Can You Ask a Tenant to Deposit Rent Directly to a Bank Account?

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When you lease a property to a tenant, you will usually have the tenant sign a lease in which you agree not only to how much the tenant will be paying you for the property but how the payments will be made. While some landlords demand cash or check, you can also request that a tenant pay a different way, such as by depositing money in a bank account.

Payments

Most leases allow tenants access to a property for a set period of time but require that they make regular payments on the property--generally monthly. If the tenant fails to make these payments, he is in default and may potentially be evicted. However, the landlord is required to provide clear instruction in how the money must be paid, including who is it paid to, in advance.

Depositing Rent

You could, theoretically, require that a tenant deposit money directly into a bank account. This would be done by providing the tenant with a bank account number and then requiring him to place a check or cash into the account. While this could legally be done, it is not usually done. More often, the check will be given to the landlord and she will deposit it in an account.

Change in Lease

While you can ask a tenant to deposit the money into a bank account, the lease must say that this payment method is the only acceptable one if that's what you want the tenant to do. You can request in the middle of a lease that a tenant change the way he has been paying you, but legally the tenant does not have to comply and you cannot enforce the requested change in court.

Considerations

Providing a tenant access to a bank account is extremely unusual. This is because if a landlord opens an account for a tenant and gives him access to it, he may be financially liable if the tenant overcharges the account. In addition to taking cash or check payments, you may wish to request the tenant make a direct deposit to your account each month, in which case, the money is automatically transferred.

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References

  • "Real Estate Law"; James Karp; 2003
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