We are preparing the lease for you under which the tenant is to make or may make rent payments by “direct deposit” into a bank account of the landlord.

 

In the event of nonpayment or an eviction, if the tenant direct deposits money after notice has been given or an eviction has been filed, it could be fatal to the eviction action.

 

In the event of a noncompliance of lease or law situation, the tenant may possibly direct deposit the rent while in an active noncompliance status, resulting in the landlord having to accept the noncompliance and not being able to take action at all against the tenant.  A tenant may have been nonrenewed and the tenant pays rent causing the nonrenewal to be jeopardized.

 

A tenant can and often will “partially pay” the rent with direct deposit, and the landlord will lose control of the situation.

 

If the landlord is not able to close out and cancel the bank account any time the owner wishes, a “direct deposit” arrangement can create a large problem for the landlord.

 

We will prepare the lease allowing for the “direct deposit,” but the landlord and property manager must understand the risks involved.

 

“Serving the Property Management Professional”

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