. Verbal opens up a whole can of "he said/she said" in my opinion.

teamcapitola

We have a "Partial Payment" form that requires a signature. Basically states that by accepting a partial payment the company waives none of it's rights and may continue all Lien enforcement proceedings to their conclusion.

I will negotiate settlements with auction tenants; for an amount usually in the 75% range of what's owed (and in some cases 40-50%) with the tenant vacating the unit same day, we will write off the remaining amount. If I can get more than what I expect the unit to sell for, I'd rather just get rid of them and have the unit to rent.

I rarely do payment plans. It seems that every time I do, I have to deal with the tenant excuses as to why they cant make the entire payment etc..   I do have a payment plan agreement though, and it states that if any payments are missed the unit will be auctioned at the next scheduled sale.

In my 7 years here, I have NEVER received money from an account that went to collections...if it goes to collections we pretty much write it off.

ThriftyStorage

At this facility, once a tenant is in an Auction status, I will only accept all past due rent and late fees; the tenant must move out in 48 hours.

skinman

@teamcapitola I had one person who's unit was auctioned...call 3 weeks later and pay off his remaining balance. He said I had always done right by him and life just got in the way. I actually told him his remaining balance would not be sent to collections and as far as I was concerned the matter was closed. He said he needed to do the right thing for me, apologized, and paid it off anyway. 

monicar3

I don't offer partial payments, tenants will never catch up.      

Prime

ThriftyStorage said:

I agree with Skinman! I tell many tenants ," they are responsible for what happens to their unit." I am not here to baby sit and hold grown folks hand. People will pay for what is important to them!!!

That's how I am ThriftyStorage, When we move people in they now the rules if they didn't pay attention not our fault. 

khemnis

My policy is to work with the tenants.  Even the ones that get behind all the time.  We have certain rules that we don't bend...like we only waive one late fee a year.  But we do work with people on their payments to keep from auctioning them.  I have MAYBE two auctions a year.  And the auctions I have usually end up being people who completely disappear.  People almost always pay us what they owe.  I'm always kind and respectful and understanding of their situation and have zero attitude or judgement when I talk to them.  I do this for a couple of reasons and is best described with one tenant.  There was a tenant that had 3 units with me.  I had everything she owned basically.  She was perpetually behind and would constantly wait until she was in auction and then she'd bring me a huge sum of money and I'd remove her.  She'd pay a few times.  Get behind.  I'd put her in auction.  Rinse and repeat.  She eventually got a new home and paid off her units and moved everything out.  But not until she'd been there for 6 years and paid me THOUSANDS in late fees and auction fees.  She also paid me thousands in rent for those years she was there.  You only get a handful of people that don't pay on time and for me it's worth the extra revenue.  I also look at it from a potential lawsuit perspective.  As a last ditch effort on the few that remain in auction and I can locate them, I offer them a buy out.  They pay a percentage owed and they move their stuff out by a certain day during office hours.  We never get as much at auction as I do with a buy out and who's going to sue me for letting them pay me less and move their stuff out?   Sure it's a pain some times and I do get irritated having to talk to the same people over and over, but I end up being the good guy.  When I work with them or offer them a buy out I get mushy word of mouth.  People who gush over how helpful I am and how great the facility is because I worked with them and saved their stuff.  It makes a huge difference when people talk to their friends who are looking for a storage facility.  I like to help people and it makes me feel good to hear them say nice things, but I get just as much of a thrill from looking at my management summary and seeing what I've collected in extra revenue and hearing how that person told this person about how great the facility was and they decided to rent from us.

websterb

@khemni, i totally agree with your outlook. Most tenants do not intend n falling behind but it happens.

billheyden

Ideas! I am having resistant on my collections right now. Seems no one cares about there stuff. My assistant and I are both good negotiators and collection callers. We call and email every other day. Work with the good ones. I'm I missing something.

Orkocean

Personally and what I found works best for us is not to work with them. When you make deals and give breaks it teaches the customers to expect it everytime. If you are firm and stick to your guns on enforcing fee's and auction schedules they learn to pay on time or pay the price, their choice. Also it helps incase customers know each other so you never have to face a situation where customer A told customer B how much you let them get away with and now they expect the same or else you're giving special treatment etc. etc.. I've sent my own brother in law's car to the auction process before, it's a business and it needs to be operated as one.

i43storage

If they have official "gone to lien" they need to pay 100% cash to stop the auction.  I've tried it the other way and it always ends in more headache.

Clyde_Lord_Jr

Sometimes you just have to take the emotion out of it. When they are signing their paperwork, I point out the no partial payments and the possible auction scenarios. Of course no one reads that once they leave but they agree to the terms. Auctions are a last resort and part of the business. 

GSS

We don't take partial payments unless it involves a prorated amount. 

With tenants who are in lien some exceptions may be applied. For an example, if John Doe is in Lien for June and it is now July 15th but he can only pay for Mays late rent plus its fees, we will sometimes accept that. But most of the time we tell them that the full amount must be paid so they become current. 

LockTiteBT

@khemnis Do you have paperwork for the buy out process for those in auction? Would you mind sharing what your form looks like if you have one?

teamcapitola

All this talk about Auctions and Partial Payments....  I JUST found out the Collection Company we use has just up and disappeared! Not that we are owed anything, but I'm mad at the time spent creating the damn database!

I'm going to start a new thread about collections & collection companies, and I hope all of you chime in!

Robyn

We never allow partial payments.  What we do allow the tenant to do is make a payment plan for the remaining owed fees. For example, the tenant is 2 months behind in rent for a total of $100.00 and has fees in the total of $170.00.  I require the tenant to pay the total rent owed and will make a payment plan for the remaining $170.00 to be paid within 30 days.  The are able to break up the payments in to 3 separate payments, but  each payment has a due date that the tenant chose.  If any payment is late, the balance is due in full and no remaining payment plans will be allowed in the future. 

ESS

sonyawiprud said:

We have a policy where you can pay %75 of the amount due but you have to vacate within two days and never rent from us again, we have a form called Settlement and Release. If they do not follow through then the unit becomes the property of All Storage to dispose of as we see fit. At that point you are not required to re-send certifieds, they have already agreed to relinquish the unit if not paid as promised. Alternately if you have made a verbal agreement to allow them to pay the rest later, then I tell them the unit stays locked and will go into the next auction, then you would re enter them into the next months auction and send a certified with the correct auction date, we are not allowed to add any additional fees for sending and processing auction events, just the rent if it assesses again before the new auction date.

This is the same thing we utilize at my facility. I offer a payment plan while in auction status and give them so long to pay it off with certain days to make those payments. If one payment is missed or not paid on that date and they don't follow through, they relinquish the unit to us. I make sure to include that on the signed payment plan agreement. It's usually 75% of balance owed and they have to be vacated by the end of that month.