Lessons from Eviction Court: Dealing with Partial Payments

If you’ve read many of my articles on evictions, you know my mantra: Details Matter. A simple miscalculation can easily lead to an eviction case being dismissed, and I see it happen almost every time that I go to court. In eviction cases, sequencing is everything. Here’s the proper sequence in a non-payment of rent case:

tenant fails to pay → landlord gives notice → tenant fails to pay → notice expires → landlord files eviction

But what happens to our sequence when the tenant wants to make a partial payment?

Three Options for Partial Payments

In that scenario, the landlord has three options: (1) reject the payment and proceed with the eviction if full payment is not tendered before the notice expires; (2) accept the payment on the condition that the tenant signs a waiver that explicitly allows the landlord to proceed with the eviction if the tenant fails to pay the remaining balance; or (3) accept the payment, then issue a new notice for the balance.

The first option is the cleanest. It preserves the landlord’s ability to evict without question. However, you don’t get any money out of the deal. The second option is ideal, as it allows you to have some cake and eat it too: you get some money and retain the ability to evict without further notice if the balance isn’t paid. Of course, this option requires the tenant’s written consent, so it may not be an option. For cash-strapped landlords without a cooperating tenant, that leaves the third option.

 As usual, the key to using the third option is sequencing. The proper sequencing is as follows:

tenant fails to pay on time → landlord gives notice → tenant makes partial payment → landlord gives new notice → tenant fails to pay → notice expires → landlord files eviction

This seems simple enough on the surface. The problem usually lies in the proper sequencing of accepting the partial payment and issuing the new notice. Those of you who’ve attended my eviction conferences or taken my video training course know that there’s an extended discussion on when a payment has been “accepted” by the landlord, and that “acceptance” often depends on the circumstances surrounding the transaction. One rule is that depositing the funds always constitutes “acceptance”. The problem that sinks our evictions is that the sequencing often occurs like this:    

tenant makes partial payment → landlord gives new notice → landlord deposits the payment

In this sequence, because deposit = acceptance of the payment, the landlord has committed the cardinal sin of accepting a payment after giving the notice, which is specifically prohibited by KRS 383.675. When the tenant doesn’t make any further payment, the landlord files the eviction. The tenant then appears in court and states that a partial payment was made. When the court learns that the money was deposited after the notice was given, the case is dismissed, and the landlord is forced to begin the notice process anew.  

So, here’s the lesson: if you want to be safe, do not issue notices until after the tenant’s last payment has been deposited. This takes away any argument from the tenant that you have violated KRS 383.675 by accepting a payment after giving a notice of termination.

Those of you who want to be a little less cautious can make a copy of the payment that shows the date it was tendered. This would allow you to show the court that you gave the notice after the payment was given to you. This practice is still risky because the court could easily rule that you didn’t “accept” the payment until you deposited it. It also puts you in the tough position of arguing that you accepted the money as soon as it was handed to you, an argument that will sink you in other cases where the tenant drops off a payment that you do not wish to “accept”.

So, the general rule to remember is that details and sequencing are of the utmost importance in evictions. The specific rule is that you should only issue termination notices for non-payment of rent after the last payment has been deposited.