Accepting Rental Payments Following a Breach by Commercial Tenant
by Brian Free
Accepting rental payments after a lease default is risky, and may lead to a waiver of the landlord’s right to terminate the lease. The terms of a landlord’s lease may protect against such a waiver, especially if the lease’s “non-waiver” provisions confirm that the landlord retains the right of lease forfeiture even after the acceptance of rent. If rent (or partial rent) is accepted after a payment default, it should be applied to the older amounts due, with a confirmation that recent defaults are not waived.
In any event, if a landlord has started an unlawful detainer lawsuit to terminate a commercial lease, it should work with its attorney to balance the benefits of accepting payment with the potential risks that the landlord may waive its legal rights.