Tenant claims they paid rent in cash and that it was stolen from a mailbox. What should I do?

Question

I own a duplex, live in half, and rent out the other half to college students. I have just made a mistake that cost me $750.

One of my tenants was late paying her rent. I'd thought it was still late, but she informed me that she put it (roughly $750 in cash) in my mailbox while I was out of town for three weeks. She claims she told me that she was doing so, but she did not. (I certainly would have asked her not to!) Anyway, the money was not there when I returned and I am out $750.

One lesson I have learned is to insist on either a check or cash payment in person. (And, to not let late payments slide for some reason.) But in the meantime, I am out $750 and I have to decide what to do about it. I see at least three options:

Eat the loss. Annoying, although I can afford it.
Say that I never received the rent and insist on its payment.
Report the theft of $750 to my home insurer. (I am not sure if they would pay such a claim, or if my premiums would go up.)

I am guessing that I am stuck with (1) but I am wondering if (2), (3), or something else might be a realistic option? (I might add that I'm not prepared to go to court.)

Update. Thanks to everyone for their responses. After reading here, and also getting advice from a local property management company, I decided to ask for the payment in full, but say that I don't need it right away. We haven't made arrangements yet, but my tenant has acknowledged responsibility and it seems that I've avoided burning any bridges.

I also hired the property management company. I am leaving town for six months next year, so this was about to become a necessity soon anyway, but I immediately realized that for someone as scatterbrained as me their services are a godsend and I should have hired them long ago. This situation never would have occured if I'd done so. I've made it clear that keeping the tenants happy and maintaining the property in good condition are my first priorities, and that I will be backing these claims up with my pocketbook.

On a side note, it is illegal for anyone other than a postal worker to put something in your mailbox. — John Wu, Oct 04 '16 at 06:47
Thanks to all. Some answers to your questions: I have not been writing receipts for rent, although perhaps I should start. There is no lock on the mailbox, a thief could just walk up and take whatever is in there without difficulty. And I live next door in the same duplex, so insisting that cash payments be made only in person seems like the easiest solution for the future (but please let me know if I am missing anything). — Anonymous, Oct 04 '16 at 12:11
@Snowman: It says that payments will be made by check or "certified funds". (I don't know what "certified funds" are; I used a boilerplate residential lease for my state which I found on the internet.) That said, I did accept cash in payment of rent from the same tenant previously. — Anonymous, Oct 04 '16 at 17:17
My opinion might be different if I knew your tenant, but this sounds like a con to me. The giveaway is that the tenant forced you to essentially call her a liar in order to contest her story by claiming she told you she was going to do this. This is a gaslighting technique. — David Schwartz, Oct 04 '16 at 17:48
Comments are not for extended discussion; this conversation has been moved to chat. Further comments are likely to be pruned aggressively. — GS - Apologise to Monica, Oct 05 '16 at 18:52
This makes no sense. If they didn't hand it to you and you didn't write a receipt then the payment didn't happen. I as a renter would always ask the landlord to give me the receipt the moment I shell out my money, otherwise I wouldn't hand out the money. That's common sense. — xji, Oct 14 '16 at 15:06

score 194 · Answer 1 · answered Oct 03 '16 at 21:33

I'd say your tenant is out $750, not you. How you handle it is totally personal preference.

If you want to be the super-nice landlord and eat the loss this one time, then you might gain some karma and hopefully they'll be awesome tenants for the remainder of their stay. Are they the kind of tenants you want to be nice to because they deserve it?

You (and she) have no way to prove she ever actually tried to pay you. Sound like she is learning a $750 lesson. "Don't leave cash in a mailbox, and always get a receipt for rent paid."

Your insurance company would likely not pay out as it'd be below a typical deductible and you can't really prove the money ever existed. You'd be better off just taking the loss.

Think about it this way: How would you expect a bank or utility company to respond to this situation? "Yeah, I left my mortgage as a cash-filled envelope on your doorstep. You didn't get it? I told you I'd do it!" Guess who's paying double mortgage and a late fee?

