Rental Payment Methods That Landlords Must Accept
Landlords may not always have the right to dictate the forms of rent payment they will accept, as this depends on state laws and the terms of the lease. For example, in Texas, if a specific method of payment is not stated in the contract, the landlord cannot refuse to accept cash payments and must provide a written receipt. You should check the laws in your state and find out which forms of rent payment you are legally required to accept, if any.
Collecting Rent Online
There are many websites and apps that allow tenants to transfer money to the landlord. These sites include Venmo, PayPal, and Zelle, which require both parties to create an account or download an app.
Money is then transferred electronically between the accounts. Transfer times vary from immediate when using Zelle, to 30 minutes to one business day when using PayPal. Currently, Zelle does not charge any transfer fees, but you will incur fees when using Venmo or PayPal for business transactions.
Advantages and Disadvantages of Collecting Rent Online
Advantages of Using Person-to-Person Payment Apps
There are some significant advantages if you allow tenants to pay rent using payment options like Venmo or Zelle.
Quick Money Transfers: These apps allow for money to be transferred directly to your account. The tenant will enter your contact information and the amount due, and the money will be sent directly to you. Zelle will transfer funds immediately if both users have an account, while Venmo may take 30 minutes to process the transaction, and PayPal can take 30 minutes to one business day.
Easy Payment: It is very easy for tenants to pay via PayPal, Venmo, or Zelle. Neither party needs to go to the bank to withdraw or deposit cash. Neither party needs to drive to another location to pay or collect rent. With the click of a button, money is quickly transferred from one party to the other.
There’s a Record: Some person-to-person payment services may provide a record of payments from the account holder. While you should keep your records, having a digital record of payments can be helpful in case you or your tenant need to clarify a misunderstanding.
Disadvantages of Using Person-to-Person Payment Apps
Paying the Wrong Person: If the tenant does not have your correct contact information, they might pay the wrong person and may not be able to get their money back. Typically, the tenant would have to contact the person to whom the money was incorrectly sent in an attempt to recover the funds.
Transaction Fees: Zelle does not charge any fees, but Venmo and PayPal do impose small processing fees on business transactions. People often try to circumvent these fees by not declaring it as a business transaction, but you risk having your account shut down if the company finds out.
Automatically Accepting Partial Payments: Venmo and Zelle will automatically accept partial payments. With PayPal, you can choose not to accept payments automatically. Since you cannot reject the payment, a tenant can send you any amount they choose, and the money will automatically be sent to you. If you are evicting the tenant for non-payment, the process could be repaired or halted if you accept any amount from the tenant. Thus, a tenant could send you one dollar through Venmo and stop or postpone the eviction process.
Frequently Asked Questions
Is Venmo a safe way to pay rent?
There are some risks with a tenant paying through Venmo. They might send the money to the wrong person. Additionally, you cannot reject payments on Venmo, which could affect eviction proceedings.
Does…
Can I use Zelle to collect rent?
You can use Zelle to collect rent. Zelle does not charge any fees for transactions.
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Source: https://www.thebalancemoney.com/how-to-use-zelle-for-p2p-payments-4159819
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