Zelle problem if you want to evict

29 Replies

After a discussion with other landlords I have discovered a potential problem with Zelle. What happens when you are actively trying to evict an uncooperative tenant? Let’s say the tenant is intentionally or carelessly damaging your property, or he has acquired a pet in violation of your lease, etc. If you go to court after filing your state’s required eviction paperwork, and the first of the month comes up there is no way to refuse your tenant’s payment. So the tenant can keep paying you, and the judge will say that since you have “accepted” the rent payment your case of eviction is dismissed. Sure you don’t want to take the payment, but Zelle is going to put it there anyway.

When I contacted Zelle about this they said I would have to “contact the sender.” Well the sender is my uncooperative tenant, so that won’t help me. The Zelle employee then suggested I contact my bank to see if they could somehow refuse to accept my payment from the uncooperative tenant. I will call my bank Monday to see if they can do this.

For me this is strictly a hypothetical problem now, but I could see this becoming an issue based upon my years of experience as a landlord. Once you enroll in Zelle it will be up to your bank to help you out from what I have learned.

@Mark Forest - Not too sure how Zelle works, but I can see how your "hypothetical" issue can become a big problem.  I personally use Cozy and they have a feature when you can stop accepting rent for exactly this type of reason.  Oh and Cozy is free.  

Obviously it's too late to stop accepting payment if your uncooperative tenant also sent it.  However, for next month, ask Zelle if they have a way to halt future rent payments.  If not, I'd switch to Cozy or some other software if I were you.

If a tenant takes on a pet or is intentionally damaging my property a rent payment is not going to stop an eviction proceeding.

If a tenant does not pay rent and pays it just before I file- no eviction. If a tenant pays it after I file and includes all court costs, no eviction.

I think we do well to play out hypotheticals at times, but what this should illustrate is the need to paper your tenants. In the case of the late rent, you MUST hit them with a notice to cease immediately, even if paid. And do it the second month and so on... and then you can proceed in to court and file an eviction or refuse to renew a lease based on habitually late rent, and you will have it well documented. (NJ Law)

I have fully migrated from Cozy to Zelle and I love it! The money just arrives in my account the moment it is sent on or before 1st. LOVE IT!

I would also add that it increases your ability to be vigilant. If a rent payment is not in my account on the 1st, I will pick-up the phone immediately (it has not happened). Whereas with a paper check I would have to wait out the snail mail effect.

@Patrick M.   "If a tenant takes on a pet or is intentionally damaging my property a rent payment is not going to stop an eviction proceeding."

I think it will since you have "accepted" through Zelle your tenant's payment for another month. Another landlord I know was trying to evict a tenant because he was not keeping the apartment clean.  The landlord had set up automatic payments from the tenant's bank account, and before they went to court a payment to the landlord was made by the bank.  The judge dismissed the case, and the landlord had to wait another month to get eviction. 

I am not arguing that you are necessarily wrong, but I don't see what argument can be made since you have constructively received the rent, and according to Zelle the only one who can stop the payments is the tenant. 


@Aaron K.   Aaron i just had a tenant who  was paying by check, but he got a  pit bull and had holes drilled into my roof for a satellite antenna, both of which were lease violations.  I evicted him without a problem, but if he was on Zelle this may have caused a problem since he wanted to stay in my house, and was quite upset by me evicting him. 

@Patrick M. - Not sure how things work in New Jersey, but in San Francisco, if a tenant shows proof that they paid the LL any portion of rent (whether it be via Zelle, Cozy, etc.), then the pending eviction case ends in favor of the tenant and the LL essentially needs to start over.  Sad, but it happens all too often here.  

@Mark Forest Receiving my rent has nothing to do with violating my lease. I would certainly expect to receive my rent as I wind my way through the court system in an attempt to oust a tenant for violating a term of my lease. That a tenant can some how be absolved of violating a lease by simply paying rent is ludicrous when it is not the rent payment which is at issue. 

@Ana Marie B. not the case in NJ, that is why I used perens. 

If a tenant takes on a dog, and I have given them notice to cease and notice to quit, I may certainly proceed to court for a violation of the lease and seek eviction.

@Patrick M. - I don't have the time to do homework for you, but can say that I've worked in housing law in SF defending eviction cases so have some knowledge in the area.  Again, not sure how NJ UDs go, but as far as I hear, your laws seem quite tenant-friendly as well.  Good luck to you.

@Mark Forest if you remove your email or phone from zelle that is used to deposit money from the tenant into your bank account. His deposit will show pending indefinitely. Did you actually talk to Zelle? I believe they outsource customer support completely to the Phillipines and are instructed to refer all issues to your bank regardless of fault
@Mark Forest I thought about this same problem long time ago. Therefore, I never register my phone number with Zelle, instead, I register a new created email account with Zelle, give the email to the tenants to send rent payment. In case I need to evict the tenants in the future and want to refuse the rent payment from the tenants, just remove your registered email account from Zelle, then the tenants won’t be able to send you payment with Zelle anymore. It solve the problem.

@Ana Marie B. , I was unaware of your expertise, but given it I am surprised you don't have that info at your fingertips? I have searched westlaw as well as the San Francisco Ordinance and no where do I see that a partial payment of rent is an absolute defense to eviction. It will most certainly come into play when the eviction pertains to non-payment of rent, but not for other causes, as I suspected.

@Steve B. and Account Closed those are good solutions.

I used to let my tenants deposit directly to our checking account.  I thought it was a good idea until I was going through an eviction.   

Long story short.   The constable showed up to remove the tenant.  She showed her deposit slip, I showed the check I sent back the next day.  The Constable locked her out.   

Don't know what the "LAW" is, but the constable used common sense.  

