The Paletz Law Blog

Opt-in to reading this before you hit “Send”

October 28th, 2021 | By: John M. Mione, Esq.

One of the many impacts of the COVID-19 pandemic is that it has accelerated the use of technology. In the rental housing industry, there are many ways this is being done. For example, more landlords may be sending notifications and receiving payments electronically, as opposed to by paper. But before doing so, landlords should be aware of the general guidelines governing these practices:

Text Messages:

The Telephone Consumer Protection Act (TCPA)[1] prohibits text messages unless made with the prior express consent of the receiving party. Exceptions are if the text messages are made for emergency purposes, free to the end user and have been exempted by the Federal Communications Commission (FCC), or made solely to collect debts “owed to or guaranteed by the United States.”

These TCPA restrictions apply equally to telemarketing and informational calls/texts. So, a text to inform tenants of due dates for payment would typically be considered covered by this category.

Thus, from a landlord’s perspective, unless one of these factors would apply, a landlord would be required to obtain prior consent from tenants before texting them, and to require an opt-out option within each text so the tenant can advise you to cease the text messaging at any time. The language advising the tenant of this would need to be clear and not misleading.

A landlord is also not permitted to use an “established business relationship”, such as a lease agreement, to avoid getting consent, and even seeking the consent as a condition of signing the lease may be deemed illegal. However, you can include a separate form within the lease or other agreement allowing them to check “yes” or “no” to receiving texts, and you may also be able to have the resident sign up online.

These restrictions also apply if a third party, such as a rental management platform, is sending out the texts. They would likewise need to obtain consent from tenants.

E-mail:

Below are some examples of the general requirements governing email communications, which differ slightly than texts:

• The CAN-SPAM Act[2] can allow direct marketing email messages to be sent to anyone, without permission, until the recipient explicitly requests that they cease (opt-out). However, both the location of the sender and the location of the recipient may have an impact on this as there may be additional jurisdictional laws to comply with. If a tenant choses to opt-out, this must be honored in a timely manner.
• Tenants need to be provided with a clear option to opt-out. For example, the opt-out language should be at least the same font size as the rest of the document.
• You must disclose the address of the entity sending the emails. Therefore, if they are coming from the landlord’s management office, the community address should be listed within the correspondence.
• The subject of the emails must be clear and not misleading.

Like texting, any third party sending out these notifications must also adhere to these guidelines.

Electronic payments:

For convenience, many landlords are now allowing and even in some cases mandating online payments. Although this is likely the way of the future (think of how often you can now use Apple Pay or a vendor’s mobile app to pay for goods), the issue with mandating online payments is it could be an example of  technology being more advanced than the law.  There could thus be legal ramifications and this potential liability risk should be considered before making any policy to this effect.

Beyond that, if you accept electronic payments, you will want to make sure you have a means to turn “off” the acceptance in certain circumstances, such as if you are seeking to terminate the tenancy. As outlined in our very first blog, acceptance of funds past the expiration date of a termination notice could void that notice. See our prior blog for more on this: https://www.paletzlaw.com/2017/05/24/termination-of-tenancy-a-friendly-reminder-from-the-1980s/

The Bottom Line: It’s tempting to take advantage of the convenience that electronic communications and payment can offer, but before doing so, make sure you are adhering to the applicable laws. As always, if you are unsure of how to proceed based on a specific instance, please reach out to the attorneys at Paletz Law.

The information contained in this article is only meant to be a basic overview and should not be construed as legal advice. Readers should not act upon this information without the advice of an attorney. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or otherwise be disseminated without the prior written consent of Paletz Law.

 

[1] https://www.fcc.gov/sites/default/files/tcpa-rules.pdf

[2] https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/can-spam-rule