I am renting a spot in a four-person student apartment in Utah, and recently got an email from my landlord announcing that they were switching to an online payment system and all tenants owed management $20. This fee is not a consequence for any of my misbehavior, is not mentioned in my contract, and they are not allowing anyone to opt out of using the online system to avoid the fee. To me this seems unfair and possibly mildly illegal, since I did not consent to this in any way. Is my landlord within their rights to do this?
I am a landlord and not a lawyer. For this reason, I have not done any legal research, however, given my experience, I will answer with a short:
No. Your landlord likely cannot do this.
Here is my reasoning behind this.
Each state law is different or course. I am answering as a licensed and bonded landlord and property manager in Pennsylvania and Maryland.
Whether you have signed a lease with the landlord or not, you are under a lease provided by the state as state law where no lease was provided. This is for your protection. You will have to read the lease carefully. You will find your lease has terms which includes your monthly rent and any fees governing late fees and any other fee typically covering pets, additional persons not on the lease, parking, etc. No lease can contain an open clause that allows the landlord to simply add fees at will. This would not be enforceable under contract law.
Unless otherwise stated, no additional burden can be added within the term of the lease and in many cases requires notice even for month to month leases. For example, if you have a 1 year lease, the terms of the lease cannot be changed until the lease term has expired 1 year after signing and even then may require 30 day notice under the law.
In other words, if it is not in the lease or in the law, the landlord cannot change the terms of the lease to create an additional burden. It is a contract and falls under contract law, landlord tenant law, and possibly other laws.
While I understand the desire to have electronic payment, an additional fee is unnecessary and the requirement not likely legal. For example, not everyone is able to or can afford to make online payments. It requires a computer, computer skills, an Internet connection, etc. Even without these things, it could require making a payment using a computer at the library or at a payment center. Not everyone is able to travel at will such as the elderly or poor. Additionally, this likely requires a bank account. Many do not have bank accounts and make payments using a card such as one provided for social security or disability payments. Often, these folks have little options except to use cash, money orders, or cashiers check. Simply requiring an electronic payment, even if specified within the lease, can be a burden that is not enforceable or wise.
Also consider State and Federal Law. It may likely be illegal to refuse cash payments or payments via money orders or cashiers checks. While some businesses can require payments other than cash, many businesses cannot refuse cash payments. It has been a long while since I researched this, however, as an example, a retail business likely cannot refuse cash.
Also consider that electronic payments of one type may not be legal. For example, while it is wise to require a variety of electronic payment options, requiring only one payment method may require a burden that cannot be enforced. It is possible that some states require that if an electronic payment is to be required, then a variety of payment methods will be required. Some may require accepting payments from payment centers which can be a store or bank.
One last consideration. Some states define commercial rental businesses as being more than X units and have different laws that govern how they can operate. These are often significant. It is possible that if your landlord is a commercial rental business, they are required to take cash, checks, money orders, cashiers checks, etc., and require an office with standard office hours for such things.
Further research on this may be required and would be wise.
As a personal opinion, electronic payments are not always as easy to track or as convenient as your landlord thinks. I used to make and take electronic payments and have stopped simply because it is a pain. Each payment method has its rules and laws that are harder to keep track of. Personally, if a tenant wants to pay me in cash, my hand is out while I say "Thank You."