You're not stuck with option 1, you're choosing to do it. She could refuse and fight you on it, which might not be worth the headache and potential small-claims court. But you're entitled to receive the rent and she is obligated to pay it. And "paying it" means making sure you actually receive it.

Option 1.5: Point out that you could demand she pay in full, but offer to split the loss this once. — keshlam, Oct 03 '16 at 23:07
+1 For discouraging an insurance claim. The rise in premiums could easily exceed $750, each year onward! Claims (whether they paid or not!) usually remain on your loss history for 3-5 years. — unknownprotocol, Oct 04 '16 at 00:21
Comments are not for extended discussion; this conversation has been moved to chat. — GS - Apologise to Monica, Oct 06 '16 at 17:36

keshlam · Answer 2 · 2016-10-04T02:18:31.230

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Cash should never have been placed in the mailbox in the first place; this is what checks are for.

I would be a bit surprised if that constitutes your accepting payment, but I Am Not A Lawyer. You need local legal advice; this is the sort of thing where local rulings matter.

Definitely report the missing money to the police, no matter what else you do. You do not have to give them an opinion on whether this was a theft or an attempted fraud; just give them the facts that the tenant says they left money in the box but you didn't find it there.

edited Oct 04 '16 at 02:18

answered Oct 03 '16 at 21:27

keshlam

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Comments are not for extended discussion; this conversation has been moved to chat. – GS - Apologise to Monica Oct 06 '16 at 17:35

score 66 · Answer 3 · answered Oct 04 '16 at 14:55

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This is fairly simple, actually. You should insist on payment for the rent payment you never received and stop accepting cash payments.

If you want to be nice, and believe the story, allow the tenant additional time or payment in installments for the missing $750, but this is a textbook example of why it's a bad idea to transact with cash. Insist on cash equivalents that are traceable and verifiable - check, money order or cashier's check, made out to you or your company name.

Also, for what it's worth, you are not out $750, unless you choose to be. Your tenant is. "I put cash in your mailbox" is not proof of payment, and doesn't fly as payment anywhere. If it did, I'd never pay any of my bills.

answered Oct 04 '16 at 14:55

HopelessN00b

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Comments are not for extended discussion; this conversation has been moved to chat. – GS - Apologise to Monica Oct 05 '16 at 16:33
If you do accept cash, accept it only in person. And issue the tenant a receipt for that payment (while keeping a copy of that receipt for yourself); that provides some protection for both of you. If they don't have the receipt, payment was not made, period. Note that this is another reason checks and credit card are usually preferred; they automatically establis a paper trail – keshlam Jul 31 '23 at 02:51

XtrmJosh · Answer 4 · 2016-10-05T22:44:15.253

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I used to be the sort of person who would tell you that I've left money for you somewhere and in fact not have done so, and I also used to be the last person you'd expect to do something like that. I've not done this exact thing but I've done similar. Not gonna go into detail but at that time I was in a state of poverty, barely able to buy food and drink, and the money I saved by "conning people" in similar ways was spent on food and warmth.

Personally, I think she's going through a very hard patch financially and as such has done exactly that. Me? I'm not a landlord and I'm probably far too generous. I would explain that I think she's lying but let it slide this month. Clearly a property owner is more financially capable of soaking up this expense than a tenant.

On the other hand, you don't become a property owner and landlord by letting people get away without paying their rent.

All in all, I would probably push for a 50/50 decision. She pays half rent this month which alleviates her finances a bit if she is genuinely in trouble and has lied, and you still get something for your efforts. If you're lucky, when you suggest it she will come clean. I would make it clear if you do or don't believe her, as she may well confess if you express your doubts. If she does, I wouldn't hold her to paying the full amount unless she offers to do so.

Also, make it very obvious that this can and will not happen again. Next time, she gives you cash or uses a banking service. Goes without saying I guess.

