Rent Payment Laws in California

When it comes to paying rent, California law is very tenant-friendly. Tenants have a variety of methods for payment, can’t be charged overly high late fees, and may even be allowed grace periods for paying rent. Recent state legislation went even further to protect the rights of tenants, capping rent increases at 10 percent annually.

Tenants must have a payment option beyond cash or electronic transfer

Under California law, it's illegal for a landlord to require cash and/or electronic deposits as the sole methods to pay rent.¹ Landlords must allow a tenant to pay rent using at least one of these other options as well: check, cashier's check, or money order.

There is one exception to this rule. If a tenant’s rent check bounces—or the tenant requests a stop payment on a check—the landlord can require rent be paid only in cash for up to three months.¹ The landlord must inform the tenant in writing that rent will be due only in cash and provide a copy of the bounced or cancelled check.

Rent must be paid in full and on time

Rent must always be paid in full by the agreed-upon date, using one of the acceptable payment methods listed above. Paying only part of the rent in California can result in eviction—even if the landlord accepts the partial payment.² If a landlord does allow the tenant extra time to pay the remainder of the rent, there must be a written and signed agreement stating the remainder due, the due date, and any late fee.

Grace periods aren’t required in California

Rent is considered late if it isn’t paid by the agreed-upon date. Landlords don’t have to allow tenants a few extra days to pay rent in California, but can include a grace period in the lease agreement if they choose. If a grace period is stated in the lease, it should also mention the date on which a late fee will be charged.

Landlords can charge a late fee of up to 10 percent

When a tenant doesn’t pay rent on time, their landlord can charge a reasonable late fee (as long as there’s a written lease that mentions late fees). In this case, “reasonable” means that it’s based on any extra costs associated with the landlord receiving rent money behind schedule, such as a bank fee. Late fees can never be so high they are punitive.

A 2004 California court case decided that a $50 late fee was too high when a tenant was eight days late paying his monthly rent of $601—even though the late fee was written into the lease—because the landlord couldn’t prove he was negatively impacted by the late rent.³ Courts generally find late fees up to 10 percent of the rent to be acceptable.

Landlord can charge up to $35 for bounced checks

In California, it’s legal for landlords to charge additional fees if a tenant’s check bounces. Landlords can charge up to $25 for the first bounced check and $35 for each additional bounced check.⁴ Alternatively, landlords can charge the tenant whatever fees the bank charges for a returned or bounced check, up to $35.

Annual rent increases are capped at five percent

As of January 2020, California has statewide rent control.⁵ State law now caps annual rent increases at 5 percent of the monthly rent (plus inflation, which may bring the increase closer to 10 percent).

Landlords must give 30-day notice of rent increases

For rent increases of less than 10 percent, landlords must give tenants at least 30 days’ written notice.⁶

Rent can be paid by a third party

Landlords can accept rent from someone other than the tenant, such as a relative or business, if certain conditions are met.⁷ The third party must sign an agreement acknowledging they aren’t a tenant of the unit and aren’t establishing a tenancy by paying rent. Without this signed agreement, the landlord doesn’t have to accept a third-party rent payment.

Related articles

[1] California Civil Code §1947.3

[2] California Civil Code §1161

[3] Orozco v. Casimiro (2004)

[4] California Civil Code §1719

[5] California Civil Code §1946.2

[6] California Civil Code §827

[7] California Civil Code §1947.3