Crack Down on Chronic Litigants
Many tenants treat their landlords as banks where they can get interest-free loans. These are the tenants who chronically refuse to pay rent when due. They take advantage of the delays in the legal system to hold off paying the rent for as long as possible. Trying to get these tenants to pay rent on time costs owners time and aggravation.
Sometimes, these tenants are too smart for their own good. My office has had success pursuing “chronic litigant holdovers.” Courts are more likely to evict these tenants and award legal fees. This is especially true where the owner enters into a probationary stipulation where the tenant promises to pay rent on time. The probationary stipulation is an efficient and cost-effective way (compared to trial) to obtain a judgment of possession and warrant of eviction if the tenant doesn’t pay rent when due. The chronic litigant holdover is a potent weapon for owners to use against tenants who take advantage of owners and the court system.
Chronic delinquent tenants who have abused the court system and delayed by breaching stipulations and obtaining orders to show cause get used to the court always signing orders to show cause. They are surprised when a court refuses to sign one or denies it. Unlike the usual nonpayment case, there is generally no right to cure chronic rent delinquency.
I recommend that owners review their records for tenants who routinely pay late and pursue chronic litigant cases against their rent-stabilized and rent-controlled tenants. The tenant’s rent history should show if the tenant is chronically late paying rent. Even if an owner has not kept records of all the cases it has brought against a tenant, those cases can be found in the court’s computer system.
My rule of thumb is to commence a nonpayment proceeding on the second day of the second month that the tenant owes rent. For tenants who are chronically late, that will make it harder for them to use owners as interest-free banks and builds up a record for the chronic litigant holdover.
Recovering those apartments enables owners to obtain vacancy increases that: (1) increase the value of the building for a sale or refinance; (2) improve the building’s cash flow; and (3) increase the legal rent for the apartment so that it is closer to luxury decontrol. For fair market tenants, the chronic litigant is not usually a problem, because the owner does not renew the lease.