L.A. Landlords are Urging Renters to Pay Online. Here's Why That Might be Illegal

The following article was originally published April 3, 2020, and republished through a collaboration with KPCC and LAist.

Story by David Wagner

With rent now due for the first time since the coronavirus pandemic hit, many L.A. landlords are urging their tenants to pay rent online.

In many cases, landlords say the purpose is to promote social distancing and prevent the spread of infection.

But some tenants are uncomfortable with the push to pay online, which is allowed but cannot be the only option for payment.

'WE WILL NOT BE REIMBURSING YOU FOR THE FEE'

John McCormick has been renting his West Hollywood apartment for 10 years. He typically pays rent by dropping off a check at the building manager's apartment. But this month was different.

"I received a phone text from my building manager that told me their main office was going to be closed," McCormick said. The text instructed him to pay his April rent online.

But when he paid online by credit card, McCormick was charged a "convenience fee" of $48.

He emailed his property management company — Ritz Properties, Inc. — to ask for a reimbursement of the fee.

A Ritz representative wrote back that if he had set up payment directly from his checking account, he would not have incurred a fee. (McCormick said he was uncomfortable providing his personal banking information to a third party payments company.)

"We will not be reimbursing you for the fee nor will we do it next month if you choose to pay the same way," wrote the Ritz representative.

In response to the coronavirus situation, other landlords are waiving fees for tenants who pay online. LAist called and emailed Ritz to ask about their fee policy, but did not receive a response until after our story first published.

Ritz Vice President Ben Foster, in an email sent Saturday, wrote, "As an essential business, we are doing everything in our power to practice social distancing."

Foster said McCormick was given the option of mailing his check. In correspondence provided by Ritz, McCormick said he was concerned about using that method after being told that he would be held responsible if the check did not arrive.

McCormick told LAist, "Personally, I think it makes great sense to limit our interactions. And if a credit card can do that, that's great. It just has to be reasonable."

At attorney who represents Ritz told us: "The fee is for the credit card processor, not Ritz or the landlord, they don't receive any of it."

CAN L.A. LANDLORDS REQUIRE ONLINE PAYMENT?

It's certainly not illegal for L.A. landlords to give their tenants the option to pay rent online. Many renters may actually appreciate the convenience, especially now that they've been told to limit trips outside their homes.

What is illegal is requiring online payment to the exclusion of any other option. According to California state law, "A landlord or a landlord's agent shall allow a tenant to pay rent and deposit of security by at least one form of payment that is neither cash nor electronic funds transfer."

"It's absolutely a violation of state law," said Larry Gross, executive director of the Coalition for Economic Survival, a Los Angeles-based tenant's rights organization.

Gross advocated for passage of the law, which took effect in 2013. He felt vulnerable tenants were being targeted for eviction by online-only rent payment policies they could not comply with.

"We're talking about the lowest income people. We're talking about seniors. We're talking about immigrants. Those who are more likely not to have access, or the ability to use computers," Gross said.

Gross said those who would still prefer to pay by check should notify their landlord in writing.

West Hollywood renter John McCormick said he's fortunate to be able to afford a $48 online payment fee right now. But he worries about tenants who can't.

"If this was happening to a single mom or something like that, $48 can make the world of difference for this coming month that we're all in lockdown," he said.

UPDATES:

April 4, 11:30 a.m.: This article was updated with a response from Ritz Properties, Inc.

1:20 p.m.: This article was updated with the attorney's response about the fee charged and was edited for clarity about legal requirements.