Rent Payment Methods and Rent Reporting in California

A California landlord must allow tenants at least one way to pay rent that is neither cash nor electronic funds transfer, may not charge a fee for paying by check, and must accept rent from a third party who signs the statutory acknowledgment (Civil Code § 1947.3). Separately, many landlords must offer tenants the option of having on-time rent reported to a credit bureau, at lease signing and at least once a year, for a fee of no more than the actual cost or $10 a month, whichever is less (Civil Code § 1954.07, AB 2747). Individual owners of buildings with 15 or fewer units are generally exempt from the reporting rule.

This is general information, not legal advice. Laws change; confirm the current text and your situation with a California attorney.

At a glance

Payment methods: what Civil Code § 1947.3 requires

At least one non-cash, non-electronic option

The landlord must allow at least one form of payment that is neither cash nor electronic funds transfer. The parties may agree that rent can be paid in cash or by electronic transfer, as long as another form of payment is also authorized (§ 1947.3(e)). A lease cannot make online payment, or cash, the only choice.

No fee for paying by check

Since January 1, 2025, a landlord may not charge a tenant a fee for paying rent by check (SB 611).

Cash-only after a bounced check

If a tenant's check bounces or payment is stopped, the landlord may require cash for up to three months. The landlord must give written notice that the payment was dishonored and attach a copy of the instrument. If requiring cash changes the lease terms, the landlord must also give notice under Civil Code § 827 (§ 1947.3(a)(2)).

Rent paid by someone else

A landlord must accept rent from a third party if the third party signs the statutory acknowledgment stating that they are not a tenant. The landlord may require a signed acknowledgment for each payment, or agree that one covers multiple payments, and must accept the statutory form. Accepting third-party rent:

• does not require the landlord to join a Section 8 or other assistance contract;
• does not extend the rent due date;
• does not require accepting rent after the period in a three-day notice to pay rent or quit has run.

(§ 1947.3(a)(3) and (a)(4))

How payment methods show up elsewhere

• Three-day notices. A notice to pay rent or quit must state the amount due, the name, telephone number and address of the person to pay, and one payment method: the usual days and hours for in-person payment, or a bank account at an institution within five miles of the rental, or a statement that a previously established electronic transfer procedure may be used (CCP § 1161(2)). See three-day notices.
• Deposit refunds. Since January 1, 2026, if the landlord received the deposit or rent electronically, the deposit balance must be returned electronically unless the landlord and tenant agree in writing on another method (Civil Code § 1950.5(h)(1)(A), AB 414). See security deposits.
• Late fees. California sets no statutory dollar or percentage cap on residential late fees; a late fee in a residential lease is judged under Civil Code § 1671(d). See late fees.

Rent reporting: what Civil Code § 1954.07 requires

The offer

A covered landlord must offer each tenant the option of having positive rental payment information reported to at least one nationwide consumer reporting agency. Timing:

• for a lease signed on or after April 1, 2025, at the time the lease is signed;
• for a lease already in place on January 1, 2025, by April 1, 2025;
• after that, at least once a year.

The offer goes by first-class mail or email. A mailed offer must include a self-addressed stamped return envelope. The election form must say that reporting is optional, name the agencies, state the fee, explain how to submit the form, say the tenant may opt in at any time, explain that a tenant who opts out cannot opt back in for six months, give opt-out instructions, and include a signature block (§ 1954.07(c) to (e)).

The fee

• The fee is the lesser of the landlord's actual cost or $10 per month, and nothing if there is no cost.
• Not paying the fee is not grounds for eviction, and the fee may not be deducted from the security deposit.
• The fee is never reported to a credit bureau, and rent payments may not be applied to the fee.
• If the fee goes unpaid for 30 days or more, the landlord may stop reporting, and the tenant then cannot opt back in for six months.

(§ 1954.07(g), (h))

Repair-and-deduct is not a late payment

A tenant who repairs and deducts or withholds rent under Civil Code §§ 1941 to 1942 keeps those rights after opting into reporting. The deduction is not treated as a late payment, and the tenant must notify the landlord before the rent is due (§ 1954.07(k)).

Who the reporting rule applies to

The exemption for 15 or fewer units is lost only when both conditions are true: the landlord owns more than one residential rental building (of any size), and the landlord is a REIT, a corporation, or an LLC with at least one corporate member (§ 1954.07(j)(1)). So a corporation or corporate-member LLC that owns two or more rental houses is covered, even though each house is a single unit. Assisted housing developments are excluded separately (§ 1954.07(j)(2)).

