Payment reversal

Example

A tenant’s $1,500 rent payment by bank transfer shows as received on Thursday, October 1, 2026, then reverses on Monday, October 5, with the return code R01, insufficient funds. The landlord’s payment processor charges a $25 return fee. Under the lease the tenant now owes the $1,500, the returned-payment fee and any late fee that has run since the grace period ended. Card chargebacks can arrive weeks or months after the payment.

In a lease it looks like…

A payment that is reversed, returned or charged back for any reason is treated as not made. Tenant shall pay a returned-payment fee of $25, and after two reversed payments Landlord may require payment by certified funds.

Good to know

Landlords should send a written notice of the reversal with the new amount due, and wait for funds to clear before treating a close case as paid. Tenants who dispute a charge with their bank should tell the landlord in writing, since the dispute pulls the rent back.