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Post dated checks requirement?

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Post dated checks requirement?

Postby msa620001 » Mon Dec 04, 2017 12:33 pm

My daughter's lease on a NYS (outside NYC) apartment says that we must provide the landlord with post dated checks for each month of tenancy unless expressly waived in writing upon signing of lease. Lease was signed back in April, and we did not provide post dated checks at the time (no waiver was provided), and the landlord did not ask for them.

We have had ongoing problems with the apartment, including a long delay in the landlord fixing a dangerous porch condition. The relationship with the landlord remains difficult. And now the landlord is asking for post dated checks. I am not inclined to provide them, as our experience leaves me concerned that I will be obligated to spend money to make repairs the landlord wont perform, and don't want to have post dated checks in his hands. I want to pay monthly. We are entirely up to date on rent.

As I understand it, an eviction process can be undertaken only for a "substantial" violation of the lease. My uneducated guess is that failure to provide post dated checks, while remaining in compliance with rent payments, would hardly rise to the level of "substantial" in terms of a lease violation. So...can I just ignore the emails asking for those checks, and just continue to pay the rent as due (less any required repairs the landlord fails to perform)? Thanks.
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Re: Post dated checks requirement?

Postby TenantNet » Mon Dec 04, 2017 1:16 pm

In NYC - and I presume elsewhere - a LL can seek possession, generally for non-payment of rent, lease violation and nuisance. There might be other grounds, but that usually covers most cases.

For post-dated checks, I would not do it. You can get into real trouble with something like this. Just google "Landlord" and "post-dated checks" to see some of the issues involved.

See what the lease says. It might require rent on the first of the month, and then mention the post-dated checks. Those two clauses would seem to contradict each other.

Be aware that banks often will ignore the dates on checks.

Here's a thread on this forum (you have searched here, haven't you?)
http://tenant.net/phpbb3/viewtopic.php?f=4&t=5687

Post-dated checks essentially denies you the option to withhold rent, or exercise the right to the Warranty of Habitability. I would be careful about spending your own money for repairs as not all courts recognize the practice of "spend and deduct." If you do, make sure you have absolute records of notifying the LL by cert. mail, give him many opportunities for him to do the work and get several quotations for any work performed.
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Re: Post dated checks requirement?

Postby msa620001 » Mon Dec 04, 2017 2:12 pm

Thanks. The lease says "total rent shall be paid in monthly installments of $xxx" and then goes on to discuss post dated checks. I guess monthly installments could conflict with post dated checks...or maybe not. The lease also contemplates late fees...which also seems to perhaps conflict with post dated checks (unless they bounce, I suppose).

I understand the advice regarding spending our own money (my daughter is a student; I pay the rent) on repairs. At the same time, I don't want to lose the ability to withhold rent, exercise the WofH.

Am I correct that not providing post dated checks, particularly with the landlord asking for them six month into the lease and after problems with repairs, shouldn't be a problem for us, and does not fall into the basis for LL seeking possession as you've outlined (non-payment of rent, lease violation, nuisance)? Or could we have problems given that the post dated check "requirement' is in the lease that we signed...thus, not providing is a lease violation?
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Re: Post dated checks requirement?

Postby TenantNet » Mon Dec 04, 2017 3:42 pm

The point is you're not in court, yet. Sure the LL can take you to court, but he would have to sue a) for rent that is not yet due, or b) a lease violation. A savvy lawyer would argue that the latter is a thinly-disguised attempt at the former. He would also argue that the LL is trying to set you up for something potentially illegal, i.e., NSF from the bank.

For now I would just keep paying rent one month at a time, and if things heat up I would consult with a local attorney that handles tenant cases.

Spending money on repairs can get tricky and often depends on the judge, and other facts in the case. Nothing enables the practice, but as far as I know, nothing prohibits it either.

Keep the repair issue separate and don't mix it up with the payment issue.

I didn't say it won't be a problem. I would bluff the LL and stand up for your rights, but know that it could get sticky.
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Re: Post dated checks requirement?

Postby Longtimer » Tue Dec 05, 2017 3:36 am

FYI - in many states including NY, the dates on post-dated checks aren't legally recognized by banks. What that means is if a post-dated check is submitted to a bank prior to the date on that check, the bank can deposit it right away, anyway. No bank is legally obligated to hold onto check until the future date that is written on it (and in some states, post-dating checks is totally illegal).

So, if the landlord deposits it before the date written and you don't have the funds in the account to cover it in full, it will bounce. And there's no stopping the landlord from depositing it early.

