EFT, Small Claims, Minor Maintenance and SSN#’s

EFT, Small Claims, Minor Maintenance and SSN#’s

Q: I encourage my tenants to pay rent by electronic funds transfer. I use a lease which states “If Resident fails to pay the rent in full by the end of the 3rd day after it is due, Resident shall pay a late charge of $100.00 as additional rent…” One tenant seems to initiate the EFT later than the 1st day of the month, but I can’t be certain of what day it is; and if that day is a weekend or holiday, I see no sign of her payment in my bank until the following bank business day. That can mean I see the payment on the 5th or 6th day of the month. Is her rent late? When is rent legally considered paid? If my tenant gives me a check on the 3rd day of the month, and that day is a Saturday and I deposit it that day, I can see a pending transaction immediately, but the funds are not available to use until the next bank business day. With a check, I know when the transaction is initiated and completed. With an EFT, I only know when the transaction is completed.

A: When rent is paid by EFT, it is considered received by you when it is credited to your account. It is immaterial when the tenant initiated the transfer, the date which the funds actually are credited to your account is controlling. In the case of a check or draft delivered to you, it is the date which you actually receive the actual check or draft. You have control over the funds/payment instrument upon deposit of funds or receipt of the actual check. Of course, the specific terms of your lease control.

Most leases require that the resident “deliver” the rent to you on or before the first. This eliminates the old “check is in the mail” excuse. However, some “creative” landlords insist on writing their own “special” terms on their leases, and if those special terms require the tenant to “mail the check to a PO Box” or put it in a “drop box,” then these terms may alter the date of payment, and in some cases may shift the risk of loss in the mail to you the landlord rather than the resident. Additionally, if the account number provided for the resident to make his EFT to is incorrect and the delay is caused by the landlord’s incorrect instructions, then the resident will be provided additional time. For these and many other reasons, it is very important not to alter the language provided to you in your apartment association forms, they typically anticipate these types of situations.

Q: I recently had the pleasure of spending my entire morning watching small claims cases come and go, while waiting for my own. The more I watched, the more I realized that it is a highly “subjective” area, and prone to a lot of “creative” testimony. Needless to say, by the time my case was called my confidence level had been reduced several notches. I guess I did ok, at least better than most, but I’m not sure what I could have done that would have helped. Can you give me some pointers that will help me out next time?

A: If landlords and tenants are meeting in small claims court, it usually is because the tenant is suing the landlord over a security deposit, or the landlord is suing the tenant over damages done to the unit over and above the security deposit, or some combination of the two. Whatever the underlying cause of action, there are many things a landlord should do that would greatly reduce the chances of being brought into a suit or if a suit is brought, will greatly increase the landlord’s chance of prevailing.

Proper tenant screening at the inception of the tenancy will effectively weed out the “habitual” litigant. By verifying past tenancies, many former landlords will volunteer past disputes and their outcome with you. Using the proper rental agreement will also aid you in a future lawsuit by clearly identifying rights and duties of all parties during the tenancy. A properly completed move-in inspection form signed by the tenant establishes a baseline in which to determine future damage. Proper documentation recording requests for repairs, actual repairs made, defining the cause of the needed repair, and correspondence documenting any alleged breach by the tenant, such as over-crowding, failure to clean or maintain or other misuse of the premises will help.

Upon the tenants moving out of the unit, it is important to carefully prepare a move-out checklist detailing any and all damage to the unit. Make note of excessive damage to walls, or carpet covered with pet stains or ground in dirt and oil. Remember that you are required to properly account for the security deposit within 21 days of receiving possession, charging the tenant only for damages and cleaning in excess of ordinary wear and tear.

Stay away from any “standard cleaning fee”, only pass on proper deductions. If the tenant damaged it, don’t be afraid to charge him for it; conversely, if the tenant left the premises in the same condition as when he got it, then refund the deposit. One last thing, if you go to court, be prepared, be organized, and be truthful.

Q: Seems like I’m always clearing out a clogged drain or fixing some other minor problem generally caused by my tenant. Trouble is, I don’t live near the units, and calling a plumber out for such routine repairs is way too expensive.

Is there a way to pass this responsibility on to the resident?

A: Yes, the responsibility for minor maintenance and repair items can be negotiated as part of the rental agreement. You cannot require your tenant to waive his right to live in a habitable unit, but you can require the resident to take responsibility for minor repairs and maintenance that may be required during the course of the tenancy. A provision requiring the resident to maintain the drainage lines, the toilets and the garbage disposal will require the resident to either perform the repairs and maintenance or hire a professional to do it for him. Stoppages in the main line caused by root or other causes will typically be an obligation reserved to the owner, while clogged drains, toilets and garbage disposals may be delegated to the resident to repair.

Q: A prospective resident recently applied for one of my rentals. He seems nice and all, but when he filled out the application, he left a blank where his Social Security Number should go; he said he didn’t have one. He had a California driver’s license, and something called a Matricular Consular card. He seemed a bit combative when we discussed this issue, and said that his attorney said I had to rent to him, that I couldn’t discriminate against him, as long as he could afford the rent. Must I rent to him? How do I verify any of his information?

A: Proper tenant screening results from the proper use of a variety of tools. Credit reports and eviction reports are two of the best tools available to predict the ability of the prospective tenant to perform his obligations. Qualification of a resident goes far beyond ensuring that “he makes enough money” to pay the rent.

Verification of past rental history, tenant stability, and verification of his ability to honor his credit obligations, as well as determining the likelihood of his continued employment are all fair game in evaluating a prospective tenant.

Like it or not, our country’s system of storing information on each of its citizens uses one’s Social Security or Taxpayer Identification Number as the primary identifier. A Matricular Consular card is merely an identification card issued by a foreign country and is not valid for identification in the United States. In order to work in the United States legally, one must have a Social Security Number or a Taxpayer Identification Number. It is illegal for an employer to hire an individual without a valid Social Security or Tax Identification Number.

Identity theft is rampant in California, and it is incumbent upon all credit providers, including landlords, to ensure that the person that fills out the credit application truly is who he says he is. Many tenant’s rights advocates, and that is exactly what they are, advocates, advancing the rights of tenants at the expense of landlords, insist that it is discriminatory to require a Social Security or Taxpayer Identification Number when evaluating a prospect.

You as a housing provider have a legitimate business purpose in determining the credit worthiness of a proposed resident, and not only to predict his ability to timely meet his rental obligations, but you must determine his ability to continue to meet those in the future. Further, in the event you had to pursue this individual in the future due to a breach of the agreement, you must assess the risk in searching for and locating this individual should you need to collect a past due amount. A consistently enforced policy of requiring a Social Security or a Taxpayer Identification Number in order to screen your prospective residents does not violate Fair Housing laws and does not constitute illegal discrimination.


This article is presented in a general nature to address typical landlord tenant legal issues. Specific inquiries regarding a particular situation should be addressed to your attorney. Stephen C. Duringer is the founder of The Duringer Law Group, PLC, one of the largest and most experienced landlord tenant law firms in the country. The firm has successfully handled over 285,000 landlord tenant matters throughout California and has collected over $200,000,000 in debt since 1988. The firm may be reached at 714-279-1100 or 800-829-6994. Please visit www.DuringerLaw.com for more information.