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legalgems, Arbitrator
Category: Real Estate Law
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Experience:  Just Answer consultant at Self employed
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My landlord requires me to pay rent on the 1st of the month

Customer Question

My landlord requires me to pay rent on the 1st of the month via an ACH draft through an automated online rental payment system. I've had my payments setup in this automated system, for the past 4 months, to take place on the 26th because in most months that is around the time I get paid, on average anyways. This month, however, I went into the automated rental payment system and scheduled my rent payment to be drafted from my checking account on the 1st instead of the 26th because, this month, the 1st is the day I get paid (it's via direct deposit).
I promptly received an email from my landlord stating that she noticed I changed my rental ACH draft for the 1st this month instead of the 26th and she warned me that the system takes 4 - 7 business to post payments to her account and that my rent would be considered late and that I would incur a $50 late rental fee if not posted to her account before or on the 1st.
The lease agreement that I signed states that "rent is to be paid before or on the 1st of the month." It does not state that rent is to be posted to the landlords account before or on the 1st. FYI, the landlord selected this particular rental payment system after I signed the lease agreement, therefore, the lease doesn't have a stipulation for the delay in processing times for various rental payment systems. In other words, The landlord could decide tomorrow that she wants to go with another payment system because this current Cozy payment system is not written into the lease nor are the delay times.
My question is: when rent is required via an online auto draft system how does the law look at late payments? Is rent considered received on the date it is initiated in the online rental payment portal or on the date that it is posted to the landlords checking account?
If I had kept it set at the 26th this month as I had it setup in prior months then there would not have been sufficient funds in my account to cover rent for this month. Is my rent considered late, in the eyes of the law, as it is in my landlord's eyes.
Side note: the rental payment portal actually posts a draft to my checking account on THE day that I schedule it (1st of July). In other words the money is withdrawn from my checking account on THE 1st. Moreover, the payment Status, in the rental payment system, also updates to reflect that "payment is in progress" so the landlord can go in the system, on the 1st, and see the status that payment is in progress. There is however that 4 - 7 day delay until it posts on the landlord's end to her checking account.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  legalgems replied 1 year ago.

Rent is typically considered Paid on the date of receipt, not by the post mark date or the date the payment was authorized. If the lease does not require use of a certain method, then the tenant is free to pay rent in the manner chosen (ie physically handing payment, using the mail, etc).

If the landlord chooses a portal that has a longer delay, then one can request an extension based on the 4-7 day delay; the tenant cannot insist on it; nor can the landlord insist on a payment method that is not specified in the lease.

Expert:  legalgems replied 1 year ago.

Checking in on the above;

Have a great 4th.

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