F. The Doctrine of Waiver

Even though your rental agreement says something in clear language, if you can prove that after the rental agreement was signed, the parties acted in a way that was different than the express terms of the rental agreement, then there may be an issue of waiver. This is because of our old friend the implied contract. One most commonly sees this in the context of late fees.

For example, your rental agreement might say that the rent must be paid by the end of the first day of each month, and that failure to pay the rent by the first day of each month will give the landlord the right to start eviction proceedings. On the first month, the landlord accepts the rent four days late. On the second month the landlord accepts the rent eight days late. The third month, the rent is paid on time, but then on the fourth month, the rent is five days late. This course of conduct continues on for several months. On the eighth month, the rent is two days late, and the landlord starts eviction proceedings.

The tenant will be able to come into court at the eviction hearing and argue that the landlord has no right to evict him for paying the rent late. The landlord will hop up and down and read the language of the rental agreement giving him that very right over and over again to the Judge until the landlord is blue in the face. But the Judge will look at the landlord’s actions and find that there was a course of conduct established between the parties that led the tenant to rely upon it. The landlord’s actions in constantly failing to insist on strict enforcement of the rental agreement’s terms lulled the tenant into a false sense of security in making payments a few days late. Thus the landlord will not have the right to strict enforcement of the rental agreement’s terms in this regard.

In the case of Lauch v. Moning (1968) 15 Ohio App. 2d 112, the First Appellate District Court held as follows:

Summarizing defendant’s assignments of error defendant claims that a course of dealing in accepting overdue rent had been established between the parties whereby the plaintiff had waived any right to claim forfeiture for late payment of
the rent installments without giving the defendant advance notice of his intention to require strict compliance with the terms of the lease. That is the well settled law of Ohio. See Bates & Springer, Inc., v. Nay, 91 Ohio Law Abs. 425, and Milbourn
v. Aska, 81 Ohio App. 79, and authorities in each case cited. The undisputed evidence here establishes that the defendant was entitled to the protection of this rule of law. Id. at 113

How many months does it take to sufficiently establish this course of conduct? That’s a crap-shoot. I can’t guarantee that any period of time will be sufficient. I can only say that the longer the better, and it’s better to try this argument and fail than to not ever try it at all.

1. Two Ways To Defeat Waiver

a. Letter of Strict Compliance

The landlord can defeat the effects of waiver in two ways. Firstly, she can send a letter of strict compliance. In the letter, she will say something like: “Dear tenant, I know that in the past, I have accepted the rent late. Those days are now over, and in the future, I will insist upon prompt payments of all rental amounts as soon as they are due, and if they are late, I will exercise all of my rights under the lease.” This puts the tenant on notice that the past course of conduct will no longer be the rule. Once the tenant receives this letter, no Judge is going to allow the tenant to assert the waiver argument on the next late payment.

b. Anti-Waiver Clauses in Rental Agreement

Landlords also insert anti-waiver clauses in their rental agreements. These clauses say something like: “No course of conduct between the parties shall be relied upon if it is in conflict with the provisions of this rental agreement. No course of conduct on the part of either party shall be deemed a waiver by the other of any term or condition of this lease.”

The problem with these clauses is that they are a restriction upon an individual’s freedom to contract. Remember that there are two types of contracts, express contracts (by words, whether written or oral) and implied contracts (by deeds of the parties). The landlord’s consistent waiver of an express term of the rental agreement can be seen by the Court as an
implied contract.

Whether the Court will enforce the anti-waiver provision is dependent upon certain factors. One Ohio Court has addressed the enforceability of anti-waiver provisions, but not in the context of landlord tenant law. However, the wording below is a strong argument against anti-waiver clauses in landlord/tenant law by analogy. The Seventh District Court of Appeals in
Belmont County stated in the case of Van Dyne v. Fidelity-Phenix Ins. Co. (1969), 17 Ohio App. 2d 116, as follows:

An insurance company cannot, by a nonwaiver provision in its policy, disable itself from subsequently modifying its own contract, or prevent its future conduct from having the force and effect which the law says it shall have. Attempts of parties,
including insurers, to tie up by contract their freedom of dealing with each other are futile, and such a nonwaiver provision does not prohibit or limit the company issuing the policy, or its duly authorized agent, from subsequently entering into a
valid oral agreement with its insured, modifying the policy’s terms. Coletta v. Ohio Casualty Ins. Co. (Court of Appeals, Summit County, 1953), 96 Ohio App. 70 (see paragraphs two and three of the syllabus, and pages 77, 79, 80, 81 in the opinion); Union Mutual Life Ins. Co. v. McMillen, 24 Ohio St. 67; 30 Ohio Jurisprudence 2d 703, 704, Sections 765, 766. Id. at 123-124.

If an insurance company cannot preclude a waiver of its contract by its actions that follow the contract in time, why should a landlord be able to do so? Also, the language above, which says “attempts of parties, including insurers” speaks to parties to contracts in general as well as insurers in particular, and so further indicates that the rule applies to all.