Pre-dated checks for a sublet. Sketchy?
April 20, 2008 9:08 AM Subscribe
I'm subletting an apartment for the summer (June-August). Is it sketchy to be asked to give the original lessee three checks—two pre-dated for July 1st and August 1st respectively—at the signing? It seems slightly odd, but not necessarily sketchy.
The lessee says that she'll cash the checks (after the date they are pre-dated for) in order to pay the renting agency.
Of course, the bank shouldn't cash the checks before the date on each, but do most banks actually check that date?
I'm pretty trusting of the lessee and it seems like a reasonable way to pay her, but I do want to make sure that I'm not falling for a common scam. Thoughts?
The lessee says that she'll cash the checks (after the date they are pre-dated for) in order to pay the renting agency.
Of course, the bank shouldn't cash the checks before the date on each, but do most banks actually check that date?
I'm pretty trusting of the lessee and it seems like a reasonable way to pay her, but I do want to make sure that I'm not falling for a common scam. Thoughts?
If she cashed all three checks right now, would you be able to cover it with the money in your checking account?
posted by box at 9:09 AM on April 20, 2008
posted by box at 9:09 AM on April 20, 2008
Of course, the bank shouldn't cash the checks before the date on each, but do most banks actually check that date?
There's probably no requirement on the bank not to cash post-dated checks. And they probably won't check either.
posted by grouse at 9:17 AM on April 20, 2008 [1 favorite]
There's probably no requirement on the bank not to cash post-dated checks. And they probably won't check either.
posted by grouse at 9:17 AM on April 20, 2008 [1 favorite]
From a recent post I believe that banks cash post dated checks whenever they are cashed. AKA post dating doesn't do anything.
She'd be more honest in asking you for all three months up front. Which would kinda suck. But I could understand it in certain markets, she could probably expect people to do that.
posted by sully75 at 9:21 AM on April 20, 2008
She'd be more honest in asking you for all three months up front. Which would kinda suck. But I could understand it in certain markets, she could probably expect people to do that.
posted by sully75 at 9:21 AM on April 20, 2008
Yes, it's totally sketchy. I don't know if it's a common scam or not, but it seems like either she trusts you or she doesn't and this is implying that she doesn't. A bank can easily cash post-dated checks. A few scenarios to consider:
- what if she deposits all the checks now?
- what if you have some HUGE problem with the sublet (or some other way) and need to leave and she still cashes the checks?
- what if she loses the checks you gave her?
If this were me, this is an arrangement I would either not enter in to, or would find another way to put her mind at ease without a potentially problematic situation.
posted by jessamyn at 9:21 AM on April 20, 2008
- what if she deposits all the checks now?
- what if you have some HUGE problem with the sublet (or some other way) and need to leave and she still cashes the checks?
- what if she loses the checks you gave her?
If this were me, this is an arrangement I would either not enter in to, or would find another way to put her mind at ease without a potentially problematic situation.
posted by jessamyn at 9:21 AM on April 20, 2008
Look at it from the lessee's point of view: maybe she doesn't fully trust you to pay each month's rent on time. If you can afford it, I'd just pay her for all three months up front. It'll probably ease both of your minds.
posted by LolaGeek at 9:24 AM on April 20, 2008
posted by LolaGeek at 9:24 AM on April 20, 2008
I am also subletting for the first time this summer and the current tenant is requiring me to pay all three months up front as well as cover their deposit which will come back to me from the landlord once the sublet is up.
posted by stevechemist at 9:26 AM on April 20, 2008
posted by stevechemist at 9:26 AM on April 20, 2008
Hmm, I can understand why she'd want that - after all, subletting can be a risky business itself - but on the other hand I completely see why this would seem sketchy to you, too ... it DOES sound like you'd be taking a chance here. Maybe she just doesn't realize that banks disregard post dating, maybe you could talk to her about that in explaining why you're uneasy about the whole thing?
