As always, before reading my blog post please review my disclaimer by following the link above or by clicking on this link. As always, any legal principles discussed apply only to the Commonwealth of Virginia.
[UPDATE: Some information in this blog post is no longer accurate due to changes in the law. Please see my blog post on changes in the law for 2019 for more information.]
Introduction
I have repeatedly covered on this blog the concept of "self-help" in landlord/tenant law. Self-help is when a landlord or tenant takes matters into their own hands, without the court, and for a tenant typically includes withholding rent. In residential leases, self-help is strictly forbidden by law. Today, however, I want to touch on a different but related topic - delayed rent.
Say you are a tenant and you've had a financial issue arise. You know you will have the money to pay your rent in a few weeks, but you don't have it right now. What should you do? Well, recommendation one is to talk to the landlord and see if he will agree to accept a delayed payment (if he does, get that agreement in writing). If that doesn't work, recommendation two is to try to scrape the money together to pay. If that doesn't work, recommendation three is to prepare to utilize a little known feature of Virginia landlord/tenant law called the "redemption tender" or "redemption payment." I will get into the risks and drawbacks of this approach later in this post - there's a reason it is my third recommendation, not my first - but executed properly, this process can buy you about a month to get a late rent payment in without facing eviction.
In today's blog post, I will discuss the way "redemption tenders/payments" work, how to execute them, and their risks and drawbacks.
VRLTA vs. Non-VRLTA Leases
Any long-time reader of my blog knows that the first question you need to ask when dealing with landlord/tenant matters is which landlord/tenant law applies to your lease. The basic breakdown of figuring that out can be found here. Once you figure out which law applies, the next question is to ask what the difference between the two laws may be. In this case, the law is largely the same. "Redemption tenders/payments" for non-VRLTA leases are governed by Virginia Code Section 55-243 and for VRLTA leases they are governed by Virginia Code Section 55-248.34:1. The relevant provisions of the two code sections are identical, so for most purposes this post applies equally to both kinds of leases. Note, however, that the non-VRLTA provision does not have a non-waiver rule, meaning that a lease could probably waive your right to use this procedure. I will say, however, that to date I have never seen a lease that waives the right to a "redemption tender/payment."
So What Is a Redemption Tender/Payment?
"Redemption tenders" and "redemption payments" are two processes that, if completed properly, will cause an unlawful detainer action (a civil case for eviction) to be dismissed entirely (thus "redeeming" your right to live on the property) if the reason for the unlawful detainer is non-payment of rent. In other words, to take advantage of this provision of law, you will have had to not pay your rent, been served with a pay or quit notice, not paid in accordance with that notice, and had an unlawful detainer action filed against you.
A "redemption tender" is a fairly limited option primarily available to those with lower incomes. A redemption tender is a letter signed by a governmental entity or a non-profit charity promising payment in full of the amount due to the landlord - including rent, late fees, other charges, reasonable attorneys' fees, and court costs - within 10 days after the first return day on the unlawful detainer. If presented to the court at the return day, the return day will be continued for 10 days. If the payment is made to the landlord before that time is up, the unlawful detainer is dismissed and your lease is resumed. If it is not, possession is granted to the landlord immediately, without a trial.
A "redemption payment" occurs when at your court date (specifically, the first return) you pay the landlord, the court, or the landlord's attorney the full amount due to the landlord - including rent, late fees, other charges, reasonable attorneys' fees, and court costs. If you do this, the unlawful detainer will be dismissed, and your lease is resumed.
Limitations
There are some limitations on this option. For example, this option is only available for residential leases, not commercial leases (unless provided for in the lease). Additionally, a "redemption payment" can only be done once in any given 12 month period. Finally, if you dispute the amount owed to the landlord, then a redemption is not available to you as the court is unlikely to be willing (and in the case of a redemption tender, is not allowed) to hear an argument on this for the purpose of a redemption.
Risks and Drawbacks
So, the risks and drawbacks of the "redemption" approach should be very clear. The risk is mainly that you will not handle it properly - that you will underpay, still get evicted, and now be out the money that you paid. If you have done one before, you may forget when your last "redemption payment" was and try to do it a second time in 12 months, getting evicted in the process. The final risk, if you have a non-VRLTA lease, is that you may have missed a lease provision waiving your right to a redemption, in which case you will be out of luck. I would also note that as this is a very rarely used provision of law, you also risk appearing in front of a judge who does not understand it (and has never seen it before) and may not apply it properly.
This approach also has drawbacks. First and foremost, it is much more expensive than paying your rent on time or having an agreed delay. You will have to pay not only the rent, but the court costs and attorneys' fees of your landlord and any late charges included in your lease. You also lose your ability to contest the amount you owe - if you disagree with what your landlord claims you owe, you either have to go to trial (and risk eviction) or suck it up and pay what your landlord claims. Finally, you create a public record (since a lawsuit has been filed) of your non-payment of rent that future potential landlords may discover.
For these reasons, I consider redemption to be a last resort option.
Conclusion
"Redemption tenders" and "redemption payments" are last resort options for tenants who simply cannot pay their rent on time for a month but know they will have the money later. If you are considering making a redemption payment or have a tenant who is attempting to do so, you may want to consult with an attorney to make sure it is being done right. You can contact me by calling (703)281-0134 or e-mailing me at SLeven@thebaldwinlawfirm.com to set up an initial consultation. Our initial consultations are free for up to half an hour!
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