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[asking regarding state law in Ohio, U.S.A. only]

Recently I have noticed landlords issuing their residents a debit card with attached bank account. This is typically implemented without prior notice and often with an additional fee attached. Typically the landlord will have a preexisting clause in the lease that says the landlord may choose to amend the lease at a later date. The landlord then amends the lease to insist that rent payments are only accepted in the form of deductions from a landlord-issued debit card. The landlord then will not accept payments using traditional methods such as a check.

Word of mouth seems to be that these policies are illegal, but I have had difficulty finding information on this topic that is not from the card-issuing entities.

Can a landlord in Ohio (U.S.A.) legally impose a mandate on their existing residents that a bank account be opened in their name and used for rent payment? If landlords can or cannot, what section of the law defines who can and cannot compel a citizen into banking against the citizen's will?

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    This is a little unclear to me. Are you saying that the landlord requires payment via direct debit and if the tenants claims they don't have a bank account they open a bank account for them? I'm very surprised that a third party can open a bank account for someone else (excluding dependent minors perhaps).
    – Eric Nolan
    Commented Jul 6, 2019 at 22:17
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    Putting aside legality, this is weird. An easier solution to checks bouncing is to require cashier's checks or similar. These do come with some fees, but the hassle of getting one is on the person making the payment. Trying to open a bank account in someone else's name must be a lot more trouble, which actually doesn't sound like something a bank would even allow. (Or is it in the landlord's name? How does the tenant deposit then?) This sounds suspicious; I would look into whether there's some kind of scam related to it.
    – jpmc26
    Commented Jul 7, 2019 at 7:53
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    I'll bet my next paycheck -- badum-psh! -- that the quasi-scammers behind these fees-for-everything "debit" accounts are the same people behind the controversy where employees at minimum-wage-type jobs were/are being forced to use these high-fee debit accounts to receive their paychecks. It was in the news in the last couple of years somewhere, that these fees-for-everything accounts were being forced onto people through their pay. Rental tenants seem like a logical target for these quasi-scammers. Very payday-loan type of scum.
    – L0j1k
    Commented Jul 7, 2019 at 12:19
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    If this is the scenario you're in, I'd recommend talking to a lawyer who's qualified to practice law in your state.
    – nick012000
    Commented Jul 7, 2019 at 14:57
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    @EricNolan Be surprised at Pennsylvania, next door to OH. In PA, after 1 year of tenancy, either the landlord needs to show they are bonded for the amount, or tenant security deposits must be put in an escrow account for the benefit of the tenant, which in practice means the landlord opens an escrow account with the tenant's SSN (as the law also states the taxable interest belongs to the tenant, less an allowed fee) and puts the security deposit into it. 68 P.S. §250.511. This is different than the OP issue but a neighboring state has landlords open bank accounts in tenant name, full stop
    – user662852
    Commented Jul 9, 2019 at 15:11

2 Answers 2

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Typically the landlord will have a preexisting clause in the lease that says the landlord may choose to amend the lease at a later date.

While that may be in contracts, I don't see that holding up in court. You can't unilaterally amend contracts to add new terms without acceptance on part of the lessee. Any clause in the contract like that will require notification of the lessee of the change and a chance for the lessee to terminate the contract without recourse on part of the lessor. Generally this must be done in the same format as the original lease (written). Most jurisdictions don't allow for a verbal amendment to a written lease.

So in a way, yes, it is legal for a landlord to require payment via a certain method (like a direct debit from a bank account). They cannot however change the payment terms unilaterally without notification and acceptance. They can use language such as sending the notification (via registered mail) and then saying that a failure to respond is acceptance (because you are, by actions, accepting the terms by continuing to live there).

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    There’s also the fact that if you don’t accept the amended contract, your landlord may not be willing to renew your lease on the same terms when you need to renew. Local laws may affect whether the lease must be renewed on substantially similar terms, or how long the tenant has to vacate the premises if they don’t have a lease (i.e. they’re month-to-month.)
    – Michael Seifert
    Commented Jul 6, 2019 at 18:20
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    "They can use language such as sending the notification (via registered mail) and then saying that a failure to respond is acceptance (because you are, by actions, accepting the terms by continuing to live there)." That sounds rather flimsy to me. Acceptance requires an affirmative act that clearly shows intent.
    – Acccumulation
    Commented Jul 6, 2019 at 18:40
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    Unilateral variation clauses are legal, however, there is an implied term that the power will be used reasonably.
    – Dale M ♦
    Commented Jul 6, 2019 at 21:30
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    Not the OP, but can you address how the debit account incurring fees would affect the legality of requiring to use it?
    – jcm
    Commented Jul 6, 2019 at 22:50
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    @jcm Either one of two ways. The lessee pays the additional fee which is akin to an increase in rent (and again, the lessor can refuse and move and should be able to do so without paying a fine) or the lessor eats the cost in a reduction of income. The first case would this be a material change of the contract (a change in rent), which shouldn't be able to happen during the course of the lease term (not in the renewal period at least).
    – Ron Beyer
    Commented Jul 7, 2019 at 0:55
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This site on Ohio landlord/tenant law says:

Ohio’s landlord/tenant code does not include detailed rules when it comes to rental terms, but it does require that a landlord must include certain terms in the lease agreement. A tenant legally agrees to follow these rules when she signs the lease agreement.

...

The lease should state when rent is due and where and how the tenant should pay the rent. The landlord must usually accept at least two forms of payment. Common forms include certified check, cashier’s check, money order, personal check, direct deposit, or cash. Will the landlord come to the premises collect the rent each month? Does the tenant have to go to the landlord’s place of business to drop off the rent? Can the tenant mail the rent? Can the tenant pay the rent via an electronic funds deposit?

The site notes that there are many county and municipal level laws regulating residential tenancies, which might also apply.

I have not found any Ohio state law requiring that the landlord accept two forms of payments, or prohibiting a requirement that a direct debit card be used. However, under 31 U.S. Code § 5103 currency (US Paper money) is "legal tender for all debts", and I suspect that a landlord is required under that law to accept cash payment, although not to make change, as rent already due is a debt.

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