Otherwise, if you're sure you want to live there, could you perhaps arrange to have the money held in escrow? I'm honestly not sure if that would work or not but it sounds like it -could- be a viable option to keep both of you relatively protected, unless anybody else knows why that wouldn't work ... ?
posted by zeph at 9:41 AM on April 20, 2008
Otherwise, if you're sure you want to live there, could you perhaps arrange to have the money held in escrow? I'm honestly not sure if that would work or not but it sounds like it -could- be a viable option to keep both of you relatively protected, unless anybody else knows why that wouldn't work ... ?
posted by zeph at 9:41 AM on April 20, 2008
You're over thinking this. It's a little unusual, but it's unlikely to be a scam (at least, not a good one). Considering that you're a first time renter with no credit (and she's a first time landlord, who's going to be out of town, and could be really screwed if you didn't pay). Would you rather she collect first month, last month, and a month's security deposit up front, for a three month lease?
Think about it for a minute... What's in it for her if she attempts to cash all your checks now? Some of them bounce, you owe your bank... but she doesn't get the money from the bounced check, she's pissed off her tenant/friend, and she doesn't have the cash to pay the landlord with whom she's still got a lease.
Or, one of the banks intercepts the check for being post-dated (it happens, and with the modern OCR systems that facilitate Check21, it happens more often than it used to), and she doesn't get the money -- with similar consequences.
But, even though you "trust" her, and even though this isn't a scam, do yourself a favor, and at least put all of this in writing, and have both of you sign and date it (Just write down that you gave her checks # 1001,1002,and1004, each for $xxx, and that she will not cash them before the following dates, and that you both have agreed to this). It's an easy piece of insurance (and a receipt for your rent checks), and if she then turns around and does something stupid, you've got something that you'll be able to take to the property owner, bank, and small claims judge. -- but it won't get to that.
posted by toxic at 9:43 AM on April 20, 2008 [1 favorite]
Think about it for a minute... What's in it for her if she attempts to cash all your checks now? Some of them bounce, you owe your bank... but she doesn't get the money from the bounced check, she's pissed off her tenant/friend, and she doesn't have the cash to pay the landlord with whom she's still got a lease.
Or, one of the banks intercepts the check for being post-dated (it happens, and with the modern OCR systems that facilitate Check21, it happens more often than it used to), and she doesn't get the money -- with similar consequences.
But, even though you "trust" her, and even though this isn't a scam, do yourself a favor, and at least put all of this in writing, and have both of you sign and date it (Just write down that you gave her checks # 1001,1002,and1004, each for $xxx, and that she will not cash them before the following dates, and that you both have agreed to this). It's an easy piece of insurance (and a receipt for your rent checks), and if she then turns around and does something stupid, you've got something that you'll be able to take to the property owner, bank, and small claims judge. -- but it won't get to that.
posted by toxic at 9:43 AM on April 20, 2008 [1 favorite]
There's no reason for her to ask you for checks in advance if she's promising to not cash them in advance. What's the point? If you wanted to scam her you could always just tell your bank to stop payment, so she's not really protecting herself from anything. It's like airport security theater; it just makes her *think* she's more secure.
Anyway, according to section 4-401 of the Uniform Commercial Code, there's a legal way to make sure she can't cash the checks in advance: Notify your bank of the post-dating in plenty of time to make sure you give the bank a "reasonable opportunity" to catch the error before it happens. If you've given notice of the post-dated items and the bank still cashes the checks early, the bank is liable for any fees, damages, etc. you may incur. Check with your bank to make sure my NOT-AN-ACCOUNTANT advice is correct, then give proper notice to them in writing. This way you don't have to deal with her on this at all.
Or, you can politely tell her your family's accountant made you promise never to postdate checks, tell her she'll have the checks in hand by the first of each month (which means you promise to mail them out on the 25th of the previous month or something), and tell her no one you've spoken with in your family has ever been asked to postdate checks like this and it doesn't feel right. But notifying the bank seems easier.
It's usually called post-dating, not pre-dating, btw
posted by mediareport at 9:54 AM on April 20, 2008 [1 favorite]
Anyway, according to section 4-401 of the Uniform Commercial Code, there's a legal way to make sure she can't cash the checks in advance: Notify your bank of the post-dating in plenty of time to make sure you give the bank a "reasonable opportunity" to catch the error before it happens. If you've given notice of the post-dated items and the bank still cashes the checks early, the bank is liable for any fees, damages, etc. you may incur. Check with your bank to make sure my NOT-AN-ACCOUNTANT advice is correct, then give proper notice to them in writing. This way you don't have to deal with her on this at all.