What owners should do

1. Offer a paper option. Make sure the lease allows at least one method that is neither cash nor electronic transfer, and remove any check fee.
2. Use cash-only only as the statute allows: after a dishonored payment, for up to three months, with written notice and a copy of the instrument.
3. Accept third-party rent when the payer signs the statutory acknowledgment, and keep the signed form.
4. Track how rent is paid. If you receive rent electronically, plan to return the deposit electronically unless you have a written agreement on another method.
5. Check whether you are covered by § 1954.07 using the table above. If you are, send the offer at lease signing and at least annually, with the required election form, and keep the fee within the limit.
6. Match your three-day notice to how you take rent, listing who to pay and a valid payment method.

What tenants should know

• You can always pay by a method that is not cash or electronic transfer, with no check fee, and someone else can pay for you after signing the acknowledgment.
• If your landlord is covered by § 1954.07, you can choose to have on-time rent reported. It is optional, and the fee cannot exceed $10 a month or the landlord's actual cost.
• If you paid rent electronically, your deposit refund should come back electronically unless you agreed in writing to another method.

Step-by-step guides

For the practical side of this rule, see these guides in the California Rental Handbook:

• Writing the Rent Clause: Due Date, Payment Methods, Receipts and Fees
• What Records to Keep for a California Rental
• Lease Signing Day: A Checklist for California Owners and Renters
• Signing a California Lease: Copies, E-Signatures and Who Signs

Local rules

Some California cities add local tenant rules on top of state law. Coronado has no local rent-control or just-cause ordinance as of October 2026 (based on a review of its code's contents); see the Coronado Rental Guide. Other San Diego County cities may differ; check your city's municipal code.

Recent and upcoming changes

• January 1, 2025: no fee for paying by check (SB 611) and the rent reporting law (AB 2747) take effect.
• April 1, 2025: first deadline to offer rent reporting for existing leases, and offers at signing for new leases.
• January 1, 2026: electronic deposit return when rent or the deposit was paid electronically (AB 414). AB 1414 lets tenants opt out of a bundled third-party internet subscription, and deduct its cost from rent if the landlord violates the rule (Civil Code § 1942.8).
• January 1, 2026: during a mandatory disaster evacuation order, the tenant's rent obligation is discharged; rent already paid must be returned within 10 calendar days after the order lifts, or the tenant may deduct it from the next month's rent (Civil Code § 1941.9, SB 610).

See every dated item in California landlord law changes for 2026 and 2027.

Frequently asked questions

Can a California landlord require rent to be paid online only?

No. Civil Code § 1947.3 requires the landlord to allow at least one form of payment that is neither cash nor electronic funds transfer. The parties may agree to electronic payment as long as another form is also authorized.

Can a landlord charge a fee for paying rent by check?

No. Since January 1, 2025, § 1947.3 bars charging a tenant a fee for paying rent by check.

Does a landlord have to accept rent from someone who is not on the lease?

Yes, if the third party signs the statutory acknowledgment that they are not a tenant. The payer acknowledges in writing that they are not a tenant. Accepting the payment does not extend the due date, and does not require the landlord to join a Section 8 or other assistance contract.

Do single-family landlords have to offer rent reporting?

Not if the owner is an individual or an LLC whose members are all natural persons. A REIT, corporation or LLC with a corporate member that owns two or more rental houses is covered and must make the offer.

What happens if a tenant stops paying the rent reporting fee?

Unpaid fees cannot lead to eviction or come out of the deposit. If the fee is unpaid for 30 days or more, the landlord may stop reporting, and the tenant cannot opt back in for six months.

McKee Properties manages rentals from its Coronado office; contact us with questions about your property.

Sources

• Civil Code § 1947.3 (opens in a new tab)
• Civil Code § 1954.07 (opens in a new tab)
• AB 2747 (2024), chaptered text (opens in a new tab)
• SB 611 (2024) (opens in a new tab)
• Civil Code § 1950.5 (opens in a new tab)
• Code of Civil Procedure § 1161 (opens in a new tab)
• Civil Code § 1671 (opens in a new tab)
• Civil Code § 1941.9 (opens in a new tab)
• AB 1414 (2025) (opens in a new tab)

Verified October 19, 2026.