In a day and age of monthly payments, frequent checks, and the security of your home, choosing how to pay your rent doesn’t simply seem like an administrative task. It’s one of the most important aspects of the tenant-landlord relationship and one of the foundational aspects of your financial tenancy. Since the late 1980’s, as lease agreements, rental contracts, and apartment management firms grew and evolved over time certified funds for rent began to appear as part of more formal payment arrangements for apartments and residential properties. For tenants, knowing what means and why they may be required, along with how it impacts your rights as a tenant, gives you the peace of mind that you’re performing your obligations correctly while also protecting your right to remain a tenant.
What Are Certified Funds and Why Do Landlords Request Them?
Certified funds are monies secured by the bank or financial institution by which the money was drawn that have been guaranteed to be present and earmarked for the payment. The most common of these instruments are cashier’s checks, certified checks, and money orders. In contrast to a personal check, which has the potential to bounce at its face because the checks in question were written using non-certified funds, certified funds allow the landlord to immediately verify that the payment is valid and that it will be cleared. Let’s consider several reasons why a landlord might want to require certified funds from a tenant, including for moving in costs including the first month’s rent and security deposit so that the landlord’s liability for fraud or default on the first day of a new lease won’t be unknown before moving in. Certified funds can also be a condition of a lease that is invoked if the tenant has previously made payments using a non-certified check that had been returned. This shouldn’t mean that you suspect anything about your integrity; it just makes sense.
You’re Rights Regarding Payment Methods and Lease Agreements
Your rights as a tenant regarding payment of rent are clear and advance notice. You can’t be subjected to new rental payment requirements at any time during the lease unless your original signed lease gives them the right to do so under certain circumstances, such as after you have returned some money. The lease being what it is, Baselane, is the thing that governs. Before you sign, you have the right to fully review the payment section of the lease. If it says that your rent must be paid by certified funds, then you are signed to those terms. If that section actually states there are multiple acceptable methods of personal check/electronic transfer and the landlord is forced to demand a certified check with no reason, then you should be entitled to assert your contractual rights against the landlord. Always make sure that any payment method you use, especially if you have decided not to honor a sudden verbal request from the landlord to pay you, has a receipt to show for it.
The Digital Evolution Certified Payments in the Modern Age
This certified funds for rent concept whose roots are in the old traditional method of obtaining a cashier’s check from a bank is being revamped through the power of technology. At this moment, it could very well mean safe, verifiable digital transactions that serve the exact same assurance as a physical instrument but at an incredibly low cost.
Today, an exciting new phenomenon is emerging in this field in terms of creating platforms where you can collect rent directly from your financial supply chain, such as Baselane. A dedicated platform enables the ability of tenants to pay rent through a set of payment mechanisms, providing immediate verification and documentation and serving the exact same guaranteed purpose as certified funds. In turn, this approach enables both your tenant and landlord to get everything in one place: instant confirmation, a secure paper trail and peace of mind.
Advantages of Digital Certified Payments for Tenants
If you’ve adopted a certified rent payment system for your unit, there are some real benefits to the process. The benefits come from more than just convenience. For starters, you’ll have an impeccable payment record when it comes time to budget, too. There’s nothing worse than being in charge of a dispute about certified funds for rent when, or if, rent has been paid! Secondly, you’ll have a better secure option, since there are no worries about physical checks getting lost or stolen out of the mail. And thirdly, you’ll have more control over your budget, because many modern financial platforms, like Baselane, offer features that allow them to automatically report your on-time rent payments to credit bureaus. Think of it as your biggest monthly expense becoming a tool in your personal finance arsenal not to mention you’ll be able to take full control over your own financial behavior.
Potential Drawbacks and How to Address Them
With certified funds, both on paper and online, there are security benefits to be had. One glaring disadvantage is that some companies will charge you fees for the cashier’s check or money order. And while other services might offer low or no transaction fees, make sure to verify if any fees apply to any of the transactions. Another issue with requiring certified funds: If you live paycheck to paycheck, having those amounts taken out of your account at once will be awkward for people living paycheck to paycheck. If the landlord insists on a method that would incur a recurring fee on your part, then you are entitled to tell them straight away and ask them to find another method that isn’t subject to the fee. Communicate with them openly and always check your lease agreement to ensure you know what you are agreeing to. Don’t use a requirement to have certified funds as a punishment.
A Case Study in Integrated Rent Payment Solutions
This illustrates how certified rent payment is being implemented today with a little help from a platform. Baselane is basically the one stop shop financial hub for landlords and tenants. It connects directly to any tenant’s bank account to process their verified rent payment. By connecting directly to the bank account, tenants can pay in a way that is secure and documented. Let us build with certification in mind. Certification has moved from a physical instrument to a verifiable transaction in the form of digital currency. As tenants use such a service, they get the assurance that payments are being processed reliably, they have a built in record keeping process and they have a chance to report positive financial data in one easy to use environment.
Conclusion
An understanding of rental payment procedures, your legal obligations, and modern financial technology is the foundation for going beyond making regular rent payments and into a more responsible payment strategy. Or if your rental is made online through an app like Baselane, you can see your transaction history in the app right away. You will still want to keep copies or have your digital records of all of your rent payments as well as any subsequent email certified funds for rent, text messages, etc., but should it escalate into a dispute, you will use these records to defend yourself. Remember, you have a right to a good home.