Or, you can politely tell her your family's accountant made you promise never to postdate checks, tell her she'll have the checks in hand by the first of each month (which means you promise to mail them out on the 25th of the previous month or something), and tell her no one you've spoken with in your family has ever been asked to postdate checks like this and it doesn't feel right. But notifying the bank seems easier.
It's usually called post-dating, not pre-dating, btw
posted by mediareport at 9:54 AM on April 20, 2008 [1 favorite]
I agree that it's unusual, but doesn't sound like a scam. I would put a note on the memo line of each check, Saying " June Rent" on one, "July Rent" on another, and "August rent" on the last.
this may be enough to give you a contract with your "landlord" that could possibly be enforcable in small claims court.
posted by Mr_Chips at 9:55 AM on April 20, 2008
this may be enough to give you a contract with your "landlord" that could possibly be enforcable in small claims court.
posted by Mr_Chips at 9:55 AM on April 20, 2008
Several people I know who are subletting their apartments for the summer have asked for the entire sum in cash up front, so I'm not necessarily certain that this is a bad thing.
posted by arnicae at 10:00 AM on April 20, 2008
posted by arnicae at 10:00 AM on April 20, 2008
my bank onced bounced a check i wrote because it was far out of sequence.
I almost never write checks other than sitting at my desk paying bills, but i do keep one in my car for emergencies. when i used this "emergency " check the number was like 500, but all the other checks i had recently written were in the 600's, so my bank bounced it, even though there was plenty of dough in the account.
posted by Mr_Chips at 10:00 AM on April 20, 2008
I almost never write checks other than sitting at my desk paying bills, but i do keep one in my car for emergencies. when i used this "emergency " check the number was like 500, but all the other checks i had recently written were in the 600's, so my bank bounced it, even though there was plenty of dough in the account.
posted by Mr_Chips at 10:00 AM on April 20, 2008
Do a metafilter search for roommate or tenant and you'll understand why she wants those checks.
She wants to cover her ass, you want to cover yours. You need to find a middle ground where you're both happy - and the 3 checks up front is probably that middle ground. From her perspective she wants a guarantee that you'll pay the rent, the best way for her to get that is to have 3 months rent up front, which most people wouldn't agree to.
You still have most of the power in this arrangement. You can call the bank and stop the checks or you can move the money out of your account so she can't take it.
If it were me I'd set up a separate bank account that only holds enough cash for 1 months rent and write the checks from that account. That prevents her from taking money early.
posted by missmagenta at 10:06 AM on April 20, 2008
She wants to cover her ass, you want to cover yours. You need to find a middle ground where you're both happy - and the 3 checks up front is probably that middle ground. From her perspective she wants a guarantee that you'll pay the rent, the best way for her to get that is to have 3 months rent up front, which most people wouldn't agree to.
You still have most of the power in this arrangement. You can call the bank and stop the checks or you can move the money out of your account so she can't take it.
If it were me I'd set up a separate bank account that only holds enough cash for 1 months rent and write the checks from that account. That prevents her from taking money early.
posted by missmagenta at 10:06 AM on April 20, 2008
I see no problem with this whatsoever. In fact, I would appreciate it if I were you. No need to think about paying the bill or anything. When I sublet for 6 months, I gave them a few checks (not all 6) up front to hold to cash. THe person letting me the apartment was doing so because they were out of town and they were going to have their mother deposit the checks at the correct time and then the mother would pay the landlord.
If this is a furnished sublet, I would be even more comfortable. They are trusting you with their stuff so you can trust them to hold the check.
What do you think they will do, take the money and change the locks?
posted by JohnnyGunn at 10:14 AM on April 20, 2008
If this is a furnished sublet, I would be even more comfortable. They are trusting you with their stuff so you can trust them to hold the check.
