BILL ANALYSIS Ó
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1055|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 1055
Author: Lieu (D)
Amended: 5/15/12
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 5/8/12
AYES: Evans, Harman, Blakeslee, Corbett, Leno
SUBJECT : Landlord and tenant: payments
SOURCE : Western Center on Law and Poverty
DIGEST : This bill prohibits a landlord from demanding or
requiring online Internet payments as the exclusive form of
payment of rent or deposit of security, as specified.
ANALYSIS : Existing law generally regulates the
relationship between landlords and tenants, including the
terms and conditions of the tenancies. (Civil Code (CIV)
Section 1940 et seq.)
Existing law prohibits a landlord from demanding or
requiring cash as the exclusive form of payment of rent or
deposit of security unless the tenant has previously
attempted to pay the landlord with a check drawn on
insufficient funds, or the tenant has stopped payment on a
check or money order, as specified. (CIV Section 1947.3)
Existing law permits a landlord to commence unlawful
detainer proceedings against a tenant for failure to pay
CONTINUED
SB 1055
Page
2
rent upon providing a three-day notice to pay rent or quit
(vacate). (Code of Civil Procedure Section 1161(2))
This bill prohibits a landlord or landlord's agent from
demanding or requiring online Internet payments as the
exclusive form of payment of rent or deposit of security in
any lease or rental agreement that is first effective on or
after January 1, 2013.
This bill provides that the above provision does not
enlarge or diminish a landlord's or landlord's agent legal
right to terminate a tenancy.
This bill provides that a waiver of the above provisions is
contrary to public policy and is void and unenforceable.
Background
Existing law governs the relationship between landlords and
tenants, and generally prohibits a landlord from requiring
a tenant to pay cash for his/her rent or security deposit.
SB 115 (Torlakson), Chapter 76, Statutes of 2004, enacted
that prohibition in response to concerns that some
landlords in the Los Angeles rental housing market were
demanding cash from tenants as the exclusive form of paying
rent. As noted in the Senate Judiciary Committee's
analysis for SB 115, the sponsor of that bill, Western
Center on Law and Poverty, asserted that legal services
attorneys had seen cases involving cash payments in rent
control areas where "a landlord seeking to force a tenant
to 'voluntarily vacate' so that the unit can be rented to a
new tenant at a higher rate may claim the rent was never
paid or offered in order to evict the tenant for
nonpayment. ÝT]his would result in a 'he said, she said'
situation before a judge. In such cases, the tenant
typically loses in the absence of some documentary proof of
payment (such as a rent receipt), which the unscrupulous
landlord will not provide."
This bill seeks to respond to a related issue of landlords
requiring their tenants to make rental payments online.
Similar to the above issues regarding cash payments, the
Los Angeles Times' March 7, 2012 article entitled L.A.
Tenants Battle Landlord's Online-Only Rent Payment Rule
CONTINUED
SB 1055
Page
3
reported:
Tenants and a state senator are battling a requirement by
a Los Angeles landlord that residents pay their rent
online, alleging that a "green" initiative introduced by
the company is actually a pretense to evict low-income,
elderly renters benefiting from rent-stabilization
provisions.
Elderly renters living in the Woodlake Manor Apartment
building in South Los Angeles have sued their landlord,
Jones & Jones Management Group Inc., alleging that their
digital shortcomings could leave them vulnerable to
eviction under the Woodland Hills company's new
requirement that they make all their payments online. . .
. "I am 86 years old and I am computer illiterate," said
Margaret Beavers, a resident in the apartments since 1963
and a plaintiff in the suit against the landlord. "I'd
have to buy a computer and learn how to use it; at 86 I
want to travel and do other things."
Dedon Kamathi, a 12-year resident of Woodlake Manor and
an organizer with the Woodlake Manor Tenants Assn., said
the move by Jones & Jones was as an attempt to exploit a
"digital divide" between the lower-income, largely
African American long-term residents in the building and
the higher-income renters that the company is actively
courting. . . . The company in its statement denied
that the refusal by residents to pay online would be used
as grounds for eviction proceedings and said the purpose
of the policy was to save paper. The company expressed
confidence that the situation would get "worked out."
"The objective was to 'go green' and make it easier for
residents to pay rents by having an online method," the
company said in its statement. "Indeed, the majority of
their residents are not unhappy using the online
process."
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/15/12)
Western Center on Law & Poverty (source)
CONTINUED
SB 1055
Page
4
AFSCME, AFL-CIO
BASTA, Inc.
California Apartment Association
City of Santa Monica
City of West Hollywood (if Amended)
Santa Monicans for Renters' Rights
ARGUMENTS IN SUPPORT : According to the author:
SB 1055 would make it clear that while landlords may
receive rental payments online, they cannot require
online rental payments as the only way to pay rent.
. . . This issue came to light late in 2011 when
hundreds of tenants in apartment complexes in Los Angeles
objected when the property-management group notified
residents of a 300-unit complex that the only way they
could soon pay rent was online. Many residents of the
rent-controlled complex said they were elderly, lived on
fixed incomes and knew nothing about computers. They
said they preferred to continue paying rent via checks or
money orders.
While trends may show more and more renters are paying
their bills online, landlords risk creating the
impression that they want those most reluctant to pay
online feel they are being pressured to either adopt a
lifestyle for which they don't feel ready or that the
landlord is pressuring them to move elsewhere.
The author further notes the Los Angeles City Housing
Department "issued a recent warning to at least one
apartment-management group, telling the firm to cease and
desist the practice," and that this bill provides
flexibility by "enabling landlords to still offer the
option of paying rent or a security deposit online but also
ensuring that rental payment by check or money order is
also allowed."
JJA:kc 5/16/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
CONTINUED
SB 1055
Page
5
**** END ****
CONTINUED