Accepting Late Rent Costs Owner Its Termination Right

For years, an owner accepted late rent payments from a tenant with several leases. But eventually, the owner sent the tenant a default notice for nonpayment. The tenant then gave the owner checks for the outstanding rent. Despite this, the owner informed the tenant that it was terminating the leases and sent the tenant an eviction notice. The owner later cashed the tenant's checks. The tenant argued that the leases weren't properly terminated.

An Ohio appeals court ruled that the owner had waived its right to terminate the leases. The court noted that a lease clause gave the owner a termination right if the rent was paid late. But the owner waived its right to enforce the clause by habitually accepting late rent payments from the tenant, the court said. Had the owner wanted to rely on the clause to terminate the leases, it should have given the tenant “advance notice of its intention to require strict compliance” with that clause, said the court [Colombo Enterprises, Inc. v. Convenient Food Mart, Inc.].