All Forum Posts by: Michael Mueller

What other advertising media are there for single rented rooms (not apartments)? I think almost all rental rooms are rented through Craigslist, at least in Los Angeles.

Your statements are blatantly wrong and misleading. The chances of a successful reversal are fundamentally different for the different payment systems, credit card payments being the easiest to reverse. 

To top it off, Cozy acting as intermediary greatly increases the risk of successful reversals to the landlord. The process starts with an ACH pull by Cozy from the tenant's account, and the landlord has no way of defending an attempted reversal, as he is not a party to this transactions. What does Cozy do to defend reversals? From the threads on this message board, I gather nothing, or not much. Makes sense, as nothing is at stake for Cozy, they will collect form the landlord. I suspect resources and lawyers to fight reversals on behalf of landlords are scarce at Cozy, given their business model.

By contrast, a direct ACH payment to the landlord is very difficult to reverse. The only reason to reverse an ACH payment that has a chance of success, is online fraud, i.e. the sender claims that he was not the one who authorized the payment. This can then be easily fought by showing the rental agreement, and showing that the sender is indeed the tenant. It would be very hard (impossible) for the tenant to argue that a third party fraudster hacked into his bank account and sent the money on behalf of the tenant to the tenant's landlord, which would make no sense, especially if the rent is indeed due. For disputed ACH push payments, the receiving bank is obliged by regulations, to investigate and consider evidence presented by the recipient (the landlord).

I anticipated this problem and therefore never use Cozy for rent collection. Another blatant problem is that last time I checked, a landlord cannot disable credit card payments, which are by magnitudes easier to reverse than ACH payments.

Using Cozy for rent collection is a bad, bad idea.

Also, many tenants who used Cozy and are unhappy for whatever reason, or for no reason at all, will google how to get their money back, many will find this thread, and know what to do: Call their credit card company (for CC payemnts) or their bank (for ACH), and say the magic words "payment unauthorized" after moving out (or before) and boom - 2-3 months of rent are down the toilet for the landlord.

Not that difficult to reverse: https://www.biggerpockets.com/forums/52-rental-property-questions-landlording-issues/topics/538298-cozyco-problem-potential-major-flaw-in-their-system

 

No, I think your are wrong. The problem is particular to Cozy (and similar platforms or intermediaries), as it was not a direct ACH transfer from the renter to the landlord, but rather Cozy probably did an ACH pull, followed by and ACH push from Cozy to the landlord. (Correct me if I'm wrong.) The landlord has several problems: 1. He did not pull from the tenant's account, therefore he cannot directly fight the reversal. He is dependent on Cozy fighting for him. Cozy's terms and conditions probably state that reversals from tenants results in reversals from the landlord's account. 2. It was an ACH pull from the tenant's account, which I'm speculating might be easier to reverse than a push. Even if the ACH from Cozy to the landlord was a push, Cozy is probably protected by their T&C that the landlord agreed to. 3. The landlord used a business account. Curious how the situation would have turned out had it been a personal account.

By contrast, a direct ACH payment is very difficult to reverse. The only reason to reverse an ACH payment that has a chance of success, is online fraud, i.e. the sender claims that he was not the one who authorized the payment. This can then be easily fought by showing the rental agreement, and showing that the sender is indeed the tenant. It would be very hard (impossible) for the tenant to argue that a third party fraudster hacked into his bank account and sent the money on behalf of the tenant to the tenant's landlord, which would make no sense, especially if the rent is indeed due. For disputed ACH payments, the receiving bank is obliged to investigate and consider evidence presented by the recipient (the landlord).

I anticipated this problem and therefore never use Cozy for rent collection. Another blatant problem is that last time I checked, a landlord cannot disable credit card payments, which are by magnitudes easier to reverse than ACH payments.

Using Cozy for rent collection is a bad, bad idea.

Also, many tenants who used Cozy and are unhappy for whatever reason, or for no reason at all, will google how to get their money back, many will find this thread, and know what to do.

Thanks for your links.

I read section 1947.3 https://leginfo.legislature.ca.gov/faces/codes_dis...

(1) It seems like a very awkward and backwards way of saying that checks (OR "another form of payment that is neither cash nor electronic funds transfer"?) must be allowed. The big question is: What is another conceivable form of payment that is not cash or electronic? Gold bullions? Postal service stamps? 