In general, I've found that unless I'm writing a post-dated check to someone I personally know and trust very well AND I circle the date AND I put a Post-it on it saying "Do not cash or deposit until [date]," post-dated checks can cause problems.

I'm not sure whether it is even legal for a landlord, or any business for that matter, to require post-dated checks as payment. Accepting them is one thing, but requiring them when banks don't even have to recognize the dates on them? I don't think so!
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Re: Post dated checks requirement?

Postby BubbaJoe123 » Tue Dec 05, 2017 7:17 pm

Longtimer wrote:I'm not sure whether it is even legal for a landlord, or any business for that matter, to require post-dated checks as payment. Accepting them is one thing, but requiring them when banks don't even have to recognize the dates on them? I don't think so!


Excellent points on the (lack of) wisdom of using post-dated checks. On this point, though, I don't see why (absent something like NYC rent stabilization rules) the landlord couldn't require post-dated checks - after all, the landlord could require the entire year's rent be paid upfront...
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Re: Post dated checks requirement?

Postby TenantNet » Wed Dec 06, 2017 12:01 am

Bubba, some time in the last 25 years I saw a tenant attorney claim that requiring of rent prepayment beyond one month is not legal. Don't ask me for the citation. This was a long time ago. I am certain it's not legal for RS/RC units (not the case here).

Another issue raised elsewhere is what happens if you've paid upfront and the LL goes belly up?

From a comment in a NY Times article:

"If after a few, or several months, the landlord goes into foreclosure, you will never see any of that money returned to you. In foreclosures, banks do not honor leases. Even if you use the Internet to discover that the unit has no mortgage, at any point, an equity loan could be placed on it and go into foreclosure. Don’t do it, the risk is not worth any gain."

Also. NYS General Obligations Law § 7:30 requires:

§ 7:30. “Prepaid rent” must also be held in trust
§ 7:31. --Example: prepaid rent must be transferred to receiver

See http://tenant.net/phpbb3/viewtopic.php?f=15&t=4902

§ 7:30. “Prepaid rent” must also be held in trust

The General Obligation Law’s ambit extends to prepaid rent,[FN1] and provides that:
Whenever money shall be deposited or advanced on a contract or license agreement for the use or rental of real property as security for performance of the contract or agreement or to be applied to payments upon such contract or the contract or agreement when due, such money, with interest accruing thereon, if any, until repaid or so applied, shall continue to be the money of the person making such deposit or advance and shall be held in trust by the person with whom such deposit or advance shall be made and shall not be mingled with the personal moneys or become an asset of the person receiving the same, but may be disposed of as provided in section 7-105 of this chapter.[FN2]

[FN1] See e.g., In re Pal-Playwell, Inc., 334 F2d 389 (2d Cir 1964); Yasuda Trust and Banking Co. v Carven Assoc., NYLJ, 6/28/95, at 29, col 3 (Sup Ct, NY County); Purfield v Kathrane, 73 Misc 2d 194 (City Civ Ct 1973).

[FN2] (GOL 7-103 (1) (emphasis supplied).

§ 7:31. “Prepaid rent” must also be held in trust--Example: prepaid rent must be transferred to receiver

In a foreclosure case, the receiver sought an order directing the defendant-landlord to relinquish $52,000 in prepaid rent. While noting an absence of legislative history on the subject, the court held that the language of the General Obligations Law required that prepaid rent be held in trust, so as “to protect tenants from a landlord’s misappropriation of these funds[.]”[FN1] As a result, the court concluded that the receiver had standing and was entitled to the funds.

[FN1] Yasuda Trust and Banking Co. v Carven Assoc., NYLJ, 6/28/95, at 29, col 3 (Sup Ct, NY County). See GOL §§ 7-103, 7-105.
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Re: Post dated checks requirement?

Postby BubbaJoe123 » Wed Dec 06, 2017 5:17 pm

Don't get me wrong, I certainly don't think that paying a year upfront is a particularly good idea, and it certainly carries risks. I have seen it in a couple cases where the prospective tenant was new to the country and had no credit history, but had plenty of liquidity.
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Re: Post dated checks requirement?

Postby TenantNet » Wed Dec 06, 2017 5:26 pm

Whether legal or not, I do not know if a judge - either in NYC or upstate - would buy the LL's argument seeking possession if the issue went to trial. It might be "legal" if it's in the lease (not in NYC), but still, getting a judge to agree to an eviction on this sole ground is questionable in my opinion.
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