Can a Landlord Refuse Cash?

Americans are a mobile population, and millions choose to rent their homes instead of buying one. Many tenants pay by direct deposit, cashiers check, money order or personal check. However, tenants without a bank account may prefer to avoid the money order or cashiers check fees and pay their landlord with cash.

Legal tender is currency issued by a government for making purchases or paying debts. It only includes paper money and coins. Checks, money orders and other drafts are not legal tender. Even post office money orders, which the government issues and guarantees payment, are not legal tender.

Governments can limit which cash denominations they accept under certain circumstances. For example, you may only be able to use quarters at stations with subway turnstiles. Individuals and corporations are under no obligation to accept cash as a form of payment. They may choose to accept small bills only, no loose change or no cash payments at all. For example, the fast food drive-through may refuse large denomination bills.

Landlords usually state the acceptable forms of payment in the lease. If your lease states that all rental payments must be by check or direct deposit, then your landlord can refuse cash. There is no federal law mandating that individuals or private companies must accept cash. Some states have laws regarding rental payments, so if your lease does not specifically state that cash is prohibited, then check with your local landlord-tenant association for any variances in your area. Some laws may only apply to rental complexes of a certain size, but not to an individual landlord who rents out one house.

Since tenants renting month-to-month do not have the protection of a lease, they have to make their rent payments in whatever form their landlord prefers. He may change the payment terms during your tenancy. For example, if you have lived in the same rental for two years and paid cash every month, your landlord can decide to only accept check or money order payments for future months.