(2) Your Nolo link https://www.nolo.com/legal-encyclopedia/what-types... stipulates that "Cash means currency and does not include cashier’s checks or money orders, which the landlord can require in the lease or rental agreement."

Question: Can I offer electronic payment, cash, or money orders/cashier's checks (but exclude personal checks), to make it more difficult for the tenant to pay with paper instruments? Would that comply with "at least one form of payment that is neither cash nor electronic funds transfer"? For money orders/cashier's check, they would have to make a trip to their bank, right? Could I then also have them make a trip to my bank to deposit it into my account (like if they were to use cash for rent payment)?

(3) Am I allowed under the law to incentivize electronic payment by offering a rent rebate of e.g. $5 representing my reduced handling and processing cost of paper checks? (I assume that I would not be allowed to add a fee for paper payments.)

What are your opinions?

Why am I asking these questions? Like many of the commenters above me, I hate dealing with periodic manual tasks. I'm a computer guy and like to automize stuff. Also, I might be traveling or whatever and not be at home on every 1st of the month. Plus, nowhere else in the developed world but the U.S. is it common to send little pieces of paper across the country and to/from banks to make payments. What a retarded legislation.

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?

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.

@Nathan Gesner You are spot on with your perception of California. However, I live in CA and I'm "stuck" here. CA benefits from a glorious past with tech industry and entertainment industry to name a few, that were built before CA became effectively a one party system; and this "People's Republic" unfortunately also "occupies" more than half of our beautiful West Coast with prime real estate. It appears that these assets allow the "People's Government" to perpetuate their agenda.

More to the point, there is no question that the tenant is liable for the remainder of the lease, or 1-2 months that are typically granted by judges. The original post however is concerned with the rules for returning the deposit, which should be followed diligently by landlords.

@Bryan Zuetel , thanks for your response. I too was first deliberating whether an early termination would alter the original "expiration" of the lease, as per your interpretation of "expiration".

HOWEVER, if this was the case, I cannot think of a scenario where the condition expressed in the halfsentence "... but not ... earlier than 60 calendar days prior to the expiration of a fixed-term lease" would come into effect. Clearly, the legislature would not half added this halfsentence, if it didn't have in mind a scenario where 21 days have passed since the tenant vacated, but the lease "expiration" has not yet happened. I therefore concluded that for purposes of this paragraph, the "expiration" must refer to the original expiration date per lease agreement. Please correct me if I'm missing something in my reasoning.

The halfsentence "or not earlier than 60 calendar days prior to the expiration of a fixed-term lease", which deals with the scenario of a fixed term lease, is juxtaposed to the preceding halfsentence "but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure", which exclusively deals with periodic leases (1946 or 1946.1) and overstays. The conditional semantics in the fixed term scenario, for which notices are not mentioned in this paragraph, therefore seems to be the later of the two dates: [21 days after tenant vacated] and [expiration of lease minus 60 days]. If the first date [21 days after tenant vacated] always resulted in accelerated "expiration", then the language in the paragraph would not make sense.

I acknowledge your answer, but I would appreciate if you could corroborate your interpretation with an example (with or without early termination) where the 60 day rule would come into effect using an alternate definition of "expiration", or with case law. (Irregardless of the actual law, it would arguably make total sense if the landlord could keep the deposit until the end of a fixed term lease, as security for the outstanding rent payments that the tenant is obligated to pay; but what makes rationally sense is a whole different topic as laws not always make sense.)

According to https://leginfo.legislature.ca.gov/faces/codes_dis... :

"No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, ...a copy of an itemized statement... and shall return any remaining portion of the security to the tenant."

Assuming a 12 month lease starts Jan 1st and ends Dec 31st, tenant terminates early and moves out as of 06/30, then the security deposit has to be accounted for and returned by 11/01 (Dec 31 minus 60 days)? Am I interpreting the "expiration of a fixed-term lease" correctly? I am asking because I always come across discussions mentioning the 21 days rule, but never heard about the 60 day rule.

This could have major implications, as by the 21 day rule, landlord would have to return the deposit by 07/21, and would potentially lose rental income for August, depending on the market, as rents are typically hard to collect after the deposit is returned.