Applying Rent Payment to Arrears or Specified Month

Q If a tenant denotes a specific month to which to apply his rent payment, is the owner still allowed to apply the rent payment to the arrears and not to the specific month noted on the tenant's check?

Q If a tenant denotes a specific month to which to apply his rent payment, is the owner still allowed to apply the rent payment to the arrears and not to the specific month noted on the tenant's check?

A Generally, a payment of rent designated or earmarked for a specific month must be applied to that month unless there is a prior agreement, such as language in a lease or a stipulation, that would allow the owner to apply it differently, says attorney Alan Kucker of the Manhattan law firm of Kucker & Bruh, LLP.

In one case, a tenant sought relief from a stipulation she entered into in a nonpayment proceeding. She submitted copies of her checks indicating that they satisfied the rent for months the owner claimed in the petition was in arrears. Apparently, the owner applied these checks for rents owed for previous months. The appellate court ruled that the owner was not entitled to apply the tenant's earmarked checks as it saw fit, but was required to apply them toward rent for the months that the tenant indicated on the checks [Kew Realty Co. v. Charles, June 1998].

This case gave some credibility to a tenant's records of rent owed instead of an owner's records, which might indicate unpaid rent from other months. For example, if an owner claims in court that a payment was for the earliest month in dispute, a different month noted on the tenant's canceled check offers credible evidence that the payment was intended for a more recent month. Therefore, if the tenant's check has a specific month written on it—for example, “March 2009 rent,” the owner cannot record the payment in its own records as payment for any other month except March 2009. It cannot be applied, for example, to the January 2009 rent when rent is still owed for January 2009.

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