Palo Alto Weekly

Real Estate - June 25, 2010

RentWatch

Is there a grace period when rent is mailed?

by Martin Eichner

Q For the past four years I have paid my rent at the on-site manager's office. Our new management company now wants the rent sent to them through the mail. I think there is a five-day grace period if the rent is required to be mailed. The manager disagrees. Who is correct?

A According to Civil Code Section 1962(f), "If the address provided by the owner does not allow for personal delivery, then it shall be conclusively presumed that upon the mailing of any rent or notice to the owner by the tenant to the name and address provided, the notice or rent is deemed received by the owner on the date postmarked, if the tenant can show proof of mailing to the name and address provided by the owner."

In other words, if you obtain a proof of mailing or certificate of mailing notice at the post office when you mail the rent, the rent is considered received and thereby paid in full. This is true even if the rent is not actually received at the office of the property owner or management company on the rent due date.

If the rent is received and the postmark is something other than the date the rent is due, a property owner or their agent can serve a 3-Day Pay Rent or Quit notice to a tenant. Regardless of the manner designated for payment of rent, there is no law requiring a landlord to grant a grace period. However, if your rental agreement provides for a grace period, the landlord must honor it.

Q In the memo section of the security deposit refund check I received the landlord has written "payment in full." I disagree with some of the deductions. Can I cash the check and still continue to disagree with the amount?

A Unless you have agreed to accept whatever the landlord refunds to you as full and final payment, the notation in the check memo section is not valid. Civil Code Section 1526(a) states "Where a claim is disputed or unliquidated and a check or draft is tendered by the debtor in settlement thereof in full discharge of the claim, and the words 'payment in full' or other words of similar meaning are notated on the check or draft, the acceptance of the check or draft does not constitute an accord and satisfaction if the creditor protests again accepting the tender in full payment by striking out or otherwise deleting that notice or if the acceptance of the check or draft was inadvertent or without knowledge of the notation.'

In your situation, you are the creditor and the landlord is the debtor. Since you did not agree to accept the amount refunded to you, the notation should be lined out and initialed. You can then safely cash the check. Additionally to make your position totally clear, you can add your own notation such as "balance in dispute."

Q Unfortunately I made a mistake when depositing my payroll check into my checking account. As a result, my rent check bounced. The manager sent me a bill for bank fees of $100 along with a copy of my agreement, which allows for the fees. I think this is too high since the error was a mistake and not intentional.

A Civil Code Section 1719 allows for a fee not to exceed $25 for the first check passed on insufficient funds and an amount not to exceed $35 on each subsequent check passed on insufficient funds. Therefore, if this were the first insufficient rent check the landlord has received from you, the $100 could be considered excessive.

Besides the allowed fees of either $25 or $35, your rental agreement may also contain language stating other miscellaneous fees. To be enforceable, these miscellaneous fees must be reasonably related to any actual inconvenience or damage to the landlord, rather than a penalty. All of these fees can become cumbersome and difficult to collect by a landlord.

If you value your tenancy you may voluntarily offer to pay the bank fees to avoid a 3-Day Notice to Pay Rent or Quit. By the way, no fees are allowed by Civil Code Section 1719 if an account had insufficient funds as a result of a delay in the regularly scheduled transfer of, or the posting of, a direct deposit of a Social Security or government benefit assistance payment.

Q For years, it has been my policy to collect a last month's rent deposit from new tenants. When the tenant gives a notice to move, I require that current month's rent be paid and then I refund the original "last month's rent" after the tenant moves and the security deposit is settled. A prospective tenant says requiring the last month's rent to be paid "twice" is not allowed. Is this true?

A The prospective tenant is correct if the original "last month's rent" paid was specifically designated as "last month's rent" either in the rental or lease agreement or on any receipt you issued at the beginning of the tenancy. In this case, you can't collect rent again for the last month of the tenancy.

However, if the amount of the last month's rent originally collected is not specified as such to the tenant, then it is considered to be part of the security deposit and doesn't have to be considered as "last month's rent." In that situation, the tenant should pay rent for the last month of the tenancy.

To avoid misunderstandings of how monies paid at the beginning of a tenancy are defined, you should state in writing as to how they are designated, i.e., deposit, last month's rent, keys, etc. Remember that the overall total cannot exceed twice the monthly rent for an unfurnished apartment regardless of how the money is designated.

Martin Eichner edits RentWatch for Project Sentinel, an organization founded in 1974 that provides landlord tenant dispute resolution and fair housing services in Northern California and administers rental-housing mediation programs in Palo Alto, Los Altos and Mountain View. Call 650-856-4062 for dispute resolution or 650-321-6291 for fair housing or e-mail mediate4us@projsen.org.

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