Don’t Get Tripped Up by Improper Eviction

Nonpayment of rent is the most common breach of a tenant’s lease—and can be a major signal that trouble is on the horizon. That trouble could come in many forms: A tenant becomes bankrupt or has financial issues, it withholds its rent because of a perceived problem that you’ll have to hash out, or it has found a better space and is preparing to move out despite its lease.

If you think that the tenant’s missed or partial rent payment means that it’s on the verge of a default—regardless of the reason—you’ll have to tread lightly when taking measures to evict it. Handling an eviction poorly may create a contentious situation for you and your property manager, or even result in a lawsuit for wrongful eviction. At the same time, you need to make sure the tenant continues to stick to its lease obligations, or you’ll be left on the hook for its shortcomings. But you can enforce the lease of a tenant on the verge of eviction by doing the following:

Affirm lease. Affirming the lease is a good first move. That’s because, regardless of how important your tenant is to the building or center, you should worry about yourself first. Quickly deal with the issue to prevent the tenant from inadvertently modifying the terms of the lease. For example, if you allow the tenant to pay late every month or accept partial rent payments, it could argue that the lease has been modified by an oral agreement. Prevent this by immediately meeting with the tenant to affirm the terms of its lease as soon as it makes a late or partial payment. Your affirmation notice should make it clear that rent will continue to be due on the day of the month specified in the lease, but that you are accepting the late or partial rent payment as a one-time consideration.

Stick to lease terms, local law. If your struggling tenant goes dark, it may become contentious. Protect yourself by enforcing all of the tenant’s lease terms during the eviction process and following eviction requirements in your jurisdiction—and document every transaction. Require your tenant to sign for hand-delivered notification with a proof of service form. And you should always comply with legal requirements and consult with your attorney about anything that’s causing confusion. Protect yourself with written documentation, because a tenant can always turn around and say that it was unfairly evicted from the premises—and local laws may be on its side.

For more details about protecting your interests when dealing with a defaulting tenant and model language that you can use, see “Follow Two-Step Lease Enforcement Plan for Imminent Eviction,” available for subscribers here.