The Texas Supreme Court recently decided that a landlord still maintains the right to evict a tenant even if that tenant paid rent late on multiple occasions without consequences. The state’s top court reversed decisions in the case tried at the justice court, county court, and court of appeals.
The tenant had argued that the landlord waived the right to evict since the landlord never assessed late fees or protested the late payment of rent, and the lower courts agreed. However, the Supreme Court disagreed, stating that “… as a matter of law, accepting late rental payments does not waive the nonwaiver provision in the underlying lease … .”
The court noted that the lease required payment of rent “on time, in full, and without demand.” The lease also stated that payment of rent more than 10 days late constituted a default and that any waivers must be in writing and signed by the party waiving a provision of the lease. The court did not agree with the plaintiff’s assertion that the landlord’s willingness to accept late rent showed clear intent to waive other rights provided in the lease.
For commercial transactions bound by the Texas Association of REALTORS® Commercial Lease (TAR 2101), the pertinent section of the contract is Paragraph 36F: “Waiver: Landlord’s delay, waiver, or non-enforcement of acceleration, contractual or statutory lien, rental due date, or any other right will not be deemed a waiver of any other or subsequent breach by Tenant or any other term in this lease.”
Although most commercial leases contain a nonwaiver provision, landlords may not want to rely solely on that provision. Landlords who want to make clear that they are retaining their rights to all other terms of the lease may want to reject late rental payments, accept them with a written acknowledgment that the rent was accepted “under protest,” or enforce the provision in the lease that allows landlords to assess late charges.