Legal Corner
 

Landlord’s Remedies Upon Tenant’s Default
By Mike Garner and  Aneelah Afzali
Stokes Lawrence, P.S.

Landlords sometimes wonder how to handle a tenant is in default. The uncertainty results from a misunderstanding of the law and procedures relating to tenant defaults and evictions, and also from rumors regarding the difficulties of obtaining and enforcing a judgment against tenants.

The prospect of a defaulting tenant must be considered when the lease is negotiated. Tenants may suggest that all disputes be arbitrated, as arbitration can be quicker and less expensive than a trial or hearing, but equally predictable. As simplistic and appealing as this may sound, one dispute should never be referred to arbitration. The landlord should preserve and protect its right to pursue an unlawful detainer action against a tenant who is in default.

An unlawful detainer action is the formalistic way of saying "eviction." In an unlawful detainer proceeding, the court will quickly order the tenant to pay rent or vacate the premises. If the tenant fails to do either, the sheriff can be enlisted to evict the tenant. And the landlord retains its right to pursue the tenant for all damages caused by the default.

When a tenant defaults, the landlord must notify the tenant of the default and afford it an opportunity to cure the default. State law requires at least a three day cure period, but a longer cure period set forth in the lease will prevail. So, if the lease requires a tenant be given five days’ notice, it must receive five days’ notice. The notice should be sent to the tenant, both by first class and return receipt requested mail, and should also be posted on the premises.

If the tenant does not cure the default within the applicable cure period, the landlord can start an unlawful detainer action. A complaint is filed in the superior court of the county in which the property is located, claiming that the tenant has failed to pay rent. On the day the complaint is filed, the court will issue an order requiring the tenant to appear at a court hearing six to twelve days after the tenant is served with the complaint and order unless the default is cured by then. This is a very quick "return date" as most civil actions will not have an initial court appearance for at least a month.

Service of the complaint, order and supporting papers must be timely made or the court hearing may be postponed. But once service is made and the hearing date confirmed, the landlord and its attorney will appear in court on the hearing date and submit a declaration of the landlord or its property manager that the tenant is a tenant at the property under the lease (a copy of which should be attached to the declaration), the tenant is in default, and the amount of rent, attorneys fees and court costs then due and owing. Almost all leases permit the landlord to recover its legal fees and court costs incurred pursuing a defaulting tenant.

These materials are typically presented to a court commissioner who will sign an order declaring the tenant to be in default and ordering it to either pay the rent or vacate the premises within a specified number of days. If the tenant appears at the hearing and contests the amount owing, the court usually requires the tenant to pay the disputed rent into the registry of the court and then sets a trial date within 60 days. The rent is paid to the court to show the tenant has a bona fide dispute and is not fabricating one because it does not have the money to pay the rent.

If the tenant does not appear at the hearing, the landlord or its attorney delivers the judgment and writ of restitution to the sheriff’s office after posting a bond of between $500 - 2000. Depending on the county, the sheriff may take up to two weeks to visit the tenant and collect the rent or set a date upon which it will evict the tenant from the premises. In almost all cases, the tenant will magically come up with the money and cure the default, or slip away into the night, often leaving some of its personal property on the premises.

In the disputed matters which go to trial, the only issue to be tried is whether the tenant has failed to pay rent. Typically leases say the rent shall be paid without offsets, even if the tenant claims the landlord has failed to perform any of its obligations. If the tenant wants to pursue a claim against the landlord, it can do so in a regular state court action but it will not have an expedited trial date. In Pierce and King Counties trials are now set more than a year in advance. However, this type of tenant’s claim is well suited to be resolved more quickly, less expensively and with a "predictable outcome" through the arbitration process.

In conclusion, the process is streamlined, "fast-tracked" and not particularly complicated. The law favors the landlord in commercial situations, particularly when the default is as clear and clean-cut as a tenant’s failure to pay rent. Under a residential lease, the tenant has much greater protection and the landlord has a more difficult road to collection or eviction. Do not let rumors deter you from pursuing your rights against defaulting tenants. Consult your attorney and be prepared to take immediate action.