QUESTION: My association refuses to accept cash for payment of assessments. I thought U.S. currency was legal tender for all debts.
ANSWER: Associations can set their own policies for how assessment payments are made. All will accept checks (until they bounce) and some will accept credit cards but most refuse cash because of the risks involved. The U.S. Treasury website addressed a similar question as follows:
I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?
The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy. [See "Legal Tender Status".]
: Associations needing legal assistance can contact us
To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter