Is it true that tenants who pay rent electronically can continue to just pay electronically and stay in the apartment after their lease expires even though they have been served a formal notice to vacate at the expiration date of the lease?
The problem arises when you cannot refuse the electronic payment before it is deposited in your account and withdrawn from the tenants account.In California law, this can:Establish a month-to-month tenancy after the end of a lease, with no intent on the part of the landlord to extend such an offer, and even if the lease explicitly disallows such conversionIf an eviction proceeding is in progress, it can halt the eviction proceeding and cause the landlord to have to start the process over, since the landlord is prohibited by law from accepting rent • even rent owed by a tenant occupying a property after a Notice To Quit • once an eviction proceeding starts, acceptance equals termination of the proceedingImply forgiveness of fees owed, acceptance of a partial payment which includes a full payment of rent owed, and no or only partial payment of fees owed is tacit forgivenessImply acceptance of a tacit renegotiation of the rent amount to the previous rent amount, following a rent increase, this is a variation on a partial payment, but on a month-to-month can restart the 30/60 rent increase notice clock, and on an automatic yearly renewal, can lock in the old rent amount for another yearOther jurisdictions have similar tenant-favoring laws.It should be noted that some Canadian banks have a system which allows an electronic payment requiring explicit franking.In other words, an email is sent with a franking code, and you can accept or reject the payment on a payment-by-payment basis.This prevents the removal of funds from the tenant’s account, or insertion of the funds in the landlord’s account, without an explicit step which requires human intermediation.Because the funds do not change hands without this explicit step, it does not trigger acceptance on the part of the landlord.The limitations on such a system is that the landlord and the tenant must have a bank in common, and the bank must offer this explicit verification step.To my knowledge, no U.S. banks allow this sort of thing, or are set up to offer it, and if they did, it would not work between banks, like the Canadian system, both parties would need accounts with the same institution.Because of these issues, most landlords will not accept electronic or credit card payments for rent.Credit cards in the U.S. have the additional problem that the transaction fee is assed to the merchant, rather than the person paying, about the only places that have separate “cash price”/”credit card price” are gas stations.It’s unlikely for U.S. banks to offer the service fee on the customer side of the transaction • that’s just not how credit cards work, in the U.S. • and it’s similarly unlikely that they would offer a “no deposit means no withdrawal” transaction escrow service, since if the transaction is not completed, they’ve spent the money staging the transaction, but not collected their service fee • that’s the only way they make money.While you can do something similar with PayPal • assuming you adjust the rent upward for credit card tenants, which has its own set of problems in California • it doesn’t avoid the withdrawl from the tenants account, even if the landlord elects to decline payment.In that case, the tenant could rightly argue in court that the payment was accepted on the landlord’s behalf, by PayPal, as the landlord’s agent.For the original reason, and these additional reasons, I do not accept credit card or electronic payments.