we at domu strongly believe in the notion that tenants should be required to pay their rent by check and not with cash.  there’s always going to be an unlucky landlord who not-so-coincidentally gets robbed at the precise moment that his pockets are flush with freshly-collected rent dollars.

but, unlike cash, checks are susceptible to bouncing, and banks have a way of collecting fees on bounced checks.  when a tenant bounces a check, the landlord is typically assessed a returned-check charge by the bank in which it deposited (or attempted to deposit) the funds.  fortunately, for just these occasions, illinois vests the payee (in this case, the landlord) with the right to sue the tenant for $25.00 plus court costs and attorneys’ fees, after the payee (or landlord) sends the tenant a statutorily-mandated nasty-gram and gives him thirty days to make good on the original payment. so basically, to end up whole, you need to endure a ton of hassle.

the easiest way to handle this is to ensure that the lease includes a provision specifying that the tenant “shall pay” a fixed fee (the domu model lease says 50 smackers) in the event that a check is returned for insufficient funds.  courts are hostile to penalties, so the fifty bucks is there to compensate the landlord for the charges assessed by its own bank, along with the hassle of having to notify the tenant and deal with the problem administratively.  anything more than fifty big ones, and the landlord is probably pushing it.  (remember, the returned-check charge should be separate and apart from any late payment fee.)  the lease should also include any returned-check charge in the definition of “rent,” as this enables the landlord to sue for eviction if the tenant subsequently fails to pay the charge.

no doubt, if the tenant ultimately makes good on the rent, the late fee, and the returned-check charge, the landlord should be a happy camper.  nonetheless, for landlords who prefer to avoid the aggravation altogether, the lease should also include a provision specifying that if two or more checks are returned for insufficient funds during the lease term, the landlord shall have the right to demand that all future payments be made solely by cashier’s check or money order.  the domu model lease contains just such a provision.