You should note that legally speaking, by accepting anything other than full payment you could be acknowledging that she did attempt to make a payment and any future legal cases will not consider that favorably for you. I would strongly recommend discussing this with a solicitor before agreeing to anything other than full payment.

edited Oct 05 '16 at 22:44

answered Oct 04 '16 at 10:48

XtrmJosh

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I don't like this 50/50 solution exactly because of what you say in the last sentence. – Dmitry Grigoryev Oct 04 '16 at 12:38
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Sadly that comes entirely down to a level of personal relationship involved. If she's otherwise a flawless tenant with no history of bad finance, it can be let to slip, but OP will consider that naturally when looking at the options. If they are otherwise spotless, I would have no concern as long as it was made perfectly clear that this situation was not to happen again... I suppose there is also the option to draw up an extension to the contract to cover the one month, which could cover this case perfectly and save future legal concerns. – XtrmJosh Oct 04 '16 at 12:41
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"Clearly a property owner is more financially capable of soaking up this expense than a tenant. " That seems like a rather one-sided view, and I wouldn't expect it to be true in most cases where a private party is renting their property. – Andy Oct 05 '16 at 13:40
Comments are not for extended discussion; this conversation has been moved to chat. – GS - Apologise to Monica Oct 06 '16 at 07:32
"by accepting anything other than full payment you could be acknowledging that she did attempt to make a payment and any future legal cases will not consider that favorably for you" In the US, and more specifically in California, accepting partial payment would not affect you negatively. It would be best to get the partial payment information in writing. If you have the lease or rental agreement in writing it should be very clear that a partial payment did not satisfy the full amount owed. – Kevin H Oct 07 '16 at 05:00
@KevinH I'd suggest that in the majority of places it does affect you negatively, and as such the advice to find out is important enough that it does belong. I mean, worst case scenario OP will waste a small amount of money on legal advice. Better that than losing a huge amount of money courtesy of ignorance. – XtrmJosh Oct 14 '16 at 00:01

score 29 · Answer 5 · answered Oct 08 '16 at 08:58

It's very possible that someone would lie to their landlord/landlady, but not be prepared to lie to the police. So here's what I would do.

Advise your tenant that since her money has been stolen from your letterbox, she should report the theft to the police.

If she refuses to report the theft to the police, then her story is probably a lie. In which case, treat the rent as deliquent and demand payment in full. Invoke whatever kind of recourse is available in your jurisdiction.

If she goes ahead and reports the theft, then it's very likely that her story is true. It's probably in your interest to stay on good terms with such a tenant, so you could offer to split the loss with her. But let her know that this is a one-time offer, and you won't be so generous again.

score 10 · Answer 6 · answered Oct 06 '16 at 17:06

This does sound a bit implausible, even if it is true it is pretty grossly irresponsible and you probably shouldn't just let it slide...

However there is no real benefit in wading in with accusations, I suspect that the most likely scenario is that your tenet simply didn't have the money and was looking for a way to delay payment. This may well not be particularly malicious towards you, they may just be unable to pay and need a bit of room to maneuver.

In this case the wise thing is to challenge them but without forcing them to admit that they might have lied, perhaps by suggesting that they might have been mistaken about dropping off the money but it's no big deal and negotiate a resolution. In these situations where it is one persons word against another giving them the opportunity to save face often pays off.

Equally you want to make it absolutely clear that putting a wad of cash in your mailbox is not an acceptable way to pay.

I really like this answer...from the sentiment behind it, the empathy toward the renter, and the goal of protecting the property owner's financial stake, while tactfully attempting to side-step escalation and conflict. — elrobis, Oct 10 '16 at 14:45

score 6 · Answer 7 · answered Oct 04 '16 at 20:19

Your tenant made a mistake. You deal with this exactly as you would deal with a delinquent tenant, which is a hard and sticky question that involves you, your lease, your relationship with the tenant, your priorities, your values, local laws, your estimation of tenant's honest and creditworthiness, and so forth.

