Property Manager Survival Guide to Preparing Default Notices - Part 4

VI. Common Notice Pitfalls to Avoid When Providing Notice

A. Terminating a Periodic Tenancy: Attempting to Terminate Mid-Period
When terminating a periodic (e.g., month-to-month) tenancy, the date for termination must be at the end of the period. Washington Practice §88.6. In other words, a 20-day notice cannot be served on the 5th of the month which attempts to terminate the periodic monthly tenancy on the 25th of the month, when the 31st (or the 30th or 28th) is the end of the monthly period. Id.

B. Waiver Through Accepting Rent Under Certain Default Situations
1. Delinquent Rent Situations
Accepting a partial payment of rent after notice is given for delinquent rent does not necessarily waive the landlord’s right to pursue an unlawful detainer action based on the failure to pay rent. For example, if the landlord applies the money received to the earliest rent and there is still a balance of rent owed, then the acceptance of partial payment of rent does not operate as a waiver and the landlord can bring an unlawful detainer action for the remaining amount due. Housing Resources Group v. Price, 92 Wn. App. 394, 958 P.2d 327 (1998); Carraher v. Bell, 7 Wn. 81, 34 P.469 (1893). However, the prudent landlord will serve an amended notice reflecting the balance still owing ((There is at least one case that suggests that repeated acceptance of late rent may preclude the landlord from proceeding under the unlawful detainer action. Neitsch v. Tyrrell, 25 Wn.2d 303, 171 P.2d 241 (1946).)). See also MH2 Company v. Hwang, 104 Wn. App. 680, 684, 16 P.3d 1272, 1274 (2001).

2. Breach of a Condition or Covenant and Waste / Unlawful Business / Nuisance
If a landlord serves notice to the tenant for a lease breach, or for waste/unlawful business/nuisance, and then accepts payment of rent after having knowledge of that breach, the landlord may be deemed to have waived the breach relied upon in the notice. Signal Oil v. Stebick, 40 Wn.2d 599, 602-3, 245 P.2d 217, 219 (1952); Wilson, 31 Wn.2d at 640-41 (landlord deemed to have waived notice when landlord accepted rent after 10 day notice to cure had expired with knowledge that there was no compliance). However, the landlord does not waive his rights to pursue future or continuing breaches. Wilson, 31 Wn.2d at 641.

3. Expiration of a Lease for a Fixed Term
A tenancy terminates upon the expiration of a lease for a fixed term. Any rent that is accepted after the fixed term tenancy expires results in the creation of a new periodic tenancy. Lowman v. Russell, 133 Wn. 10, 11-12, 233 P. 9, 9-10 (1925).

4. Disclaim Acceptance of Rent as Waiver
A lease provision that provides that acceptance of rent does not waive breaches of the lease is enforceable. Hutchinson v. VanNostern, 99 Wn. 549, 170 P. 121 (1918). If the lease contains such provision, the landlord should insert an additional disclaimer clearly in the notice. For example, the provision might state, “Landlord’s acceptance of partial payment from you after service of this notice will not postpone or stop any eviction for your failure to pay full rent when due. Any partial payment received will be applied to rent first accrued and shall not be deemed a waiver of the landlord’s right to receive timely payment of full rent or to commence an unlawful detainer action against you for failure to pay full rent or for a non-rent breach of the lease.”

C. Misstating the Amount of Rent Due
Misstating the amount of rent as an amount lower than actually is due does not render the notice defective. Peck, supra, 31 WASH.L.REV., at 60. However, if the tenant tenders the misstated amount, then the tenant complies with the notice and can avoid forfeiture. Id.

Misstating the amount of rent due as higher than is actually due may render the notice defective, especially if the tenant is prejudiced. Id. at 61. A tenant that does not pay the amount of rent demanded because of a good faith belief that the amount is inaccurately high may be able to argue the notice is defective. Id. However, if the amount is correct, then the tenant’s good faith belief is likely immaterial. Id.

D. Failing to Serve All Parties Entitled to Notice
In addition to those persons entitled to notice under RCW 59.12.010 et seq. (e.g., tenant, subtenant, or person in possession of the premises) service on other persons may be required by the lease or by the business dealings of the parties. Therefore, a landlord must examine the lease and any other agreements affecting the tenancy to determine what additional parties are entitled to notice and how they are required to be served. Other parties commonly entitled to service of the unlawful detainer notice are guarantors, co-signors, guardians, trustees, corporate affiliates, registered agents, attorneys, and others who have gained “tenancy” rights.

E. Failing to Examine the Lease Agreement for Additional Time to Cure
Tenants are entitled to the greater notice cure period afforded by statute or the lease. Lease provisions that provide for greater notice periods/requirements than set forth in RCW 59.12.030 will be binding on the landlord. Gray v. Gregory, 36 Wn.2d 416, 418, 218 P.2d 307, 308 (1950). For example, if the landlord’s lease provision provides for 20 days notice to cure a lease breach, then the landlord’s notice cannot provide only the statutory minimum of 10 days notice to cure the breach. See Id.; Community Investments, Ltd. v. Safeway Stores, Inc., 36 Wn. App. 34, 35-7, 671 P.2d 289, 290-1 (1983).

Lease provisions that provide less protection than the statutory notice requirements are unenforceable. Peck, supra, 31 WASH.L.REV., at 65; see also Gray, 36 Wn.2d at 418, Jeffries v. Spencer, 86 Wn 133, 149 P. 651 (1915). For example, a lease provision will not be valid if it states the tenant has 5 days to cure a non-rent lease breach.

Some leases are unclear if the notice cure period has been lengthened, such as where a lease states the tenant is not considered in default of rent until rent is unpaid for 10 days. See First Union Management v. Slack, 36 Wn. App. 849, 859, 679 P.2d 936, 941 (1984). The court in Slack provided helpful guidance in such a situation:

The provision in question reads: “In the event of any failure to pay any rent within ten days after it shall become due hereunder… then the Landlord may… terminate this Lease or terminate Tenant’s right to possession of the Leased Premises …” This clause is not ambiguous. It does not deal with the notice required in an unlawful detainer action. It only states the landlord may not exercise its rights thereunder unless the tenant has failed to pay rent within 10 days of the date it is due. … Hence, the provision does not apply [to lengthen the statutory notice period.]

36 Wn. App. at 859.

In other words, the landlord waits 10 days after rent was due before the tenant is in default; thereafter, the landlord could serve the notice any day after the tenant is in default and give the tenant the statutory 3 days to pay the rent or quit the premises.

F. Mischaracterizing Other Amounts Due from the Tenant as Rent
Other amounts that may be due from the tenant include fees and charges for things such as common area maintenance, insurance, utilities, advertising, etc. If the other amounts are characterized as “additional rent” in the lease, then the landlord may include them in a notice for delinquent rent.

However, it is less clear whether these amounts may be included in a delinquent rent notice when the other amounts are not characterized as “additional rent” in the lease. If the tenant has failed to pay rent and the other charges are also delinquent in a small amount relative to the delinquent rent, then a 3-day notice for the total amount owed likely will withstand any tenant challenge in court. However, if the amount of other charges are delinquent in a large amount compared to the delinquent rent, then the tenant will likely have a right to the 10 days notice allowed for breaches of a condition or covenant of the lease agreement. The sufficiency of the landlord’s notice may rest on how the court perceives the notice prejudicing the tenant, if at all.

Generally, a notice for delinquent rent that includes a demand for payment of “other amounts” not characterized under the lease as “additional rent” is not wholly defective. See Sowers, 49 Wn.2d at 895. Rather, the court will likely maintain the action as to the unpaid rent.