AB 2219 adds Section 1947.3 to the Civil Code to create new requirements for the form of tender of rent payments, landlord’s rights when tenants bounce checks, and the ability of tenants to pay via third parties. This last change is a rent-control red flag, but Section 1947.3 includes requirements to protect landlords from creating new rent controlled tenancies at the historic rental rate of another tenant.
First, a landlord must accept rent in at least one form that is neither cash nor EFT. Second, if the tenant bounces a check, a landlord can require payment in cash for up to three months (provided that they change the terms of tenancy formally, if this is not already in the lease).
Ostensibly to allow greater flexibility for tenants (but with little legislative history to suggest this is a significant concern), a landlord must now accept rent from a third party, at the tenant’s election. The mechanics of this call to mind the classic waiver trap of a subsequent occupant trying to pay rent to her master tenant’s landlord to directly establish a rent controlled tenancy. However, the landlord is only required to accept payment from a third party who is not a “tenant”. The landlord may (and really should) have the third party sign an acknowledgement that includes the following:
I, [insert name of third party], state as follows:
I am not currently a tenant of the premises located at [insert address of premises].
I acknowledge that acceptance of the rent payment I am offering for the premises does not create a new tenancy.
(signature of third party) _____
These new rules do not require a landlord to accept rent after a “three-day notice to pay or quit” has expired. They also do not require a landlord to enter a public housing contact with a Section 8 tenant. However, San Francisco landlords should be cautioned that explicitly refusing to enter such an agreement may now be actionable.