Accepting Rent from A Resident In Default

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June 8, 2016
Phil Querin
MHCO Legal Counsel
Querin Law

One of the most troubling dilemmas of park owners and managers is whether to accept rent when the resident is already in default. This can be a trap for the unwary, and can result in a  waiver of the  landlord’s right to  demand that the resident vacate  the mobile home park/community.

 

Here are some rules which may be helpful:

 

 

Rule 1.        Do not accept rent if you know that the tenant is in violation of the Park Rules and you intend to issue a 30-day notice of default.  Example: If the tenant has an unpermitted pet or has someone living with him/her who has not applied for residency as a tenant do not accept rent if you are planning to give the tenant a 30-day notice of default.  As soon as you are aware of a violation give the appropriate written notice to the tenant.  If the notice is simply a warning asking the tenant to correct the situation it probably is safe to accept rent since you are asking the tenant to cooperate voluntarily, rather than actually terminating their tenancy.

 

Rule 2.        Do not accept performance by a tenant if it varies from the terms of the rental agreement or Rules and Regulations.  If the rental agreement provides for a late charge after the 4th day of the month, you should not accept late rent on the 5th day or thereafter without assessing the late charge.  A consistent pattern of accepting late rent without assessing the late charge may be construed as a waiver of the right to do so later.  This is also true where you have not assessed it against one tenant and then try to assess it against another.

 

Rule 3.        Unless you and the tenant have agreed otherwise in writing, you will waive the right to terminate a rental agreement for nonpayment of rent if you accept partial rent after issuing a 72 or 144 hour notice.  The reason is simple: Oregon law says that you may avoid a waiver and accept partial rent, if the arrangement is set forth in a written agreement signed by both parties.  Say, for example, that following issuance of a 72 or 144 hour notice to pay rent you enter into a written agreement with the tenant which provides that you will accept a partial payment of $100 on the 10th with the balance to be paid by the 20th.  If the tenant pays the $100 but fails to pay the balance on the 20th as agreed you may immediately file for eviction.  However, your written agreement with the tenant should also include an express provision that if the balance is not paid as agreed – no new 72 or 144 hour notice will be required before filing the eviction.  

                                                                                            

Rule 4.        If you  have already issued a 20 or 30-day notice for violation of the park rules you may accept rent so long as it is prorated to the termination date specified in the notice.  Never accept a rent tender which extends beyond the period in the rules violation notice.  For example, if on May 15, you gave the tenant a 30-day notice which requires correction by June 15th, you should only accept rent from the  tenant  for the first  15  days of June.     Accepting a full  month’s  rent  means  that  the tenant  has“bought” the right to remain in the park for all of June – which is inconsistent with your demand that he/she cure the violation or vacate by the 15th.  If the violation notice is for 30 days and its delivery can be put off a few days it is recommended that it be issued on the first of the month so no proration would be required.

 

Rule 5.      If you have filed an eviction against the tenant “for cause”  you may accept rent beyond the period in the notice if (a) you give the tenant written notice that acceptance of rent will not waive your right to proceed with the eviction and (b) the amount paid does not extend beyond the date the rent is tendered.  You should not accept rent prospectively.  For example, assume that (a) your 30-day notice on May 15 expressly notified the tenant of your right to accept rent without waiver and (b) you filed an eviction on June 16th, and (c) on June 25 the tenant tendered rent up to June 25 – you could accept it.  In other words, acceptance of a tenant’s rent solely for the period he/she has already been there will not constitute a waiver of the right to continue your eviction against the tenant.

 

Rule 6.        You may serve a 72 or 144 hour notice of nonpayment of rent upon a tenant against whom you have already filed an eviction for cause.  This is expressly allowed by Oregon Law.  Although the statute does not specifically say so, it is strongly recommended that the amount sought in the 72 or 144 hour notice not demand payment for period beyond the date of issuance on the notice.  For example, if you filed for eviction on June 1 because of an uncured rules violation on June 8th you could issue a notice for nonpayment of rent – however, the notice should only demand rent for the first 8 days of June.  If you waited until June 25 to issue the nonpayment notice you would demand rent for the first 25 days of the month.

 

Admittedly, these rules can be confusing.  If you have any questions you should speak to an attorney familiar with landlord-tenant laws.  If in doubt, refuse the tenant’s rent tender until you are absolutely sure that acceptance will not constitute a waiver of your rights.  If the defaulting tenant mails in a rent check for more than is acceptable based upon the above rules or places it in a drop box at the office it should be promptly returned within six (6) days.  Holding on to such payment beyond that time could give rise to the argument that you waived your right to proceed with the eviction.

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