Waiver

I have requested that a tenant remove his items from a common area in my building. So far he has not done so, but he has sent his rent for the month. Can I cash the check or will that waive my right to ask him to remove his things from the common area?

This question brings up a common legal doctrine, and potential landmine in our industry, known as “waiver.” Waiver is defined as the intentional or voluntary relinquishment of a known right. In this case, if there is a clear lease covenant prohibiting storage of personal property in building common areas, the landlord would generally have the right to issue a three-day notice to perform or quit (followed by an eviction action if the tenant failed to remove these items within the three-day period) unless the landlord has waived the right to enforce this lease rule. The courts have defined waiver in the residential landlord-tenant context to include the acceptance of rent with the knowledge that a breach of lease is occurring. As such, if the landlord was aware of the items in the common areas, and had demanded that the tenant remove these items, and then thereafter accepted the rent while the items remained, the tenant could argue that the waiver doctrine should preclude an eviction for breach of the lease provision prohibiting such storage. Unfortunately, the court would probably accept this defense and deny the landlord the ability to evict. (Conversely, if the landlord accepts rent with no knowledge of a breach, and then subsequently learned of the problem, waiver may not be an issue.)

Many leases, including the SFAA 2012 Residential Tenancy Agreement, contain an anti-waiver clause, which states that the landlord’s prior waiver should not act to preclude a subsequent attempt at enforcement. Some landlords rely on the anti-waiver clause when they accept rent with knowledge of a breach and then turn around and try to evict the tenant. However, many courts nowadays hold that you also waive the anti-waiver covenant when you accept rent knowing that there is a breach! So please keep this in mind before you cash the rent.

In sum, it is never a good idea to process rent when you know that the tenant is breaching the lease and you want to rectify that breach. Depositing rent under these circumstances may very well preclude you from enforcing the lease violation through eviction. Even though you are entitled to the payment, if you want to preserve your right to enforce the lease, you need to hold onto it until the tenant cures.

In addition, if the tenant fails to cure the breach during the three-day period and an eviction is pending in court, you cannot process monthly rent. Instead, you, or your attorney, need to return the rent to the tenant with a letter stating that the rental debt is not being forgiven, but rather rent is being returned until the eviction action is resolved. Otherwise, if you cash a rent check during an unlawful detainer (eviction) proceeding, the action will likely have to be dismissed. This inability to process rent during a breach, and, if the breach is not cured, during the court action, places a tough financial burden on owners, but because of the waiver doctrine this hardship is necessary.

DW

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