With all ACH payments, there is some risk that your tenant's payments can fail. The most common scenario results from insufficient funds, but it can also happen due to a stop payment or an error on the part of their bank
Additionally, TurboTenant does not automatically retry failed payments. Tenants must manually re-initiate the payment process.
Some of the most common reasons for a tenant's payment failure are:
Insufficient funds
Incorrect bank account
The card information was entered incorrectly
Payment method is not authorized for debit payments (this is if they entered a savings account vs a checking account)
The renter had their bank account frozen
Tenants will also need to manually retry the payment in case of a failure, as TurboTenant does not automatically retry failed payments. Additionally, failed payments could result in a "clawback," where initiated deposits are reversed temporarily.
Payment disputes initiated by the tenant through their bank can also result in payment failures.
It is important to know that if a payment fails multiple times, our payment processor will block the payment method. If that is the case, the renter will need to connect a different payment method to remedy this.
What happens when a payment from your tenant fails -
For Premium landlords:
If you are subscribed to the Premium Plan, Stripe will start the deposit process to your account as soon as payment has been submitted (before the funds have cleared from the renter's account), so you will typically receive the payment within up to 5 business days. If a tenant's payment fails, you will be notified via email. The email will include the tenant's name, amount, and date on which the payment failed. You can learn more about reversals by clicking here. These transactions are managed by Stripe, TurboTenant's payment processor, which handles all deposit and reversal processes.
When a rent payment fails, the payment processor initiates a reversal process. This reversal can take multiple business days to complete, during which time the failed payment must be fully resolved before subsequent payments can proceed. If funds have already been deposited into the landlord’s account before the failure is identified, those funds will be withdrawn to reconcile the failed transaction. This process ensures that only cleared payments are retained.
It will take 5-7 business days for the reversal to fully process and clear. Future payouts may be disrupted during this time. Once the reversal is complete and a new payment is submitted, you will see those funds in your account within 1-2 business days. The timeline includes a review process by the payment processor, Stripe, to confirm and ensure accuracy of the reversal.
Failed payments can also affect the timing of subsequent payouts. For example, if a tenant’s first payment fails and a second payment is submitted, the payment processor may place the transaction under review. This review ensures that the replacement payment clears successfully before releasing funds to the landlord, potentially extending the payout timeline.
Below are a couple of examples of what the notification looks like when sent to the renter and the landlord.
The email notification sent to the renter:
The email notification sent to the renter for failed payment notice will include the bank account information with the last four digits, the amount of the charge that was tried, and the option to Recharge Payment.
The email notification sent to the landlord:
The email notification sent to the landlord when a tenant's payment fails will include the tenant's name, date, amount, and option to view the payment details.### Steps for Tenants to Retry a Failed Payment:### Steps to Investigate Payment Reversals:
Log in to Your TurboTenant Account
Navigate to the
Lease Profiletab.Select the specific lease profile related to the payment.
Review Payment Information
Go to the
Paymentssection.Click on the specific charge to view details such as status updates and reasons for the reversal.
Analyze Timeline
The information will show the timeline of the deposit, failure, and reversal.
4. Update Bank Information: Ensure that the bank account details logged into TurboTenant are accurate to avoid errors.
5. Retry Payment via Renter Portal: Log into the TurboTenant Renter Portal and select "Make Payment." Always verify fund availability to prevent re-failure.
In addition to the email notification, you will also receive the status of the payment failure within the charge along with the date the payment failed:
For non-premium landlords:
Payments will typically take up to 5 business days to be pulled from the renter's account and deposited into the landlord's bank account.
All payments are processed on business days, excluding weekends and (bank-observed) holidays. If your renter pays late in the evening or on a Friday, their payment will be processed the following business day or Monday.
What is a failed payout?
A failed payout refers to a payment that we are unable to deposit into your account. This issue may arise for several reasons, such as your bank account being closed or incorrect bank account numbers that need to be updated in TurboTenant.
If a payout fails, you will be notified via email. The email will contain the amount, the tenant's name, the last four digits of your bank account, and the reason it failed to pay.
You will also see the failed payout in the payments section of your lease profile. To get there, you can select the 'Leases' tab, select the name of the lease profile, and then select 'Payments.' You will see 'Deposit Failed':
Once you receive notification that your payout failed, you can take action by re-adding or updating your errored bank account. You'll also want to contact our support team for further assistance.
Within the charge itself, you may also see a message that reads: "The deposit to the assigned bank account failed." This message appears when funds were unable to be deposited to your bank account on file. When prompted, click "Update your bank" to re-add your existing bank account or connect a new one so that future deposits can be received successfully.
FAQs
Q: What is the role of Stripe in this process?
A: As the payment processor for TurboTenant, Stripe handles the financial transactions, including deposits and reversals. TurboTenant acts as a third party and cannot influence or prevent payment reversals triggered by Stripe.
Q: My bank rejected the payment because my bank account was closed. What do I do?
A: If your bank rejected the expected payment deposit because your bank account was closed, frozen, or for any other reason, to rectify this, you'd want to reach out to our support team. Our payment processor typically takes several business days to receive the failed payout information. In the meantime, you can take action by re-adding or updating your errored bank account. Our team is happy to look into the status and provide you with additional information.
Q: Why didn't I receive a failed payment email after my card was declined or a 3DS check failed?
A: When a card is declined or a 3DS (bank authentication) check fails, TurboTenant does not send a failed payment email to the renter or landlord — and this is by design. Unlike bank (ACH) payments, card payments give the renter real-time feedback on the failure during the payment flow itself, so a follow-up email isn't needed. The landlord is also not notified, because a card payment that fails was never confirmed as "received" to begin with — there's nothing to reverse or walk back. This is different from bank payment failures, where funds can be submitted and later reversed, which is why those do trigger email notifications to both parties.