Phil Querin Q&A: Accepting Rent From Non-Tenant Occupants

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September 25, 2017
Phil Querin
MHCO Legal Counsel
Querin Law

Question:  When can a manager refuse payment by check? If the name on the check does not match the resident’s name can (or should) the check be refused?  Should there be a park rule to back this up? If the manager refuses payment because of the name on the check and asks for a money order or cash, does that have to be in the rules? All of this stems from the concern of unauthorized residents becoming tenants simply because a manager accepts a check for space rent when they are not an approved tenant.
 

 

Answer:  One issue is accepting rent from a person occupying the space after the legal tenant has moved out. This can occur, for example, where someone is residing at the space under a Temporary Occupancy Agreement, but the approved tenant, no longer resides there. Alternatively, the person could be a lawful visitor, who has overstayed their permitted time, and the legal resident has left. ORS 90.403 deals with this:

 

 90.403 Taking possession of premises from unauthorized possessor. (1) If an unauthorized person is in possession of the premises, after at least 24 hours’ written notice specifying the cause and the date and time by which the person must vacate, a landlord may take possession as provided in ORS 105.105 to 105.168 if:

  • The tenant has vacated the premises;
  • The rental agreement with the tenant prohibited subleasing or allowing another person to occupy the premises without the written permission of the landlord; and
  • The landlord has not knowingly accepted rent from the person in possession of the premises.
  • Note that service of a notice to terminate does not create a right of tenancy for the person in possession of the premises.

It can be fatal to a landlord’s effort to remove the non-tenant if rent has been accepted from them.  On the other hand, if the rent is in the form of a check or money order, and signed by the legal tenant, it makes no difference who delivers it.

 

But if the person is not the lawful tenant, I believe you have a right to refuse to accept the rental payment if it is in cash, or a check or money order in that person’s name. I’m not concerned that there is no rule on it, since the law is clear (at least to me) that if the person is not your “Tenant” – i.e. the one in possession under a rental or lease agreement – you do not have to accept a rent payment from them.

 

The other issue arises when a lawful resident resides in the space, but they have an occupant who has not been approved as a co-tenant or a temporary occupant.  If you are going to accept them as a temporary occupancy, get them on a Temporary Occupancy Agreement. You can do a criminal background check, but not a financial one, since they are there not to subsidize the tenant’s rent (as might be the case if they were a co-tenant).  Accordingly, do not accept rent in any form from temporary occupant, unless it is drawn on the tenant’s bank account and the check bears that out.

 

As to unlawful occupants who are staying at the space, but have not been approved as a tenant and you know of their occupancy, insist that they apply for tenancy, and make sure they do not stay beyond the time allowed for visitors under the park rules, until they have been approved. 

 

Note, the issue of waiver is not just a question of accepting a check from the unapproved person.  Acceptance of rent – even from the lawful tenant - when you know he or she is housing an unapproved person, can also result in waiver of your right to thereafter demand they vacate.

 

ORS 90.412 provides in part:

 

(2) Except as otherwise provided in this section, a landlord waives the right to terminate a rental agreement for a particular violation of the rental agreement or of law if the landlord:

(a) During three or more separate rental periods, accepts rent with knowledge of the violation by the tenant; or

(b) Accepts performance by a tenant that varies from the terms of the rental agreement.

(3) A landlord has not accepted rent for purposes of subsection (2) of this section if:

(a) Within 10 days after receipt of the rent payment, the landlord refunds the rent; or

(b) The rent payment is made in the form of a check that is dishonored.

(4)A landlord does not waive the right to terminate a rental agreement for a violation under any of the following circumstances:

(a) The landlord and tenant agree otherwise after the violation has occurred.

(b) The violation concerns the tenant’s conduct and, following the violation but prior to acceptance of rent for three rental periods or performance as described in subsection (2) of this section, the landlord gives a written warning notice to the tenant regarding the violation that:

(A) Describes specifically the conduct that constitutes the violation, either as a separate and distinct violation, a series or group of violations or a continuous or ongoing violation;

(B) States that the tenant is required to discontinue the conduct or correct the violation; and

(C) States that a reoccurrence of the conduct that constitutes a violation may result in a termination of the tenancy pursuant to ORS 90.392 (Termination of rental agreement by landlord for cause)90.398 (Termination of rental agreement for drug or alcohol violations)

 

So the take-away here is that you do not want to accept rent from anyone, even the tenant, when you know they are violating the rules, such as keeping an unapproved occupant at the space or having an unapproved pet. If you accept rent from the lawful tenant under these circumstances, return it within ten days after receipt – if the check has been cashed, write a new check back to the tenant with an explanation, and demand that the unpermitted person apply for tenancy.

 

Under the statute, waiver will not occur for the first two events of accepting the rent without returning is within ten days. The third or subsequent time can constitute a waiver. Waiver does not occur if the rent is properly returned within the ten day period, no matter the number of times it’s tendered.

 

As for taking a rent check from the unapproved person, I don’t recommend doing so unless the check is drawn on the tenant’s own account. If it’s a joint account with the unapproved person, don’t accept it. The same holds true of any other form of payment (e.g. cash or money order) unless there is clear evidence that it came from the lawful tenant. Just remember, though, that acceptance of rent from the lawful tenant – in any form – can count as a waiver under ORS 90.412 if you know they have an unlawful occupant at the space. 

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