Rental Promissory Note: Protect Your Rental Income | [Your Company Name]

Before you take any action against a tenant for failing to pay his rent on time, check your state's rental laws or talk to your attorney. If you don't wish to begin eviction procedures and believe your tenant will be able to pay the rent, consider having him sign a promissory note. A promissory note for a rental is a legally-binding promise to pay the rent. You can draw up this document yourself or request the assistance of your attorney.

Step 1

Meet with your tenant to write the promissory note for the past due rent. According to "Inc.," promissory notes typically begin with some variance of the words, "I promise to pay you (dollar amount)."

Step 2

Write both of your full names in the beginning of the promissory note. For example, write "John Doe (tenant) promises to pay John Smith (landlord) past due rent in the amount of (dollar amount)."

Step 3

Specify a due date for the rent. The due date is up to you; you might choose to have the full balance plus the following month's rent paid on the next due date. Or you might require the tenant to pay the past due rent earlier.

Step 4

Check your state's laws or consult your attorney before requiring the tenant to pay interest. California allows interest for late rent, but you cannot exceed 10 percent. Oregon also allows landlords to charge interest, but only if you specified the late penalties in the original lease agreement. In some states, such as Massachusetts, you may only charge interest if the rent is late by at least 30 days. If you can charge interest or a late fee and wish to do so, specify the amount of the fee or percentage of interest on the promissory note.

Step 5

Decide if you'll allow the tenant to pay you via an installment plan. If so, decide on the number of installment payments and the amount of each payment. Specify the first due date and each subsequent due date in the letter. For example, write that the first installment is due on December 1, 2011 and that each subsequent payment is to be made on the first of each month until the balance is paid in full.

Step 6

Sign your full name at the end of the promissory note and write your address. Date the document. Have your tenant sign her full name and write her address. Make a copy of the note so each person has one.