Your commercial tenant failed to pay rent. You have heard that things are not going well for them, but now it is apparent. As a property manager, you must resolve the issue quickly. When the tenant fails to pay by the due date, they have effectively breached the lease, and you are entitled to evict the tenant from the property. An eviction lawsuit, an Unlawful Detainer action, is a fairly straightforward legal process.
Property managers must know that the steps involved in this process are critical and must be followed to the letter of the law. A real estate attorney representing both parties in the action is common. If your property manager has followed the law, given proper notice, and has a detailed file of all correspondence between the tenant and their company, the unlawful detainer action should go fairly smoothly, and the landlord or owner should prevail.
The First Step Is To Resolve Rent Payment Issue If Possible
If possible, the property manager should get the tenant to pay rent and bring their lease current. If this involves waiting a few extra days for payment, maybe this would be the best action instead of filing a lawsuit. Your company policies and best practices will dictate this action, but it would be better for all parties to resolve before litigation.
Three-Day Notice Drafted
If payment is not forthcoming, a ‘three-day notice to pay or quit’ must be prepared and properly served on the tenant. This notice must be in a specific legal format. A commercial owner, landlord, or property manager can choose between different types of 3-day notices: 1) specifies the precise amount of rent owed, or 2) estimates the amount of rent owed – usually when a tenant is paying percentage rent.
If the lease requires the tenant to pay rent and other separate amounts for triple net or CAM charges, the property manager should get the proper advice on whether or not two separate and distinct notices must be served. For example, suppose the property manager or landlord accepts an overpayment of the rent because they have miscalculated and the tenant overpaid estimated rents and CAM charges. In that case, this may lead to a tenant victory in the unlawful detainer action. This would also possibly give the tenant the right to attorney’s fees. It is critical to correct this step.
The 3-Day Notice Must Be Properly and Legally Served.
The tenant is deemed served when they are personally served with the three-day notice or a responsible person at the place of business is personally served on the premises. If no one is available, the landlord or property manager can attach the notice to the front entry door of the business premises while simultaneously sending a copy of the three-day notice by certified mail return receipt requested. The landlord or property manager must then prepare a ‘proof of service’ in the proper format, which states in pertinent part that the ‘three-day notice’ was served on the tenant or describes the service method.
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The Property Manager or Landlord requires a three-day waiting period for the Service to be Effective. After properly serving the three-day notice, the waiting period begins on the next business day. If the third day falls on a weekend or holiday, the waiting period is extended to the next business day. If the tenant decides to pay all rent due at this point or corrects any outstanding violation of the lease terms, then the eviction process ceases.
If the tenant makes a partial payment, the landlord or property manager can accept partial payment but must notify the tenant that they are not waiving their rights to proceed with an eviction. The eviction process continues if the tenant violated the lease through some criminal act or conduct. At the end of the three-day waiting period, the landlord or property manager may file and serve a complaint and summons.
Summons and Complaint are Prepared and Served
If the tenant has failed to cure their outstanding rent violation or any other violation that they have been properly notified of, the landlord or property manager may proceed with filing and serving the summons and complaint on the tenant—a third party is not involved with the action.
Typically, a registered process server can be hired for a fee to serve the papers to the tenant. The summons, complaint, and proof of service must then be filed with the court clerk’s office with a copy of the lease, and then the property must serve a three-day notice and its proof of service.
Technical Mistakes Can Cause Delays
If the landlord or property manager has taken on this process alone, they may have made a technical error in processing, preparing, serving, and filing these documents. Several technical areas of the law must be followed, or substantial delays will result if they are not.
A tenant who hires an attorney will likely find these technical errors if the court doesn’t see the mistakes. This will likely result in delays, which means money to the property owner. In these situations, the best action is to hire an eviction attorney to help prevent delays and additional costs for the owner.
