I don't like the payment methods offered by my landlord. Do I still have to pay rent?

Question

Recently, a friend of mine signed a two year rental agreement with a small mom and pop rental place. At the time of signing, they offered credit cards as a way of paying, but a credit card is not explicitly mentioned in the contract as a method of payment. However, three months ago, they notified my friend that they are no longer accepting credit cards as a payment method for rent (their processor changed rules or something). They switched entirely to ACH drafts only.

However, my friend doesn't want to use ACH drafts as he already authorized them to charge his credit card. And he refuses to give them his ACH information, despite repeated notifications from the landlords.

He claims that they stopped collecting rent, not that he stopped paying it.

This brought into my mind some very interesting financial and legal questions.

His entire premise is:

• He entered into a contract to pay because he liked the payment methods offered
• That payment method is still authorized, but the company no longer accepts it
• Therefore he authorized a payment, but the company isn't collecting
• Therefore he is off the hook for repayment AND doesn't need to add a new method of payment

My question is:

• Is the onus for repayment on the lessor or the lessee? aka Is a lessee required to repay a lessor in a manner the lessor accepts? Or must a lessor accept any payment method from the lessee?
• Is not liking the payment methods accepted a valid reason to expect to be let out of a lease contract?

I feel like my friend is in the wrong here, but I'd love case law or US law examples to prove that he still owes the money!

Answer 1

If your friend thinks he can live there for free due to his unique interpretation of contract law, he is mistaken. He'll get evicted if he doesn't pay rent, and likely end up with a judgement against him for unpaid rent.

At its core, a rental agreement ensures that in exchange for paying rent, he may occupy the property. You can argue up and down about payment methods, but the fact remains he must pay rent in order to live there.

Your friend MAY have an argument that he could move out and not be subject to penalty for breaking the lease because the payment terms changed. He'd have to give notice and would still owe for the time he occupied the property.

There's just no way he can live there for free. He may find this out the hard way.

Answer 2

This situation is exactly why we have the concept of legal tender. Legal tender is a form of payment that must be accepted to settle a debt. Your friend is entitled to insist on paying the rent in cash — accepting any other form of payment is at the landlord’s discretion.

Answer 3

He entered into a contract to pay because he liked the payment methods offered

He entered into a contract. Full stop. End of story.

Therefore he is off the hook for repayment AND doesn't need to add a new method of payment

Your friend needs to look at the contract (or better, have someone who actually understands contracts look at it for him). He needs to understand not what he thinks it says or what he wants it to say or whatever farcical interpretation of contract law he's talked himself into, but what it does in reality say. Which, in every such contract I've ever seen, has never, ever, said "you will pay in the manner you choose and if we choose not to accept it then gosh darn you win and get to live here for free!".

I suspect your friend is in for a lot more very bad outcomes in life if he thinks this is how contracts, and life in general, works. :-)

Answer 4

1. __________ _________ ____________

2. Therefore, I get the outcome I want.

The human brain must think: it can't stop. If you don't believe me, try meditating.

The mental process of putting stuff in those blanks is called rationalization. This is a bored mind who wants something. If that mind is not particularly well disciplined, those things will get pretty unrealistic.

That is what has happened to your friend.

Landlords do not like drama. They do like money. Generally a landlord will be happy to take your money any reasonable way that they can achieve. It sounds like either your landlord lost the ability to do credit cards, or he got sick of paying the 3% overhead, or some other overhead costs that may be higher because he does not have the right credit card merchant service. For instance PayPal Here charges 2.70% flat, but a traditional swiper can cost up to $2000 a year in trumped up fees and charges.

As soon as the landlord calls the rent a debt, he has to take cash. But in most places, rental is at-will, and the landlord can evict for any reason or no reason at all (except race, creed, color, national origin, family, running a daycare center and a few other protected reasons)... and there's not a whole lot you can do about it. Even for a lease he can trump up a reason.

Your friend would be wise to have a meeting of the minds with the landlord about how he'd like to pay. Business is done by mutual consent, not non-consensual legal tricks. I agree, I wouldn't do ACH either.

One problem with ACH (or credit) is the landlord can charge anything he pleases, and that's when they start sneaking in devious surcharges for things. Once he's pulled the money out, you're really at a disadvantage to argue, since he already has the money. And it's really difficult to do a chargeback on part of a payment, so you end up having to chargeback the entire rent check, and now he can evict you.

Answer 5

There are probably specific laws that control landlord/tenant rent disputes. But your friend's argument assumes that there aren't. Let's assume that there aren't.

So there are two possibilities. Either the contract directly addresses this issue or it doesn't. If the contract directly and specifically addresses this issue, then that controls. Your friend is not claiming that it is specifically addressed.

So the general principle is this -- when something occurs within a contract that wasn't explicitly discussed by the parties, courts will try to figure out what the parties likely would have agreed to had they discussed the specific issue (without changing the agreed terms of the contract). This should produce the result that is fair to both parties.

Your friend is arguing then that had he and the landlord discussed the issue, the landlord would have agreed that in the event he is no longer able to accept credit cards easily, your friend could live there rent free.

That doesn't seem right to me. Does it seem right to you?

Much more likely they would have agreed that he might have some leeway to work out a new payment scheme and maybe some late rent should be forgiven if he made an attempt to pay on time but couldn't make arrangements. But I don't see more than that being reasonable.