It's not an easy question. It just falls under the question of how to deal with delinquency that happens to involve the circumstance of allegedly paying cash and having it stolen, which is a hard question.

NuWin · Answer 8 · 2016-10-05T01:20:29.727

I don't have a crystal ball but chances are your tenant is definitely lying. Rent was late and now the money intended to cover the rent; miraculously is lost in the mailbox.

Anyhow, you were already nice to tolerate the late "payment". Keshlam's option 1.5 in the comments above is the ideal way to settle in which both parties have learned a lesson and are at a loss. Demand the rent payment but settle for half as a one time courtesy.

If this continues or this tenant has shown shady predicaments such as this, you should look for legal means to evict this tenant.

College students are very creative and who's to say this won't happen again? "The neighbors dog took my wallet."

score 3 · Answer 9 · edited Oct 04 '16 at 17:08

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Personally, it is the tenant's stupidity to leave cash and not get a receipt. If it were me, I would demand payment. But then $750 to me is a lot more than it may be to others. This is entirely a personal decision, legally I don't think the tenant has a leg to stand on because they have no proof they actually paid you, regardless of how or where they 'left it'.

edited Oct 04 '16 at 17:08

BobbyScon

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answered Oct 04 '16 at 16:54

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score 2 · Answer 10 · answered Oct 10 '16 at 23:23

Question: I live in half of a duplex together with other college students. I put my rent (roughly $750 in cash) in the landlord's mailbox while he was out of town for three weeks. I told him ahead that I would do this, but he claims I never did, and he would have asked me not to. Anyway, now he claims the money was not there when he returned and I still owe $750.

Answer: Well, that's tough. It could be that the money was stolen from the mailbox. It could be that the landlord pocketed the money and is trying to scam you. Your problem is that you have no receipt, and no evidence at all that you paid the money. There's little you can do other than paying up (again) and learning from this expensive lesson.

score 1 · Answer 11 · edited Oct 10 '16 at 19:26

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It sounds extremely fishy to me. Who has $750 in cash in his pocket and uses it to pay rent??

I would ask the tenant to show a statement from her checking account which shows that she took out that much cash in the days before the 'payment', and if she cannot provide it (or another convincing explanation), I would consider it a lie and request payment.

edited Oct 10 '16 at 19:26

JTP - Apologise to Monica

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answered Oct 03 '16 at 21:34

Aganju

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I have to disagree. I know plenty of people who pay rent with cash, and none of them would ever be willing to share account/transaction info with a landlord (if they even have a bank account at all). If they pay with cash, they should demand a receipt. Some people, even in this day and age, don't have checking accounts and do everything with cash. – BobbyScon Oct 03 '16 at 21:37
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True, but if you do everything with cash, it's your responsiblity if you leave the cash unattended and it goes "poof". – keshlam Oct 03 '16 at 23:06
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While a good idea on paper, what's to stop a malicious tenant from actually making a cash withdrawal for $750 "for the record", and just keeping the cash around or in some other account, and still claim it was left in the mailbox? – unknownprotocol Oct 04 '16 at 00:25
Comments are not for extended discussion; this conversation has been moved to chat. – GS - Apologise to Monica Oct 05 '16 at 19:22

End Anti-Semitic Hate · Answer 12 · 2016-10-12T04:49:34.007

Since the tenant reportedly left money in your mailbox, and now the money is missing, a crime must have been committed. As such, have her file a report with law enforcement and provide you with a copy of that report.

Remind her that, for her safety, it is best to file the report during daylight hours with other people present.

You didn't make it clear to your tenant the methods in which she could provide payment. That was a mistake. At the same time, her decision to leave cash in a mailbox was foolish.

If she is willing to file a report with law enforcement and provide you with a copy, tell her that you will split the loss and only require half her rent as a one-time courtesy. Make it clear that you are losing half the money too.

If she is not willing to file a report, require the full rent.

Tenant claims they paid rent in cash and that it was stolen from a mailbox. What should I do?

12 Answers12