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Actions Speak Louder Than Works

This is an age-old saying that can apply to a landlord/tenant relationship. Many property owners do not realize they can alter a contract by their actions, or in many instances, a lack of action. Often landlords are reluctant to issue a Pay or Quit Notice to a tenant, but when they do not pay rent in a timely manner, it is important. The following story is true, although the names are fictitious.

Mrs. Smith, a landlord, took the necessary precautions to initiate a lease that provided all the important and necessary clauses when renting to her tenant, John. He moved in and the first month the rent was due, it did not arrive on time. Mrs. Smith waited a few days and then contacted John, who informed her that he would be paying the rent, but not until the fifteenth of the month. Although Mrs. Smith was not satisfied with this answer or arrangement, she agreed, and accepted his explanation that he had some unusual medical bills. She waited for the rent without issuing a Pay or Quit notice and John eventually paid the rent on the seventeenth of the month. This became the pattern of John’s tenancy – he did not pay the rent on time, Mrs. Smith would contact John a few days after the first of the month, he would give a variety of excuses, and although disgruntled, Mrs. Smith would agree. She never issued a Pay or Quit notice and John paid the rent sometime between the 15th and the end of each month. In addition, John was not taking very good care of the property on either the inside or the outside. However, because the rent was always an issue, Mrs. Smith was afraid to complicate matters by bringing up the condition of the property. This situation continued for eighteen months. Finally, Mrs. Smith decided the entire rental situation was unacceptable and she issued a Pay or Quit notice on the second of the month without first contacting John. The Pay or Quit Notice period ended and the rent remained unpaid. Mrs. Smith contacted John and he stated he would not have the rent until the fifteenth of the month. Incensed, Mrs. Smith contacted her attorney and started immediate legal action to evict her tenant without relaying all the facts regarding the rent payments and the condition of the property. John engaged a free Tenant Legal Aid service and answered the eviction. In court, Mrs. Smith’s attorney argued that John had not paid his rent according to his contract and was not taking care of the property. John’s attorney produced every paid rent receipt arguing that Mrs. Smith had altered the contract with “implied consent” by allowing him to pay on or after the fifteenth every month and had never discussed the property condition. The law generally defines “implied consent” as a manifestation of consent to something through conduct, including inaction or silence. Under oath, Mrs. Smith had no choice but to admit she had always agreed to accept the rent after the 15th and never issued a notice regarding either the rent or the care of the property. Fair or not, the judge ruled that John could remain in the property as long as he brought the rent current and Mrs. Smith was responsible for her attorney’s fees. After her court experience, Mrs. Smith was reluctant to initiate any other legal action until John was over two months behind in his rent. In the end, John did not protest the second eviction, abandoned the property with four months of rent in arrears, and left a lot of property damage. Mrs. Smith incurred more legal fees and decided it was time for professional property management. Normally, tenants do not challenge an eviction, most eviction attorneys prevail, and the judge rules in favor of the owner on a Pay or Quit Notice. However, Mrs. Smith’s acceptance of the rent after the fifteenth for so many months created a verbal contract, which provided a loophole for the Tenant. She failed to apprise her attorney of all the material facts. The moral of the story is that serving a timely Pay or Quit Notice is crucial when the rent is unpaid. Generally, a notice will prompt a Tenant to pay the rent and avoids an eviction/unlawful detainer action. As your Property Manager, we know that although serving a notice is unpleasant, it is sometimes necessary to “Protect Your Investment.”

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