Nowadays, there are a lot of different ways you can pay rent to your landlord. Personal checks, cashier’s checks, money transfers, and good old fashioned cash are all commonly used to pay rent. But can a landlord require you to make cash payments for rent exclusively?
A landlord cannot require a tenant to pay in cash in many states, barring a couple of specific extenuating circumstances. However, the lease that you sign as a renter is a legally binding agreement, so a landlord can include several stipulations about the payment method requirements.
In this article, we will take a look at the laws regarding renter rights as they pertain to requiring cash payments in several states. We will also detail why a landlord may ask you to pay your rent in cash and why this may be of concern to you as a tenant. If you’re unsure whether your landlord is within their rights requiring cash payments or what this situation could signal, read on.
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A State By State Scenario
Outside of some specific laws regulating tenants’ rights that are federally mandated—mostly regarding discrimination and the use of a tenant’s credit history for screening purposes—the majority of landlord/tenant laws are drafted and enforced on the state level. This means that it is important to do further research and consult your state’s laws regarding landlord/tenant laws for more specific and detailed information.
That being said, we will take a look at a few states and their policies on whether or not a landlord can require a tenant to pay rent in cash.
Georgia
Like many other states, Georgia does not have any specific laws on the books about whether or not a landlord can require a tenant to pay rent in cash. Instead, this part of a landlord/tenant relationship will be addressed in the lease.
If the lease you signed explicitly states that rent must be paid in cash to the landlord, then you have agreed to the terms, and that is the payment method you will be required to use.
This is one reason it is imperative that you thoroughly read your lease before signing. Besides a few specific circumstances like a landlord incorporating a clause requiring a tenant to pay for their legal fees or one that permits eviction without the necessary legal proceedings, the terms of a lease will be enforced in court. If the lease stipulates cash payments only, expect to pay in cash.
Oregon
This is another state that takes a hands-off approach regarding payment methods for tenants. The required payment method will be detailed in a lease, and the agreed-upon terms will be legally binding in the state courts.
However, it is important to note that the lease that you sign cannot be changed by either party unilaterally during the rental period. This means that if the lease states you can pay by either cash, money order, or cashier check, the landlord is not allowed to change the requirements and force you to pay with cash six months through a 1-year lease.
California
Unlike other states, California has a few stipulations in place regarding the methods of rent payment. According to California Civil Code 1947.3, a landlord is legally required to accept other payments besides electronic transfer. This is most likely a way to combat the predatory fees that can often occur when paying online or via electronic transfer methods.
According to the same civil code, a landlord is also required to accept rent payments by at least one method that is not cash or electronic transfer. This means that a lease explicitly stating rent must be paid in cash is void, and a landlord that is trying to enforce it may be subject to legal action.
However, there is one circumstance as outlined in Civil Code 1947.3 that does allow for a landlord to require a tenant to pay exclusively in cash:
“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.”
The only time that a landlord can legally require a tenant to pay cash in California is if they have bounced a check, and even in this case, the clause is only applicable for three months after the bounced check.
Washington State
Washington State has a law on the books that work in the opposite direction of the other states we have examined. According to RCW 59.18.063, a landlord is legally permitted to refuse any rent payments made by the tenant in the form of cash.
Since there are no specific details on the circumstances necessary for a landlord’s refusal of cash payment, it can be assumed that it is at their discretion, regardless of what is outlined in the lease.
So, while they can’t require you to pay cash unless it is stated in the lease, they can arbitrarily refuse your cash payment.
The reasoning behind this law is unclear, and it seems like this could cause some serious issues. However, the law is the law. This is another example of why it is important for all renters to thoroughly examine and understand landlord/tenant laws in their state.
Texas
Texas has a landlord/tenant legal framework similar to some of the other states we have examined, in that the specific payment method will be specified in the rental agreement. However, if the payment is not explicitly detailed in the lease, a landlord in Texas is legally required to accept cash payments for rent.
Once again, what is agreed upon in the lease is legally binding, so be sure to discuss your prospective landlord’s payment options and understand your lease before you sign it.
Cash Rent: Cause for Concern?
There is nothing wrong with a landlord preferring cash payments, and as long as it is acceptable to both parties and agreed upon before signing a lease, it shouldn’t be an issue.
However, there are a few scenarios where landlords use cash payments for their own benefit. Some landlords will push for cash payments as a way to skirt income tax. The lack of a paper trail that is typical of cash transactions can also be used by unscrupulous landlords to avoid existing debts or court-ordered payments like child support.
One situation that could have serious implications for a long term renter is if the landlord has a mortgage on the property and is pocketing the rent money with no intention of paying the bank. In the extrapolation of this scenario, the bank could foreclose on the house, evict the tenant and leave them with no legal recourse.
It is important to note that these potential scenarios are exceptions and not the rule; however, they are possible.
Conclusion
The key take-away from this article is that it is necessary to understand your rights and obligations as a renter within your state, as well as thoroughly examine all documents before signing a lease agreement. Each state is different, so do your research.
Also, if you do pay rent in cash, whether you are required to or not, always get a signed receipt from the landlord for every transaction. A landlord that questions or refuses to do so is a major red flag, and you should do everything possible to remove yourself from the situation because they are not someone worth trusting.
