Phil Querin Q&A - Partial Payment of Rent - Landlord's Rights

Want access to MHCO content?

For complete access to forms, conference presentations, community updates and MHCO columns, log in to your account or register.

December 7, 2016
Phil Querin
MHCO Attorney
Querin Law

Question: A resident stops by the manager’s office on the 5th of the month and offers to pay $150 of the $350 of rent that is due, and promising to pay the remaining $200 by the 15th of the month.  The tenant claims that the landlord must accept the partial payment.  What are the landlord's options?  Can the landlord refuse the partial payment?  Where do you draw the line - say a 72 hour notice has been issued - does that change the partial payment scenario?

 

Answer: The Oregon landlord-tenant law does not “require” that a landlord accept partial payments.  To the contrary, it provides that it is a “tenant’s duty regarding rent payments is to tender to the landlord an offer of the full amount of rent owed within the time allowed by law and by the rental agreement….” 

 

A landlord may refuse to accept the tender of partial rent of rent that is not paid on time. However, if the landlord agrees to accept a partial payment of rent he/she may do so, although it should be clearly described in a well-drafted written agreement. 

 

Such partial payments do not constitute a waiver of the right to later demand prompt performance in the future.  Nor do they prevent the landlord from terminating the tenancy if the balance of the rent is not paid as agreed. 

 

However, there are some pitfalls that the landlord must be aware of: Acceptance of a partial payment waives the right of termination if accepted after issuance of a 72-hour or 144-hour notice of termination.  

 

When presented with a partial payment issue, landlords are wise to closely review ORS 90.417.  Lastly, consistent application is important – i.e. if the landlord has permitted partial payments by some residents, he/she would be hard-pressed to disallow others the right to do so without good reason. 

 

Here are a summary of how ORS 90.417 applies to this case:

 

  • A tenant’s duty regarding rent payments is to tender to the landlord an offer of the full amount of rent owed within the time allowed by law and by the rental agreement.
  • A landlord may refuse to accept a rent tender that is for less than the full amount of rent owed or that is untimely.
  • A landlord may accept a partial payment of rent. Doing so does not constitute a waiver, if properly documented.  Here is what the landlord must do to avoid waiver:
    • The partial payment must have been made before the landlord issued a 72-hour or 144-hour notice for nonpayment.
    • The landlord must enter into a written agreement with the tenant stating that the acceptance does not constitute waiver.
    • The agreement should provide that the landlord may terminate the rental agreement and take possession as provided in the Oregon FED laws if the tenant fails to pay the balance of the rent by a time certain.
    • The tenant must agree in writing to pay the balance by a date/time certain.
  • If the balance is not paid according to this written agreement, the landlord may serve a 72-hour or 144-hour nonpayment of rent notice – but it must be served no earlier than would have been permitted under the rental agreement and the law, had no rent been accepted.[1]
  • Notwithstanding a landlord’s acceptance of a partial payment of rent, the tenant continues to owe the landlord the unpaid balance of the rent. In other words, acceptance of partial rent does not eliminate the duty to pay the balance. 
 


[1] This somewhat confusing statement is meant to avoid a situation where the agreement for partial payment called for payment of the balance before rent would have otherwise been due. For example, if rent is due on the first and late on the 7th, then the earliest a 72-hour or 144-hour notice could be served would be the 8th day of the month.  Thus the agreement for payment of the balance of the rent may not require that the tenant pay it before the 7th day of the month.