Mainebiz Real Estate Insider – Tips for Tenant Defaults & Terminations

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When a tenant defaults in payment of rent, or other terms of the tenancy, tempers flare. Landlords and tenants may make exaggerated allegations or rashly give notices via cell phone, text or email. As a commercial or residential landlord, positioning yourself to properly – and legally – terminate a tenancy is critical. Here are six considerations:

1. Read the lease carefully.

Does it say you must give a notice of default followed by a second notice of termination? Does the tenant have a right to cure the default? What are the cure periods? Many leases give a few days to cure a payment default, but 10-30 days to cure any other default (i.e., bad behavior, unauthorized pet or guest, non-payment of real estate taxes, utilities, etc.). Be sure you research and are aware of the exact parameters of the lease.

2. Rid yourself of ambiguity.

Once the relevant lease language has been identified, be clear in your explanation in the notice: “You are in default for the following section of the lease because X, Y, and Z. You have X days from your receipt of this notice to cure the default.” State whether the lease will automatically terminate if the default is not cured. Sometimes, strategically, landlords may not want to terminate the lease, but one should always be clear if the lease is to be terminated.

3. Deliver the notice in accordance with the lease terms.

If the lease states hand delivery and certified mail, be sure to do both and retain evidence sufficient to satisfy a judge. If notice is by first class mail, and the tenant has a 10-day cure period from receipt of the notice, allow three days for delivery of the mail. This may seem basic, but it is a primary reason defaulting tenants manage to prolong their stay. A proper notice does not have to be reissued and positions a landlord for a win in court. It may also provide ammunition to convince a bad tenant to leave in advance of any court process; an improperly given notice may result in the landlord going back to square one and re-sending notices.

4. Provide an adequate statutory notice.

Since not all tenants occupy pursuant to written leases, it is equally important to be sure to provide tenants-at-will with adequate statutory notice. Maine law requires notices for non-payment of rent to contain statutory language about the tenant’s right to contest the termination of the tenancy in court, and requires the notice to be delivered in-hand, if possible. Although this statute refers to residential tenancies, courts liberally apply the residential statutes to any tenancy-at-will, including commercial tenants.

5. Go on site.

Lease or no lease, residential or commercial tenancy, Maine law says a tenant may not unreasonably withhold access to the premises. Twenty-four hours’ notice of need for access at a reasonable time of day is sufficient (unless additional advance warning has been promised in a written lease) and an ideal way to check a property (and snap a cell phone photo) for a dirty ashtray in the non-smoking unit, an unauthorized pet, illegal or lease-violating use, etc. These visits cannot be repeated or harassing but are an effective way to manage and end a difficult tenancy.

6. Be mindful about communication.

Once the tenant is in default and notice has been provided in accordance with the tenancy, refrain from emailing and text messaging. These types of communications are rarely conducive to an amicable resolution. To the contrary, post-notice electronic communications provide fodder for tenant defenses and challenging trial material for lawyers and judges, and can sometimes be found to have withdrawn or modified earlier formal communications, such as default notices.

Topics:  Eviction, Landlords, Leases, Notice of Default, Notice Requirements, Tenants

Published In: General Business Updates, Commercial Real Estate Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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