I’M BEHIND IN MY RENT!
WHAT’S NEXT?

As the title character, Harold Hill, in the Broadway musical, “The Music Man” observes, “Trouble! Right here in River City!”  Substitute the name of your hamlet for River City and the message should be clear.

In most states, a three day notice to pay rent or quit must be served upon the tenant before the landlord can commence an action for unlawful detainer to recover possession of the property.  Such a notice can also require the tenant to cure other defaults such as an unauthorized assignment or sublease of the property, use of the premises for an unlawful purpose, or commission of a nuisance.

Assuming your default is limited to the failure to pay rent, you have the following options:

·                   Pay the rent.

If you can find the money, pay the rent due before the expiration of the three day notice.  If you anticipate repetitive difficulty in paying rent, beg or borrow the money to buy time to sell your business.

·                   Do nothing.

A dangerous option.  If, however, your attorney concludes that the notice or service is defective, and defenses can therefore be raised in forthcoming unlawful detainer action, you can consider waiting for the summons and complaint and hope that the attorney’s advice was correct.

·                   Negotiate with the landlord.

Many landlords would prefer to receive partial payments under some type of payment plan rather than dealing with vacant space.  Never fear to negotiate.

·                   Vacate the premises.

If you have no hope of securing money to pay the rent, vacating the premises reduces the amount of any judgment that the landlord might obtain against you.

What constitutes the requisite period of three days? Most jurisdictions provide that if the last day falls on a Saturday, Sunday or holiday, the next business day counts as the third day.

Can a three day notice include late charges?  Unlawful detainer statutes in most jurisdictions refer to the default in the payment of rent and make no mention of charges other than rent.  Thus, it might be argued that a notice is ineffective if it includes amounts other than rent.  Beware, however, of the lease which contains the provision “Rent Defined.  All monetary obligations of lessee to lessor under the terms of this Lease are deemed to be rent.”

What if the landlord’s statement of rent in the three day notice is slightly in error?  At one time, such a defect could be fatal; however, most jurisdictions, including California, presently provide that if the amount claimed in the notice is clearly identified as an estimate, the defect is not fatal.  In California, the applicable statute provides that if “it is determined upon the trial . . . that rent was owing, and the amount claimed in the noticed was reasonably estimated, the tenant shall be subject to judgment for possession in the actual amount of rent and other sums found to be due.”

If you have withheld payment of rent because the landlord hasn’t paved the parking lot or has failed to perform some other obligation under the lease, you are traveling through dangerous waters.  Most courts hold, in commercial tenancies, that a defendant may not defend an action based on nonpayment of rent with the claim that the landlord breached his agreement to repair.  The obligations are considered to be “independent” requiring separate actions.

Unlawful detainer actions are entitled to trial priority in court and thus are heard relatively quickly.  In California, a tenant has five days to respond to an unlawful detainer complaint after service and a trial is set within twenty days after the court is advised that the tenant has filed an answer to the complaint.  In view of the speed with which an unlawful detainer action proceeds to trial, if a tenant has grievances against the landlord, the best course is to pay the rent to avoid the unlawful detainer action and then file a complaint against the landlord.

Can you file a complaint against the landlord in an unlawful detainer action (as a cross-complaint) so as to expedite a hearing about your grievances?  In most, if not all, states, the answer is no.  Cross-complaints by a defendant in an unlawful detainer action are not permitted.

The moral of the story?  Equipment off-location has minimal value!  Give the payment of rent high priority or, if your economic future is bleak, seek the advice of a good lawyer before the process server knocks on your door!

[This column is intended to provide general information only  and
is  not intended to provide specific legal advice; if you have  a
specific  question  regarding the  law,  you  should  contact  an
attorney  of your choice.  Suggestions for topics to be discussed
in this column are welcome.]


Reprinted from The Journal
Myles M. Mattenson © 2007