Investor · NY · Member since 2020 · 57 posts · 44 votes
I want to stop accepting cash as a form of payment for rent. I want to accept only money orders, checks, direct deposit and or electronic payment through Zelle. I've tried to find an answer online but, I can seem to find a clear answer. Can I refuse to accept cash as a form of payment on a new lease? (I'm in contract to buy my 2nd rental property and I'm trying to find out before I lease my next apartments.)
Your lease is a contract. You dictate the payment terms. Here is mine:
RENT: A. You agree to pay the monthly rent indicated above via deposit to the following checking account at BANK: account # 123456; routing # 123456 (nearest branch is 123 Main Street, Albany, NY). Rent is due in advance and in full on or before the 1st day of each month without deduction or set off. Time is of the essence. Payment may not be made by third party checks. If rent is not paid physically at a branch (i.e. it is paid online or via bank transfer), the date of payment will be considered the date when funds reach our account.
Your lease is a contract. You dictate the payment terms. Here is mine:
RENT: A. You agree to pay the monthly rent indicated above via deposit to the following checking account at BANK: account # 123456; routing # 123456 (nearest branch is 123 Main Street, Albany, NY). Rent is due in advance and in full on or before the 1st day of each month without deduction or set off. Time is of the essence. Payment may not be made by third party checks. If rent is not paid physically at a branch (i.e. it is paid online or via bank transfer), the date of payment will be considered the date when funds reach our account.
I am not sure about specific state laws, but, in CA you can do this. I have not accepted cash for more than a decade, reduces the chance of being a victim of armed robbery or counterfeit bills.
This is a strange subject. Technically no state laws matter in this. You must accept cash as a form of payment. However, you can put in your contract that you do not accept cash as a form of payment. This does not mean you can actually do so, cash is a form of legal tender. The following are not forms of legal tender but are considered bank promisary notes, checks, money orders, online payment forms, etc. Basically cash is the only form of tender that is legally enforced by the government. If you and your tenants want to have an agreement where they don't pay in cash that is fine, but if they bring you cash you can't really say no.
@Issac S.- awesome @Michael H.- That's kind of what I figured...That I could put it into the lease/contract but, technically, I would still have to accept it. I'm just tired of waiting for the checks/money orders to come in the mail and I don't want to deal with cash because I live over an hour away from my properties...I really only was accept electronic payments, moving into the present time. @ Bradley M.- Very true. lol.
Yes you can refuse to accept cash.I do very similar to Wesley.
When you sign the lease and do the walkthrough why would you not accept cash on the first payment along with any pet fees and the deposit? I have no problem doing that.
The only exception is I don't accept any cash on properties that my self directed IRA owns. I am not allowed to directly handle cash for my IRA.
@Brittany Rivera anyone can post a lease clause online and anyone can add it to their lease. Just because something is in your contract, does not mean it is legally enforceable. Make sure it is legal in your state before adding any clause. I don’t know NY law, so I can’t answer your question.
@John U.- I don't mind taking it initially but, I don't want to have to collect cash down the line because I don't live near by.
@Andrew B.- Yes, I know that I can pretty much write anything into a contract. I am trying to find out if it is legal or not because I cant seem to find that answer anywhere online.
@Brittany Rivera anyone can post a lease clause online and anyone can add it to their lease. Just because something is in your contract, does not mean it is legally enforceable. Make sure it is legal in your state before adding any clause. I don’t know NY law, so I can’t answer your question.
It's absolutely legal to write it into your lease how you accept payment. For those that are getting confused, you are not refusing to accept "legal tender" as payment. You are, however, dictating how you will accept rent payments. My tenants can pay in cash, check, bank-to-bank transfer, wampum....just so long as they deposit it into the bank account # I have given them before the grace period expires. I do not accept cash (or any other form of payment, for that matter) in person, via US mail, carrier pigeon, etc.
The OP's tenants can use their cash to pay via online portal or some other manner she wishes. All of the methods people (and myself) are suggesting all start with some good 'ole "legal tender." Some of you are just being silly.