In this article, we answer the questions, “can a landlord require tenants to pay rent by ACH transfer in Illinois?” and “can an Illinois landlord require a tenant to pay rent via specific methods?”
A reader asked the following question: Can the landlord/property manager require that the tenant pay rent via specific methods? Our company gives tenants the option of using an automatic ACH service (pulled from their accounts by us), which most of them use. However, we also allow personal checks and cash as rent payment methods. To make our rent collection process more efficient, we would like to require some form of online payment such as the ACH mentioned previously, or some other online tenant initiated payment. Essentially, we would like to stop allowing for personal checks and cash; not because collecting is a problem, but to simply be more efficient with the bookkeeping. Is this legal for us to require in the leases or would it be violating a law as discrimination? Thanks!
Answer: Many landlords prefer to be paid by electronic funds transfer or Automatic Clearing House (ACH) Transfer. The state of California has a statute that requires landlords to accept at least one form of payment in addition to electronic transfers. Illinois does not have a similar statute.
In Illinois, a landlord and tenant may agree in a lease that rent payments must be made by a particular method, including ACH transfer. The key to whether a landlord can reject certain forms of payment is whether this is specified in the lease. If your lease does not so specify, or if you do not have a written lease, you must accept cash, checks and money orders. However, when the lease comes up for renewal, you are free to negotiate restrictions on forms of payment in Illinois.
For more, check out: Illinois Tenant Law Explained.