Can You Accept Rent After Declaring Lease Default?

As always with these posts, DISCUSS THIS WITH YOUR ATTORNEY! This is not legal advice.  Every situation is different.

So, can you accept rent after declaring a default? The general rule is: ‘”[R]eceipt of rents accruing after cause of forfeiture, without notice to the contrary, is a recognition of the continued existence of the lease, and a waiver of such forfeiture,”‘ see Welch v. Kiser, 668 So. 2d 9, 10 (Ala. Civ. App. 1994)

Despite the general rule, a recent case from the Alabama Court of Civil Appeals holds that, in the proper circumstances, a landlord can accept rent from a tenant after declaring a default, and will not jeopardize his rights to evict the tenant.

The “proper circumstances” involve making it absolutely clear to the tenant that landlord’s acceptance of the rent does not cure the default, and will not stop the eviction. In the particular case I am talking about here, the fact that the landlord sued the tenant, and then accepted rent,  was considered sufficient. This court decision related to a commercial lease, but I see no reason it should not be applicable to residential leases.  At one time, Alabama had “landlord/tenant law” that was the same for all leases. Then, in 2007, the Alabama Residential Landlord Tenant Act changed some of those things, and established some special rules for residential leases. Anything not mentioned in the Act, would still be resolved according to plain old-fashioned landlord/tenant laws.  I think this is one of those situations.

I am not advising you to accept rent after giving notice of termination of a lease.  I still think it is safest to refuse to accept rent, if it is offered. BUT, if a situation arises in which you’ve filed an eviction lawsuit, a tenant sends in a rent check and it accidentally gets deposited, then you might have a very good argument why your eviction lawsuit should be allowed to proceed.

The case is Dailey v. U.S. Micro Powders, Inc., originally filed in the Circuit Court of Franklin County. The Alabama Court of Civil Appeals decision was February 24, 2012, but it was not released for publication until September 17, 2012.  There is no Book and Page number assigned yet for the official reporter. If you, or your lawyer, want to read the complete decision, you can click HERE and read it on my website.