The Sheriff’s Office in Jacksonville, Florida is warning landlords to avoid accepting rent in drop boxes. Officers there are investigating a string of thefts involving drop boxes at apartment complexes throughout the city. The unknown suspects are breaking into the boxes and cashing money orders.
Likewise, California real estate attorneys Kimball, Tirey & St. John LLP recently reported an increase in the number of landlord clients who have experienced drop box thefts.
As lawyers with KTS point out, tenants may have recourse when thieves take checks, but that may not be the case with stolen money orders. That leads to the inevitable question: Who pays for the loss?
Tenants — and their lawyers — may argue that depositing the rent into a drop box provided by the landlord means rent was paid, and the loss would transfer to the landlord who had control over the security of the box, including collection times. If the lease sanctions this method of payment, that could bolster a tenant’s argument.
But that’s not the whole story. The tenant may have been negligent in some manner, like leaving blank lines on a check or money order, making it more susceptible to fraud. A bank that accepts a forged or altered check may be liable for repayment. Depending upon the method of payment, the tenant may have a way to get the money back, and then make good on the rent payment.
Weeks may go by while a drop box theft is being investigated and a tenant makes any possible claims for the money. During that time, a landlord may need to forgo charging late fees or threatening to evict the tenant. Reducing any potential losses may require working closely with the tenant and the police.
Both the Jacksonville Sheriff and Kimball, Tirey & St. John LLP recommend landlords avoid drop box disputes by having renters physically hand in rent payments to apartment office personnel, or by using any of the available online payment systems.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.
