A landlord may serve a demand for possession upon a tenant during the course of a lease for failure to pay rent and initiate eviction proceedings if not caught up on rent in 7 days. MCL 600.5714(1)(a). Likewise, a landlord can serve a 30-day demand for possession if he or she believes the tenant violated a lease term. If the lease has expired and the tenancy is month-to-month, the landlord may serve the tenant with a notice to quit demanding that the tenant surrender possession in a certain amount of time or else the landlord will file suit to recover possession. The length of period that the tenant has to quit depends upon which of the following circumstances apply:
- “[A]n estate at will or by sufferance may be terminated by either party by giving 1 month’s notice to the other party. If the rent reserved in a lease is payable at periods of less than 3 months, the time of notice is sufficient if it is equal to the interval between the times of payment. Notice is not void because it states a day for the termination of the tenancy that does not correspond to the conclusion or commencement of a rental period. The notice terminates the tenancy at the end of a period equal in length to the interval between times of payment.” MCL 554.134(1).
- “If a tenant neglects or refuses to pay rent on a lease at will or otherwise, the landlord may terminate the tenancy by giving the tenant a written 7-day notice to quit.” MCL 554.134(2).
- “A tenancy from year to year may be terminated by either party by a notice to quit, given at any time to the other party. The notice shall terminate the lease at the expiration of 1 year from the time of the service of the notice.” MCL 554.134(3).
- “If a tenant holds over after a lease is terminated pursuant to a clause in the lease providing for termination because the tenant, a member of the tenant’s household, or other person under the tenant’s control has manufactured, delivered, possessed with intent to deliver, or possessed a controlled substance on the leased premises, the landlord may terminate the tenancy by giving the tenant a written 24-hour notice to quit. This provision ONLY applies if a formal police report has been filed alleging that the person has unlawfully manufactured, delivered, possessed with intent to deliver, or possessed a controlled substance on the leased premises. MCL 554.134(4). “Controlled substance” means a substance or counterfeit substance classified under:
- Schedule 1 of the Public Health Code, which includes but is not limited to heroin, peyote, Ecstasy (MDMA) and fentanyl.
- Schedule 2 of the Public Health Code, which includes but is not limited to cocaine, opium, high potency morphine, oxycodone and methamphetamines.
- Schedule 3 of the Public Health Code, which includes but is not limited to low potency morphine, anabolic steroids and certain codeine mixtures.
The landlord cannot remove the tenant from the premises without a court order. If the tenant is still in possession of the premises after the time period in the notice to quit ends, then the landlord may file suit in district court to obtain a judgment of possession and, eventually, an order of eviction. Court proceedings take time and often, leading up to the conclusion, the tenant will continue to be in possession of the premises. While the landlord can and should be entitled to the rental money for the period of time the tenant is there, it can lead to murky legal territory to accept payments. Does the acceptance of rent cancel the demand for possession or notice to quit? Does the landlord have the right to refuse rent payments to move the eviction forward?
The appropriate answer to the question depends on the type of demand for possession or notice to quit served.
SEVEN-DAY NONPAYMENT OF RENT CASES
If the tenant during the course of a lease is served with a 7-day demand for possession, the landlord MUST accept full payment if tendered because the tenant has the right to cure. However, if the tenant tenders only a partial payment, the landlord may accept this payment and can still file a complaint for possession.
The district court is prohibited from terminating a tenancy after a 7-day demand for possession if the tenant paid the rent due directly to the landlord, into an escrow account, to a receiver, or otherwise pursuant to court order. MCL 600.5720(1)(g). A landlord likewise will not receive a judgment for possession or order of eviction if the tenant shows that he or she was able to pay the landlord in full but the payment was refused.
SEVEN-DAY AND THIRTY-DAY NOTICE TO QUIT CASES
In instances where the lease is expired and the landlord has served a notice to quit, the acceptance of rent payments becomes a more complicated issue. In Park Forest of Blackman v Smith, 112 Mich App 421; 316 NW2d 442 (1982), the Michigan Court of Appeals confronted the following facts:
“Defendant leased an apartment from plaintiff, Park Forest, beginning October 1, 1977. The one-year lease was not renewed, but defendant continued to reside in the apartment. In March, 1979, Park Forest served defendant with a notice to terminate the tenancy, and in May, 1979, Park Forest began summary eviction proceedings against defendant, MCL 600.5701 et seq.; MSA 27A.5701 et seq. After summary trial proceedings, the district court entered an order terminating the tenancy. On appeal, the circuit court affirmed the district court decision. From that decision, defendant appeals by leave granted.”
