What to do when your tenant bounces a check!

If you own rental property,chances are at least once during your ownership, one day your bank will return the rental payment of your tenant for insufficient funds, or perhaps as the result of a bank error.  When that happens, what should you do and how should you document the event? 

 

First, look at your rental agreement with your tenant.  If you have a good rental agreement, the agreement will spell out what happens.  Most rental agreements allow you to charge a reasonable fee to reimburse you for the cost of the returned item that your bank will charge you, and perhaps a bit more to cover the value of your time in dealing with the returned item, documenting the return, processing the replacement payment and/or going to the bank for the replacement deposit. 

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