What do you think they will do, take the money and change the locks?
posted by JohnnyGunn at 10:14 AM on April 20, 2008
This would be totally normal in Canada, where banks commonly don't cash post-dated cheques (although a few will slip through the cracks, so you can't count on it). I used to give my landlord a year's worth of post-dated cheques and never thought anything of it. But in the US, where banks don't pay attention to the date on the cheque, you should only give somebody a post-dated check if (a) you have the money to cover it, regardless, or (b) it's somebody you trust absolutely to wait until that date, like, say, your mom.
posted by joannemerriam at 10:17 AM on April 20, 2008
posted by joannemerriam at 10:17 AM on April 20, 2008
If it were me I'd set up a separate bank account that only holds enough cash for 1 months rent
Again: You can notify your bank in advance of the existence of the post-dated checks, which makes the bank responsible for not cashing them before the date listed. No need for a separate account or any other discussion with her. Notify your bank and then smile like the most trusting and helpful sub-leaser in the world as you hand her the post-dated checks.
posted by mediareport at 10:35 AM on April 20, 2008
Again: You can notify your bank in advance of the existence of the post-dated checks, which makes the bank responsible for not cashing them before the date listed. No need for a separate account or any other discussion with her. Notify your bank and then smile like the most trusting and helpful sub-leaser in the world as you hand her the post-dated checks.
posted by mediareport at 10:35 AM on April 20, 2008
I had a landlord that had us do this. Since I had three roommates, it was way easier than reminding everyone to give me their checks and worrying that they got to the landlord on time.
On the other hand, our landlord was a scumbag and never fixed anything or followed through on anything he promised...and since he already had our checks, we couldn't withhold rent as a means of getting him to do his job.
Since this is a summer sublet, and the original lessee is not the one who will be handling any repairs or anything, I wouldn't worry about it and would just go ahead and give her the predated checks.
posted by radioamy at 10:38 AM on April 20, 2008
On the other hand, our landlord was a scumbag and never fixed anything or followed through on anything he promised...and since he already had our checks, we couldn't withhold rent as a means of getting him to do his job.
Since this is a summer sublet, and the original lessee is not the one who will be handling any repairs or anything, I wouldn't worry about it and would just go ahead and give her the predated checks.
posted by radioamy at 10:38 AM on April 20, 2008
MeFi paranoia aside, I'm seconding the people who say it doesn't do her any good to cash them before they're due because it ends up costing her money when the check comes back no good.
You should go ahead and just tell her that you probably won't have enough in there to cover the checks before they're due, but that she's welcome to have the checks up front.
As for the "omg what are you going to do if you have to leave before the lease is up" concern -- just make sure to stop payment on the checks.
posted by toomuchpete at 11:25 AM on April 20, 2008
You should go ahead and just tell her that you probably won't have enough in there to cover the checks before they're due, but that she's welcome to have the checks up front.
As for the "omg what are you going to do if you have to leave before the lease is up" concern -- just make sure to stop payment on the checks.
posted by toomuchpete at 11:25 AM on April 20, 2008
Like joannemerriam said, whether it's normal or not depends on where you live.
posted by trig at 12:50 PM on April 20, 2008
posted by trig at 12:50 PM on April 20, 2008
Some banks will do a post-dated stop payment, i.e, make the checks unpayable until a certain date. This costs the same amount as a regular stop payment though, and you have to do it per check, so it really depends on if you feel it's worth it. The check still bounces and you've pissed off your sublessor regardless.
posted by calistasm at 1:14 PM on April 20, 2008
posted by calistasm at 1:14 PM on April 20, 2008
Also, you should look at the fine print in your account agreement with the bank. Lots of banks could care less about the date on the check and if it's something you agreed to (which you did when you opened the account), you have no recourse.
posted by calistasm at 1:16 PM on April 20, 2008
posted by calistasm at 1:16 PM on April 20, 2008
I did it exactly this way once, but I knew the person who would be doing the depositing was extremely trustworthy (both honest and responsible).
posted by salvia at 2:31 PM on April 20, 2008
posted by salvia at 2:31 PM on April 20, 2008
My daughter wrote a post dated check to a friend who accidentally deposited it and the bank cashed it. I dunno if you should risk it.
posted by konolia at 3:00 PM on April 20, 2008
posted by konolia at 3:00 PM on April 20, 2008
As far as the bank aspect, I think it really depends on the bank as well as the teller. I used to work at a bank (a pretty big one and at a busy branch). As a policy, we are not supposed to accept post-dated checks for deposit or cashing. Sometimes, the tellers didn't check the date and the check is accepted for deposit or cashed. That's just for our bank. I have heard stories from our customers that other banks have cashed their post-dated checks. So I think you shouldn't count on a guarantee that just because the check is postdated, the person won't be able to cash or deposit the check.
posted by state fxn at 9:37 PM on April 20, 2008
posted by state fxn at 9:37 PM on April 20, 2008
You didn't mention what the 3rd check is. June rent? "A security deposit is money which actually belongs to the tenant, but is held by the landlord for protection against damages or unpaid rent. During the first year of a lease, the amount of a security deposit cannot exceed two months rent."
