Written by: Joshua Marych What happens when a tenant fails to pay the full amount of rent on the agreed upon date of payment? In most cases, this would equate to a breach of the lease by the tenant. Typically, when this breach occurs it allows the landlord the option to exercise a written notice of termination to the tenant. Doing so would not waive the tenant’s breach and thus the landlord could rely on its remedies under the lease. But what occurs if the landlord deposits the tenant’s partial payment? A creditor, without bringing a new contract of bilateral settlement into being, can temporarily forfeit their right to exact full payment of periodic payments – for instance, for rent – by agreeing for a period to be satisfied with partial payment. That is, there can be an extension to time for payment without fresh consideration. We caution that there are legal ramifications that should be considered before accepting partial payment of rent from a tenant in default. If the landlord decides to withhold their option to terminate the lease and accepts less than the full amount of rent, their actions may constitute a waiver of the landlord’s right to terminate a lease for non-payment of rent. Moreover, the landlord may be prevented by promissory estoppel from enforcing that right. This can be invoked for past payments and/or future payments. For a tenant to argue that a landlord waived their right to terminate upon depositing partial payments of rent they must provide evidence of unequivocal and conscious intention to abandon one’s rights.1 In order for a tenant to argue promissory estoppel they must prove that there was an assurance by one party intended to affect its legal relationship with the other party, which the other party relied on.2 When a landlord decides to accept partial payment, they should consider the following to help ensure that they do not waive their rights contained within the lease or provide a tenant the ability to invoke promissory estoppel: Indicate in writing, that the landlord’s action to accept past partial payment has no bearing on their ability to use remedies contained within the lease; Clearly articulate in writing that the acceptance of partial payment will only occur on a temporary basis, and it is expected that payment of all outstanding arears be paid by a specific date. Never expressly abandon any rights contained within the lease; Avoid using clear and unambiguous assurances or promises to the tenant regarding payment of rent or other terms of the lease. As always, if you have any questions about this topic or any other questions relating to commercial or residential tenancy law, please do not hesitate to contact a Parlee McLaws lawyer.