The Landlord Who tries to Be Nice
You are a Landlord renting space to tenants. Your name is not Snidley Wiplash, you don’t dress in a black cape and top hat, nor do you have a long black handlebar mustache. As a matter of fact, you feel as though you are more of a Dudley Do-Right.
When your tenant failed to pay the full amount of the rent, you chose not to rush in with the Canadian Mounted Police, but instead cashed the rent check, and decided to wait and see how things go the following month. One month turned into two, and two turned into three, and so on. As the months ticked by, you realized that you needed to do something. After all, you do have a mortgage to pay on your rental property, and you pride yourself on always paying on time. The lower rental payments were starting to have an impact.
The next part of this scenario doesn’t need to be spelled out in detail. The experience is one too painful to relive. Suffice it to say that dealing with this tenant became impossible, the additional money under the lease was not to be forthcoming, and you have now been officially branded by this tenant as “Snidley Wiplash.”
Certainly the court system will be on your side, and you will be able to collect the rightful amount as stated in the lease agreement that you and this tenant signed, right? Not necessarily!
In a recent Ohio Tenth District Court decision (May 17, 2011, EAC Properties, LLC v. Brightwell, D.O.), the Court told the Landlord that its conduct of accepting the reduced amount of rent constituted a waiver of the right to collect the amount stated in the lease. The appellate court pointed out in the EAC Properties Case that the Landlord accepted the lesser rent for 13 consecutive months without objection.
Does this mean that a Landlord can never help a struggling tenant without waiving the Landlord’s rights? The answer is no, a Landlord can help a struggling tenant, but must do so carefully so that there is no misunderstanding. The key to the EAC Properties decision was not only the number of payments accepted, but also that the Landlord “knowingly” accepted the lesser amount, and did so, “without objection.” If a Landlord receives less than what is owed, and chooses not to evict, then a proper and documented workout needs to be made with the tenant, with proper acknowledgement that the Landlord has not waived any rights nor modified the lease.
The Tenants Who Scheme Against the Landlord
In Landlord lore, it has been rumored that there is a small select group of deadbeat tenants who scheme against Landlords to reside for free in their space, while thwarting any attempts of eviction, and share their successes amongst each other. This rumor has gained wider spread belief in light of a particular scenario that has stopped a number of Landlords from being able to proceed to an eviction hearing. The conspiracy theory has the United States Post Office as the co-conspirator with these deadbeat tenants.
The Ohio Eviction statutes provide that the count in an eviction complaint for possession can be served on the tenant by bailiff service (leaving it at the residence) as long as it is followed up with regular mail service. The possession count is usually served this way, because the hearing for possession is usually scheduled fairly quickly, and this service usually works in time for the hearing. The problem was that crafty tenants would either forward their mail (although they still resided in the space) or kept the mail box filled with junk mail for at least 30 days prior to delivery of the complaint. In either circumstance, the United States Post Office would report to the Court that the regular mail had failed. It didn’t matter to the Post Office that the tenant was still residing there. It didn’t matter that the tenant removed the mail after 30 days; mail was no longer delivered to that address period. The Post Office would always return the Eviction Complaint to the Court stating that the regular mail had failed.
The Eviction magistrates were interpreting the eviction statutes to mean that the Post Office’s report that the regular mail had failed, meant that service on the tenant had failed, and the Landlord could not go forward with the hearing for possession. This was a real problem for Landlords because these hearings were designed to be heard quickly to help prevent further loss to the Landlord. Tenants who figured out this little glitch in the law either did it by accident, or if Landlord lore is correct, had done it by design.
In a decision earlier this year, the Ohio Tenth District Court ended this practice used by these crafty tenants (February 1, 2011, Showe Management Corporation v. Cunningham). The Court said in the Showe Decision that as long as the clerk of courts sent the complaint out by regular mail, service was complete upon its mailing, and it did not matter that the Post Office later reported that regular mail had failed. The Court reasoned that the Eviction Statute only required its mailing, and that due process had been served by the fact that the tenant received the notice of the eviction, first by the 3 day notice on their door, by bailiff service, and then by regular mail being sent. This decision permits the Landlord to proceed with the eviction hearing of possession.
Footnote: Even though the Showe Mangement decision allows the Landlord to proceed to obtain possession of the property, it does not permit the Landlord to obtain a money judgment against the tenant based on the service described above. In order to obtain a judgment for money damages under the other counts of the complaint, the Landlord must obtain service by the normal means required for a complaint, such as, certified mail service, personal service etc.