“Park Forest is a multi-family, low-income housing project built with funds provided by the Michigan State Housing Development Authority (MSHDA) which holds a mortgage on Park Forest and subsidizes the rent of Park Forest tenants. At the time of trial, defendant’s rental payment was $360 per month. Her portion of the payment was $113 per month with the balance paid by MSHDA. Further, defendant’s lease provided that rent was due on or before the first of the month. If the rent was not paid by the first, a $5 late fee was charged for administrative costs.”
“The defendant lived at Park Forest for 20 months before the summary proceedings were held. For 13 of those months defendant paid her rent after the 5th of the month, always including the $5 late fee. The payment records indicated that defendant’s rent was paid late on January 6, 1978, February 8, 1978, March 14, 1978, April 10, 1978, June 14, 1978, October 17, 1978, November 15, 1978, December 10, 1978, January 17, 1979, March 6, 1979 (for February), March 26, 1979, April 9, 1979, and May 8, 1979. These payments together with the late fee were always accepted.”
“On March 26, 1979, Park Forest served defendant with a notice to terminate the tenancy, demanding possession on or before April 28, 1979. The notice provided that the tenancy was being terminated because the defendant failed to pay her rent in a timely manner. On April 9, 1979, the defendant paid her rent for the entire month of April and did not vacate the premises.”
“On May 7, 1979, Park Forest began summary proceedings, demanding possession of the apartment. The case was scheduled to be heard on May 22, 1979. On May 8, 1979, the defendant paid the rent for the entire month of May. The defendant received notice of the proceedings on May 12, 1979. The summary proceedings were held on May 29, 1979.”
“The district court found that the defendant had repeatedly violated the lease by paying her rent late and, therefore, just cause existed for terminating the tenancy.” 112 Mich App at 423-424.
The tenant contended to the Michigan Court of Appeals that the landlord’s acceptance of rent for a period of time subsequent to the date possession was demanded in the notice to terminate the tenancy constituted either the waiver of the notice or the creation of a new tenancy. The Court of Appeals agreed and determined that the landlord can accept rent which covers the period up to the last day of the notice period indicated on the notice to quit, but acceptance of rent for any period of time after the last day of the notice period constitutes a waiver of the notice to quit.
“We find that the landlord waives the notice to terminate by accepting rental payments for a period of time subsequent to the date specified in the notice. By accepting rent, the landlord leads the tenant to believe that further proceedings regarding the termination of the tenancy are not forthcoming. This is especially true in the instant case where Park Forest accepted defendant’s rent for the month of May before the defendant received the notice of the summary proceedings. Defendant testified that because Park Forest accepted her rent payment for the month of May she believed that the matter was settled and her tenancy would not be terminated. We find that this was a reasonable expectation. It is inconsistent for a landlord to assert a termination of the lease and then, after the time specified in the notice has passed, accept rent for a further period of time when the tenant has not received notice that summary proceedings have been commenced. Therefore, Park Forest waived its notice demanding defendant to vacate the apartment on or before April 28, 1979. Since Park Forest waived its notice, it failed to comply with the provision of the statute requiring notice before commencement of summary proceedings, MCL 600.5714(1)(b)(iii); MSA 27A.5714(1)(b)(iii), and, thus, the district court did not have jurisdiction to hear the case.” 112 Mich App at 426.
The so-called Park Forest defense is still good law in Michigan nearly 40 years later and tenants will assert it to defeat an eviction action. If the district court accepts this affirmative defense, the result in most cases will be a dismissal of the case and the landlord will have to start over by reissuing the notice to quit and re-filing the lawsuit. Landlords need to be very careful when accepting payments during an eviction proceeding that it is only for the period preceding the expiration of the notice to quit. Best practice for landlords would be to NOT accept payments after the notice to quit period ended and simple seek to recover these amounts after the case has concluded by obtaining a money judgment.
THE BOTTOM LINE
Landlords do have an affirmative duty to accept full rent payments from a tenant during a lease period as they have an absolute right to cure any deficiencies. If the tenancy is month-to-month and the landlord has filed a notice to quit, then rent payments should be accepted cautiously. Likewise, a tenant who has made rental payments for periods after the notice to quit deadline has ended that were accepted by the landlord may have a complete defense to the eviction action. Whether or not rent payments should be made or accepted during this legal limbo is best discussed with a skilled lawyer.
If you are a landlord or tenant that has further questions or needs legal representation, then do not hesitate to contact the experienced attorneys at Kershaw, Vititoe & Jedinak PLC for assistance today.