We now use appfolio, and we can with one click stop all online payments etc.  

On another note.   We had another tenant pay online the night before court.   Online payments can bounce for NSF 3-4 days later.   So We shut off online payments a week before the court date now.  

Good Luck

IF the tenant wanted to pay so dearly could they just write you a check... and send it off. Even if they didn't know where to send it they could likely argue they "tried" to pay you but the check got returned blah blah...

I just went through a similar situation to your hypothetical. Served notices to Cure Breach or Quit after tenants' direct deposit had sent early rent to my checking account. Since there was no way of reversing or returning the payment through my bank, my lawyer advised I mail them a check with the returned rent and a letter clearly stating I was refusing rent until the lease violations were corrected. The mindset is that if you take tenants to court for an eviction but are also still accepting rent from them, it looks like you're not really bothered by whatever they're doing wrong, since you're still happy to take their money.

TL;DR Just send tenants a check for the amount of paid rent clearly stating that you are not accepting rent until they comply with your terms.

Originally posted by @Mark Forest :

@Aaron K.   Aaron i just had a tenant who  was paying by check, but he got a  pit bull and had holes drilled into my roof for a satellite antenna, both of which were lease violations.  I evicted him without a problem, but if he was on Zelle this may have caused a problem since he wanted to stay in my house, and was quite upset by me evicting him. 

I imagine he was very upset, and I'm sure he viewed it as all your fault....I also would not be surprised if he is breeding like a wild rabbit.

@Patrick M.   You may or may not be "legally" right, but judes are all powerful in their courtrooms, and they have a lot of leeway to dismiss or adjourn cases.  Many judges are pro tenant and having Zelle accept money may be just the excuse the judge is looking for to make it hard for that "evil rascally rich"  landlord trying to put that poor tenant out on the street.

I like Account Closed does with his email. but I would have to have each of my tenants have a different email.  Would the bank accept that?  So far the only idea I have seen that may work is to tell the judge you have immediately mailed the check back to the tenant. 

@Jack B.   Oh yes he said I was "forcing his family to be homeless."  The truth is he treated my house like he owned it instead of renting it.  When we got in to the house we found holes in all of my plaster walls which is another clear violation of my lease. 

Yes, banks accept multiple emails.  
The best way is to have different emails for different tenants.  
However, I’m lazy to create multiple email accounts too.  I give the same email payment address to all my different tenants. 
My planning is, wait unit “the eviction time” come, then I will create a new email account, give the new email account to the rest of the “good” tenants except the “Tenant-in-eviction-process”, and remove the old email account.  
This way, I don’t need to create too many email accounts until an eviction is needed.  




Originally posted by @Mark Forest :

@Patrick M.   You may or may not be "legally" right, but judes are all powerful in their courtrooms, and they have a lot of leeway to dismiss or adjourn cases.  Many judges are pro tenant and having Zelle accept money may be just the excuse the judge is looking for to make it hard for that "evil rascally rich"  landlord trying to put that poor tenant out on the street.

I like @Ran L. does with his email. but I would have to have each of my tenants have a different email.  Would the bank accept that?  So far the only idea I have seen that may work is to tell the judge you have immediately mailed the check back to the tenant. 

Originally posted by @Mark Forest :

@Jack B.  Oh yes he said I was "forcing his family to be homeless."  The truth is he treated my house like he owned it instead of renting it.  When we got in to the house we found holes in all of my plaster walls which is another clear violation of my lease. 

 Someday you will learn to accept "responsibility" for providing free housing to people directly at your expense since you worked hard and have more and they don't, on top of your tax dollars going to fund millions of these imbeciles. ;-)

Most states in country are tenant’s friendly state. In New Jersey if you file eviction for non-payment than tenant has right to pay in full including court cost up to end of the day of eviction hearing. If you file for eviction for other than non-payment than eviction would not stop even tenant pays in full. 

I was reading this thread with interest. If receiving Zelle payments were considered "accepting rent", then a large portion or landlord/tenant law would be lead ad absurdum, wouldn't it?  For example, a tenant could stayover the night after termination of a fixed term lease just by forking over a Zelle payment on the last day, by surprise - even if there was no disagreement about the end date, and a new renter is scheduled to move in: https://codes.findlaw.com/ca/civil-code/civ-sect-1... : If a lessee of real property remains in possession thereof after the expiration of the hiring, and the lessor accepts rent from him, the parties are presumed to have renewed the hiring on the same terms and for the same time, not exceeding one month when the rent is payable monthly, nor in any case one year.

Likewise, a tenant could terminate a periodic lease by giving e.g. a 30-day notice, and - surprise, surprise - instead of moving out, send the next month's rent on the day of the planned move-out.

Frankly, I don't believe this was the intent of the law. The law was probably written before the era of electronic payments, when a landlord had to physically take action and present the check to the bank.

Another thought: If landlord does not offer electronic payment because of risk of voiding terminations or evictions, then tenant goes to landlord's bank and deposits cash into landlord's bank account. (Account number can be easily seen online on cashed check images.)

Or landlord sends money via Zelle to landlord's normal email address or phone number, hoping that it is attached to a Zelle account. (This might be avoided by using dedicated email addresses for Zelle, and keeping them secret. Although I think last time I signed up for Zelle they now require a phone number. Alternate phone numbers are more difficult to obtain.)

Or a tenant wires the money to landlord's bank account. (Account number can be easily seen online on cashed check images.)

So, in summary, would avoiding electronic rent payments or avoiding Zelle, and dealing with paper checks for regular rent payments, accomplish anything other than the pain of having to deposit and keep track of paper checks, if a malicious tenant wants to game the system and force an electronic payment hoping to benefit from archaic laws?