October 28, 2014
Most lease agreements require the tenant to pay rent on the first of the month to secure her right to occupy the property for the remainder of that month. This is referred to as a future rent payment. Nonpayment of rent is the most common cause for a landlord’s decision to file an eviction proceeding. By the time a landlord decides to pursue an eviction, it is quite often the case that the tenant is three or more months behind on payments. During the course of the litigation, the tenant typically falls further behind on payments. The tenant then owes past due rent, for liability already incurred, in addition to the normal future rent payments. Sometimes the tenant offers to bring his past due delinquency current, and resume making future rent payments to the landlord. The question that then confronts landlords is whether they may accept payments from the tenant and lawfully continue forward with the eviction proceeding at the same time.
Recently, in Urban Partnership Bank v. Mosezit Academy, Inc., the Eighth District Court of Appeals of Ohio highlighted the important distinction between a landlord’s acceptance of past due rent and future rent payments during an eviction proceeding. In this case, there was no dispute that the tenant breached the lease by failing to make the monthly payments. The trial court terminated the lease and ordered the tenant to vacate the property.
The tenant appealed the trial court’s decision, and argued that the landlord waived its right to eviction by accepting rental payments during the eviction process. On review, the Eighth District Court of Appeals noted that an eviction cannot proceed if the landlord has waived the notice to vacate. It further stated that it is a generally accepted rule in Ohio that a notice to vacate is deemed waived as a matter of law if the landlord accepts future rent payments after serving a notice to vacate. In contrast, if the landlord accepts payment for past due rent, the landlord does not waive the notice to vacate. In this case, there was no evidence that the tenant’s payments to the landlord during the eviction proceeding were for future rent. Accordingly, the appellate court upheld the trial court’s decision that the landlord did not waive its right to eviction by accepting the past due rental payments during the case.
This case should remind landlords that if they accepts future rent payments while pursuing an eviction, the notice to vacate will be deemed waived and the eviction should be dismissed. On the other hand, landlords are permitted to collect past due rent during an eviction case. Landlords must be prepared to argue this point to the judge in the event that the tenant moves for a dismissal of the eviction based on the payment of past due rent.
The Finney Law Firm has extensive experience in both residential and commercial leasing disputes. Please contact our office if you have any questions about current or prospective leasing arrangements.