Month to Month Balances

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Q: We have a guesthouse in the back of our home. The place has been there forever. Anyway, after the kids went off to college, we started renting it out. The current tenant signed a lease to pay rent plus their prorated portion of the monthly utilities. We didn’t get a payment this month. I am getting ready to serve a default notice, but I want to make sure I do it correctly. He owes rent and the utilities. Not sure if I can include both on the same notice. How can I recover the utility portion? Also, what if the resident pays the rent, but fails to pay the utilities? The utilities aren’t much, should I just let him run an outstanding balance and either deduct it from his deposit when he leaves or maybe ask for it when it gets a bit higher?

A:
First, the outstanding utilities should be paid timely and can be demanded through the service of a Three-Day Notice to Perform or Quit for Breach of Covenant. This notice should be served concurrently with your Three-Day Notice to Pay Rent or Quit. The Notice to Perform would inform the resident of his default in payment of the utility charges, and would require that the tenant perform by paying the outstanding utility charges within three days. It’s never a good business practice to carry balances over from one month to the next. When the time comes for you to take action, your prior conduct of accepting late payments without objection could result in the court finding that you “waived” your right to receive payment on time. Such a “waiver” of your rights and remedies may prevent you from enforcing your late fee provision or demanding payments on time. As such, even though the utility payment may be small when compared to the rent, it is still an obligation under the lease, and it should be enforced like any other provision.


This article is presented in a general nature to address typical landlord tenant legal issues. Specific inquiries regarding a particular situation should be addressed to your attorney. Stephen C. Duringer is the founder of The Duringer Law Group, PLC, one of the largest and most experienced landlord tenant law firms in the country. The firm has successfully handled over 255,000 landlord tenant matters throughout California, and has collected over $155,000,000.00 in debt since 1988. The firm may be reached at 714-279-1100 or 800-829-6994. Please visit www.DuringerLaw.com for more information.

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