BILL ANALYSIS �
SB 1055
Page 1
Date of Hearing: July 3, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
SB 1055 (Lieu) - As Amended: June 14, 2012
PROPOSED CONSENT
SENATE VOTE : 39-0
SUBJECT : Landlord and Tenant: Payments
KEY ISSUE : Should a tenant be permitted to pay rent and
security deposit by a payment form that is neither cash nor
electronic funds transfer, except as specified?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This non-controversial bill amends existing law to specify that
a landlord cannot unilaterally require that a tenant pay rent or
security deposit through an electronic funds transfer. Existing
law already prohibits a landlord from requiring a tenant to make
a payment in cash (except where the tenant has previously
written a bad check, as specified). This bill would extend that
provision by similarly prohibiting requiring payments through
electronic fund transfer. Nothing in existing law, or under
this bill, would prevent a landlord and tenant from mutually
agreeing to make payments by electronic transfer. Earlier this
year the Committee heard and passed, on consent, AB 1679, which
permitted a landlord to return a security deposit by electronic
fund transfer if the tenant agrees to it. This bill is in that
same spirit, giving both landlord and tenants the flexibility to
use multiple payment options so long as both sides mutually
agree. This is a relatively rare landlord tenant bill that is
supported by both landlord and tenant groups. There is no known
opposition to this bill, and it has not received any negative
floor or committee votes to this point.
SUMMARY : Permits a tenant to pay rent and security deposit by a
payment form that is neither cash nor electronic fund transfer.
Specifically, this bill :
SB 1055
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1)Requires a landlord or landlord's agent �landlord] to allow a
tenant to pay rent and security deposit by at least one form
of payment that is neither cash nor electronic funds transfer,
as defined, except as specified.
2)Specifies that nothing in this bill shall enlarge or diminish
a landlord's legal right to terminate a tenancy.
3)Specifies that nothing in this bill shall be construed to
prohibit the tenant and landlord from mutually agreeing that
rent payments may be made in cash or by electronic funds
transfer, so long as another form of payment is also
authorized, as specified.
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.
(Civil Code Sec. 1947.3.)
COMMENTS : This non-controversial bill amends existing law to
specify that a landlord cannot unilaterally require that a
tenant pay rent or a security deposit through an electronic
funds transfer. Nothing in existing law, or under this bill,
would prevent a landlord and tenant from mutually agreeing to
make payments by electronic transfer.
This bill is, in part, a response to a lawsuit filed by four
elderly residents in an apartment complex in South Los Angeles,
who allege an online-only payment requirement instituted by
their management company, and characterized by that management
company as an attempt to "go green," was actually an attempt to
drive them out of their rent-controlled apartments. Management,
they alleged, knew they could not use computers and sought to
replace them with students from the University of Southern
California and other younger tenants who would pay higher rents.
ARGUMENTS IN SUPPORT : According to the author, a growing number
of landlords no longer accept cash, checks, or money orders from
tenants, requiring instead that rent payments be made
electronically. This reduces the stock of available housing for
populations that do not have Internet access or have limited
SB 1055
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Internet access - the disabled, the elderly, and the poor. The
Los Angeles City House Department has issued a recent warning to
at least one apartment-management group, telling the firm to
cease and desist the practice of requiring electronic payment.
The author and sponsor believe that this issue is particularly
important in rent-controlled localities, where eviction based on
the inability to pay electronically can be a pretext for the
desired removal of a long-settled and unwanted tenant. This
bill does not prohibit the use of electronic payments. It
simply prohibits landlords from requiring tenants to make
electronic payments. Tenants who wish to make electronic
payments may do so, assuming their landlords have the capability
to accept.
REGISTERED SUPPORT / OPPOSITION :
Support
Western Center on Law and Poverty (sponsor)
California Apartment Association
Opposition
None on file
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334