Regardless of what she or you wants to label them, they're deposits. First plus deposit is very standard; 2x months' rent for a deposit is either standard or an outrage depending on individual town/neighborhood. For a tenant who doesn't have a rental history (and, I'm going to guess, is just beginning to establish a credit history), it's more common. So the amount is fine, unless she's charging any deposits above this.
However, labeling it this way, and holding the checks so far in advance, is unusual and a tad dodgy. Sounds like this is a mom and pop operation. Your rights are probably better protected by making it clear on the checks and lease that these are deposits toward any unpaid rent or damages. On the other hand, potentially she's doing you a favor by letting you keep use of that money a couple months longer than it you paid it as an explicit deposit.
Either way, you should budget with the assumption that all will be cashed right away. Hopefully you can be pleasantly surprised to see they're cashed as dated, but realistically it's only her sense of honor that would enforce the wait.
She doesn't trust you. Do you trust her?
posted by nakedcodemonkey at 10:51 PM on April 20, 2008
Regardless of what she or you wants to label them, they're deposits. First plus deposit is very standard; 2x months' rent for a deposit is either standard or an outrage depending on individual town/neighborhood. For a tenant who doesn't have a rental history (and, I'm going to guess, is just beginning to establish a credit history), it's more common. So the amount is fine, unless she's charging any deposits above this.
However, labeling it this way, and holding the checks so far in advance, is unusual and a tad dodgy. Sounds like this is a mom and pop operation. Your rights are probably better protected by making it clear on the checks and lease that these are deposits toward any unpaid rent or damages. On the other hand, potentially she's doing you a favor by letting you keep use of that money a couple months longer than it you paid it as an explicit deposit.
Either way, you should budget with the assumption that all will be cashed right away. Hopefully you can be pleasantly surprised to see they're cashed as dated, but realistically it's only her sense of honor that would enforce the wait.
She doesn't trust you. Do you trust her?
posted by nakedcodemonkey at 10:51 PM on April 20, 2008
(the quote, btw, is from PA Attorney General's website)
posted by nakedcodemonkey at 10:53 PM on April 20, 2008
posted by nakedcodemonkey at 10:53 PM on April 20, 2008
She basically wants you to pay up front, without actually forcing you to pay upfront. Subleasing is really risky, simply because generally if you are subleasing, you aren't in the areas, and by the time you go through all the legal hoops to evict the person, they would have moved out anyway. The downside to refusing to do this is that she might a) just ask for the all the money upfront; b) go with someone else (when I subleased my place in DC, I marked up the rent 50% and got a subleaser within 10 minutes of posting it on Craigslist, along with about 100 other people, and I had very strict requirements about who I was willing to rent to); c) require a credit check you'll have to pay for; or d) require a co-signer on the lease which will be a pain if you even have someone willing to do it. Yeah, it's a risk, but if you don't think you can easily find another place easily, it's a risk I'd take. A good compromise might be that you will only give one month now and then the other post dated checks the day you move in, so at least you've taken possession before she's taken your money.
posted by whoaali at 11:16 PM on April 20, 2008
posted by whoaali at 11:16 PM on April 20, 2008
My roommate wrote me a check for the rent that should have been dated 03/25/08 or thereabouts. He mistakenly wrote it 08/25/08. I live in NYC and use Wachovia and they would not cash my check under any circumstance. I had to go to my roommate and have him write a new check.
posted by dm_nyc at 7:58 AM on April 21, 2008
posted by dm_nyc at 7:58 AM on April 21, 2008
That's not really a useful anecdote, dm_nyc, since the fact is that there are so many more where the bank would cash the check.
posted by grouse at 8:00 AM on April 21, 2008
posted by grouse at 8:00 AM on April 21, 2008
I've done this before - both as a subletter and as a lessee. Doesn't seem sketchy at all to me.
posted by jrichards at 8:46 AM on April 21, 2008
posted by jrichards at 8:46 AM on April 21, 2008
This thread is closed to new comments.
posted by thebabelfish at 9:08 AM on April 20, 2008