Can California Landlords Require California Tenants Pay Rent Electronically?
Reports of California landlords requiring California tenants to pay rent via online portals and websites routinely surface with greater frequency in recent years. Given the increasingly frequent torrent of data breaches and malware attacks throughout the Nation, many tenants simply do not wish to keep their private financial information online. So what happens when a California landlord requires the usage of an online payment portal or website? Must the California tenant comply? Luckily, when it comes to paying rent, California law favors tenant choice, and provides options preserving the right of California tenants to pay rent offline.
Civil Code § 1947.3: California Tenants’ Choice When Paying Rent
Under California Civil Code section 1947.3, California tenants can choose how they wish to pay rent. The law requires the landlord or property manager to, “allow a tenant to pay rent…by at least one form of payment that is neither cash nor electronic funds transfer.’ California Civil Code § 1947.3(a)(1). An electronic funds transfer broadly includes, but is not limited to, direct deposits, credit card payments, and payments made on a computer. California Civil Code § 1947.3(c).
Although a tenant is free to agree to pay rent via an online portal or website, the law is clear: California landlords may not exclusively collect rent via an online portal or website (or by demanding cash as the exclusive payment method). California tenants are entitled to pay rent by at least one other payment method. This means that, in addition to offering an online portal and accepting cash, the landlord must permit the tenant to pay rent in another form, such as money order or check.
What Happens Where Lease Provision Mandates Rent Payment Using an Online Portal?
Often, California tenants unknowingly sign leases containing a provision requiring they pay rent via an online portal or website. Such clauses are void and unenforceable. California Civil Code § 1937.3(e). This is because they are against public policy for running contrary to California law. Id. In such instances, California tenants need not abide by the provision.
However, California tenants remain free to agree to pay rent via an online portal or website. The law provides tenants, and not landlords, with the freedom to choose how they pay rent.
When May Landlords Exclusively Require California Tenants Pay Rent in Cash?
Where a California tenant previously attempts to pay rent with a check that bounces, or the tenant issues a stop payment on a check or money order, the landlord may exclusively require payment in cash for the following three months. California Civil Code § 1947.3(a)(2). To invoke this limitation, the landlord must provide written notice stating that the check or money order was dishonored, and the tenant must pay in cash exclusively for a period not exceeding three months. Id. Notably, the landlord must also attach a copy of the dishonored check or money order to the notice, or else it is invalid. Id.
California Tenants’ Options When Landlord Requiring Rent Payment Exclusively Through Online Portal
Where a landlord requires rent payment exclusively through an online portal or website, the tenant may take any one or a combination of the following steps:
- Write the landlord a letter or email demanding that, under California law, the landlord must accept an alternative payment method, such as a check or money order;
- Attempt to pay rent via the alternative payment method;
- File a claim in court;
- Organize other tenants in the building who also desire to pay by alternative method and fight for a rent payment policy change collectively;
- Contact a California tenant rights attorney for assistance; or,
- Contact a local mediation program, including at the tenant’s local rent board, if applicable.
Please be advised that a landlord may issue a three-day notice to pay rent or quit if the landlord refuses to accept the tenant’s rent payment as tendered. At the expiration of the three-day notice, the landlord can file an unlawful detainer (eviction) lawsuit seeking to recover possession of the tenant’s home. Should the tenant receive a three-day notice, the tenant is advised to consult with an attorney before the third day. Eviction lawsuits can be stressful, and if the tenant loses, they will be forced from their home. Generally, chancing an eviction lawsuit should be a tactic of last resort.
California law is clear. Landlords must offer California tenants at least one alternative method of paying rent, in addition to cash or payment by an online portal or website. A tenant wishing to keep their personal information offline has the right to abstain from paying rent via an online portal.