Nonpayment of Rent Tenant Default (Part 4)
We’re ending the year by bringing back our Learn Your Lease series because we think that having a good understanding of your lease and your state’s landlord-tenant law is the only way to protect yourself against unethical and predatory landlords. In 2023, we’ll do at least one Learn Your Lease topic each month. If there’s a topic that you have questions about or want to understand better, let us know.
NONPAYMENT DEFAULT
AKA “Can My Landlord Refuse to Accept My Late Payment?”
If you don’t know your rights as a tenant, you can’t enforce them. There are two main things that control your relationship with your landlord – your state’s landlord-tenant laws and the written lease agreement. Whenever you have a question or problem as a renter, the correct answer or solution (which isn’t necessarily the answer your landlord gives you) can nearly always be found in one or both of these places.
As we resume our Learn Your Lease series (earlier Learn Your Lease posts can be found here https://www.protenantagency.com/blog), we’ll use lease provisions and state landlord-tenant laws to answer questions that tenants have asked in some of the different tenant groups. Today’s tenant question is about late rent payments.
As you can see, the tenant’s rent remained unpaid as of the 15th of the month. On that date, the property manager told the tenant that the landlord had decided to not accept a late payment and to end the tenancy. The tenant is wondering whether the landlord can legally refuse a late payment.
The lease provisions that answer this question are the Rent Due Date and the Tenant Default sections. Here are the Due Date provisions from the leases of some of the Wall Street-backed single family rental (SFR) corporate landlords:
RENT DUE DATE PROVISION
It is under this lease provision that you agreed to the landlord’s condition that your rent has to be paid on or before the first day of each month.
LEASE DEFAULT PROVISION
The next thing to look at is what the lease says will happen if a tenant does not pay on or before the first day of the month. For this, we need to look at the Default provisions:
In this case, the American Homes 4 Rent lease says it most clearly. If a tenant fails to keep their promise to pay rent on the first day of the month, then the tenant has broken one of the key or most material terms of the contract with the landlord. As a result of breaking the promise to pay on the first, the tenant has defaulted on the contract.
According to the AH4R and Progress Residential leases, once the tenant breaks the agreement to pay, the tenant is immediately in default and the landlord has the right to immediately terminate the tenant’s right to occupy the property. The Invitation Homes lease says that the tenant is in default after it receives a written notice of default from the landlord and does not make payment by the time required in the notice. You might be wondering why there is this difference if they all have to follow the same landlord-tenant laws.
STATE LANDLORD-TENANT LAWS MATTER
The answer to that very smart question is something we cannot say enough – not everything that is in the lease is actually legal and compliant with state law. These landlords will do whatever they can to have an unfair advantage over tenants – including getting you to waive rights that you should have and writing the lease in a way to confuse you as to your actual right. This is a great example of why every person who rents a home should be familiar with their state’s landlord-tenant laws. As you can see from the sample state provisions below, a tenant’s actual rights regarding default can be very different from what is shown in the lease.
NONPAYMENT DEFAULT IN SELECTED STATES
Despite the AH4R and Progress Residential leases containing provisions that there is immediate default if a tenant does not pay on time, several states require that the landlord must give the tenant notice of the nonpayment AND then the tenant must fail to pay within a specified time before the landlord has the right to terminate the lease and take action to regain possession of the house. Quite importantly, in some states the law requires the landlord to accept the tenant’s payment if it is made within a certain amount of time after the default or before a judgment has been issued against the tenant.
OUR FINAL ANSWER
So, can the landlord refuse this tenant’s late payment and move forward with filing an eviction? We can’t say for sure because the tenant didn’t share the state that the rental is in. However, using the sample states above, if the tenant lives any place other than Georgia, received any required written notice and still failed to pay within the specified time, it’s quite likely that the landlord does have the right to refuse the tenant’s attempted late payment.