If you are looking for a sample promissory note for rent, you’ve come to the right place. A promissory note is a legal instrument that can be used whenever there is a financial transaction between two parties at a future date or at the demand of the loaner under certain conditions. Besides rentals, promissory notes can be used for car purchases, employee loans, student loans and even personal loans between family and friends. If you fail to uphold the stipulations of a signed promissory note, you may be subjected to fines and brought to the court of law depending on the specific conditions on the note.
There are just a few mandatory components that must be clearly stated when drafting a promissory note. These include the names of the loaner and borrower, the amount of rent that is due, date of when the rent is due, date of when the promissory note was signed, and the consequences of not upholding the promissory note and failing to pay on the due date. Below is a sample promissory note for rent that you can provide to your tenant.
Sample Late Rent Agreement Letter
I, John Doe, promise to pay Jane Doefor past due rent in the sum of $750.00. Repayment of the rent will be made in three equal payments at 5% interest or $787.50 payable on the 15th of every month, starting on August 15th, 2013.
Being unable to pay the rent in a timely manner will result in an additional 5% in penalties on top of the original amount and interests rate (Make sure to check your state laws and regulations before stipulating any fine in your promissory note).
John Doe, (Tenant) Jane Doe, (Landlord)
July 20, 2013, (Date) July 20, 2013, (Date)
Before Writing the Promissory Note for Rent
Before you write it up, you should check with your local state laws to see if you can actually charge interest on late rent. For example, in the state of California you can charge up to 10% interest, but nothing higher. In the state of Massachusetts you can only charge interest rate after 30 days. In the state of Oregon, you can only charge interest on late rent if was originally stipulated in the lease agreement. Since the laws vary by state, it best to consult a lawyer before writing up your promissory note.
Another thing to keep in mind is if you want the tenant to pay in installments or all at once. While any landlord would love to receive late rent payments in full as soon as possible, it will be more difficult for the tenant to do this if he or she is already behind on their rent. Ask for a reason why the tenant could not meet his or her payment period. Did the tenant recently lose their job? Does the tenant have personal problems like a death in the family? Most tenants will provide a legitimate reason and the late payment will hopefully be a one-time occurrence. In this case, it might be reasonable to provide monthly installment plans to facilitate the repayment process. However, if the tenant is constantly late in his/her payments, it might be best to hire a lawyer to deal with the issue. In order to avoid the problem of late rent, it is imperative that landlords conduct credit history checks on all potential tenants. Accepting tenants with good credit will save you a ton of headache, time, and money in the long run.