Can California Landlords Limit the Manner and Method to Pay Rent?

This article provides an overview of Civil Code Section 1947.3, which addresses two separate rent payment issues – (1) whether a landlord can require the tenant to pay in cash and (2) whether a landlord must accept rent from a third party.  The answer to both questions is “it depends”, as explained below.

Form of Payment

On the first issue, California Civil Code section 1947.3 provides that the landlord “shall allow a tenant to pay rent and deposit of security by at least one form of payment that is neither cash nor electronic funds transfer.”  This general mandate has some exceptions where the landlord can require a cash payment.  Specifically, a landlord or a landlord’s agent may demand or require cash as the exclusive form of payment of rent or deposit of security if:

• the tenant has previously attempted to pay the landlord or landlord’s agent with a check drawn on insufficient funds, or
• the tenant has instructed the drawee to stop payment on a check, draft, or order for the payment of money.

 In either scenario, the landlord can only demand or require cash as the exclusive form of payment for a period not exceeding three months following the attempt to pay with insufficient funds or with a stopped check payment.   To comply with this section, the landlord is required to notify the tenant in writing that the payment instrument was dishonored and that the tenant must therefore pay in cash for a stated period not exceeding three months.  The dishonored instrument must be attached to the notice.  Normally, a 30-day notice must be given.  The rental agreement may allow for a shorter notice period of no fewer than 7 days. 

Third Party Payments

A landlord or a landlord’s agent must allow third party rent payments, but may condition that consent on the tenant’s execution of an acknowledgement stating that (1) they are not currently a tenant of the premises for which the rent payment is being made and (2) acceptance of the rent payment does not create a new tenancy with the third party.

Failure by a third party to provide the signed acknowledgment to the landlord or landlord’s agent voids the obligation of a landlord or landlord’s agent to accept a tenant’s rent tendered by a third party. A landlord or landlord’s agent may require a signed acknowledgment for each rent payment made by the third party.  Alternatively, the parties can agree that one acknowledgment covering more than one rent payment during a period of time is sufficient.

Having trouble with a non-compliant tenant?  Lynx Legal is here to alleviate that stress.  Contact us today for all your eviction needs at 888-441-2355 or [email protected].  Our experienced staff is standing by to take your order or answer any questions you may have about the eviction process.