Owner's Execution of New Model Lease Waived Right to Pursue Eviction

Facts: An owner sued to evict a resident. The complaint alleged that the resident violated the terms of the lease by engaging in a pattern of criminal and harassing behavior, and by failing to make rental payments on time. The complaint further claimed that despite receiving numerous warnings regarding his conduct, the resident refused to stop engaging in the behavior that violated the lease.

The owner and resident had executed a HUD model lease. The lease stated that it was covered by “the Section 202 Program for Housing Elderly and Handicapped Individuals in conjunction with the Section 8 Housing Assistance Payments Program.” And Paragraph 9 of the model lease provided: “Unless terminated or modified as provided herein, this Agreement shall be automatically renewed for successive terms of one month each at the aforesaid rental, subject to adjustment as herein provided.”

In this case, while the eviction case was pending, the owner and resident executed a new model lease for the same unit. This lease was effective from Oct. 1, 2013, through Sept. 30, 2014, and included an automatic renewal provision identical to that provided in the prior lease.

The owner provided affidavits of two of its property managers who stated they never intended to waive their eviction claim when they executed the new lease with the resident. The resident asked the trial court to dismiss the eviction complaint, arguing that the execution of the new model lease waived the owner’s eviction claim against him. The trial court agreed, and the owner appealed.

Ruling: An Ohio appeals court upheld the lower court’s ruling.

Reasoning: The owner argued that the execution of the new lease while the eviction case was pending didn’t constitute a waiver of the owner’s eviction claim, because HUD regulations mandated execution of the new lease between the owner and the resident.

The court didn’t find any legal authority to support the owner’s claim that the execution of the new model lease in 2013 was mandated for recertification purposes or otherwise. The owner had the option of creating an unsubsidized month-to-month holdover tenancy while the eviction case was pending in order to preserve his right to terminate the tenancy.

Moreover, even if the execution of a new lease was necessary, the owner could have included a reservation of rights as an addendum similar to the pet addendum attached to the resident’s lease. A reservation of rights expressly preserving the owner’s alleged right to restitution of the resident’s unit would have been consistent with its eviction action.

The court stated that although the owner asserted that HUD regulations bar owners from making changes to the model lease, a reservation of rights under these circumstances wouldn’t modify the terms of the lease; it would merely preserve the owner’s eviction claim. Nevertheless, instead of preserving its eviction claim, the court ruled that the owner took action that was inconsistent with the termination of the resident’s tenancy. Therefore, the owner’s act of executing a new model lease with the resident waived its right to pursue an eviction.

• Millenia Housing Management vs. Williams, March 2015