Is this a simple rule change? I spoke with an attorney today who told me that I could not technically refuse cash. That sounds fishy. One of my fellow park owners has his tenants mail in checks. Is it wise to allow and take a mix of payments such as checks and money orders?
No cash ( find a new attorney ), money orders or checks are what you want
There are some states that do demand that you take cash if offered. Not sure which ones. Call your state’s MHA and see if that’s true in your state. The other park owners are not always the best sources of legal advice (some of them break every law every day without even knowing it). The last thing you would want to do is to refuse cash, have it illegal to refuse, and get sued. Your state MHA should know the answer.But remind any customer who pays cash this axiom. If they pay cash, and there is ever a problem years from now on what month they are paying or allegations of them being behind in their rent, they will have NO paper trail to produce and prove their case. FOR THEIR OWN SAFETY, they should only pay with checks and money orders which can be used in court if need be. What if you sell the park three years from now and the new owner suddenly says that they are a month behind and files for eviction? Where’s their paper trail to defend themselves? Sure, they could have cash receipts (if they even properly acknowledge the date of payment, etc.) but the judge may also look at those as too easy to trump up, and go with the computer based report of the owner as a better source of information. It’s seriously in their best interest to NEVER use cash.
We never accept cash. Cash presents a safety risk for your manager, and a theft risk for your P&L. For years the manager of my largest property was an elderly gentleman. I did not want word getting around that “that old guy has $5,000 cash in his hand the first Friday of every month…” Plus, cash is too easy for a manager (or manager’s house guest) to pocket. So cash is a no-no.I think if you explain it this way - that your ‘no cash’ policy is a safety issue, and don’t come across as an ‘overbearing landlord,’ then your tenants will have no problem getting money orders. Money Orders only cost about $0.50 at Walmart, and $1.25 at the Post Office and many other convenient locations , and most of your tenants will be going into the local Walmart or Post Office for something anyway.Good luck,-jl-P.S. An added benefit of not accepting cash is that I think that policy would also help you in the event you are ever audited by the IRS. If everyone in the park will testify that you are not taking cash out of the property, then it should be pretty obvious that you are recognizing all the income you should and are paying your taxes. So do the right thing for yourself and for your managers’ safety and never accept cash and pay all your taxes.
If there’s a bank in town, have them deposit their rent. If you can see their deposit slips online, its easy. Only disadvantage is that you can’t kick back a partial payment, but other than that, its a no-brainer.
Well us small operators (owner-mangers) gladly accept cash and give a receipt of the amount and the time and keep the receipt books. In forty years NO THEIF–we stay out of large cities and enjoy a middle to upper class residents.